Russia tensions hurting european companies
Russia's standoff with the West is hurting European companies, from heavy industry to sports goods makers, even before the latest sanctions have a chance to take effect, AP reported.
A group representing Germany's machinery industry cut its output forecast sharply on Thursday, pointing to the uncertainty caused by political tension with Russia over its alleged role in destabilizing Ukraine. A profit warning from sports goods maker Adidas underlined wider unease over the crisis.
"The conflict with Russia is not just leaving tracks in bilateral trade — it is generally hindering demand in important sales markets for our industry," said Ralph Wiechers, chief economist for the VDMA, the industry group.
The oil industry is also on alert. Earlier this week, British oil company BP said sanctions against Moscow could weaken its earnings.
The European Union has been very careful to design its sanctions on Russia so that they do not hurt its own economies too hard. But the VDMA report shows how difficult that may be to pull off, with the mere uncertainty over Russia creating an environment that can be toxic for business.