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Germany’s Bosch curbs Russia activities over military vehicle claims

The world's largest auto supplier Bosch said Friday it was halting deliveries of truck parts to Russian customers following Ukrainian claims that its components were found in Russian military vehicles.

Published: 19 March 2022 08:58 CET

Germany's Bosch curbs Russia activities over military vehicle claims

A building belonging to Bosch. Photo: DPA

Der Spiegel weekly earlier reported that German authorities were probing possible export violations by Bosch, given that EU firms are barred from supplying Russia with “dual-use” goods that could be used for both civilian and military purposes.

The export restrictions relate to sanctions imposed on Russia over its 2014 annexation of Crimea.

“Due to indications that Bosch products — contrary to local contractual agreements — may have been used in non-civilian applications, we have stopped the delivery of truck components in Russia and to Russian customers,” Bosch said in a statement.

Ukrainian Foreign Minister Dmytro Kuleba had on Sunday told a talk show on German broadcaster ARD that Ukrainian troops recently seized Russian infantry vehicles which contained components made by Bosch.

Bosch said it took Kuleba’s allegation “very seriously” and had started a “comprehensive review” into the matter.

The Stuttgart-based firm stressed however that it had not directly supplied any components to Russian military vehicle manufacturers.

According to Spiegel, Germany’s economy ministry has asked local prosecutors to look into the claims.

The ministry told AFP it did not comment on individual cases.

But it added that as a rule, the ministry informed the relevant law enforcement agencies if it received information about possible sanctions violations.

Russia has been hit with a barrage of Western sanctions since it invaded Ukraine last month, wreaking havoc on international supply chains and prompting many foreign firms to curb production in the country.

Bosch said it had suspended work at several of its plants in Russia, which make automotive parts as well as consumer goods.

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What a Russian victory in Ukraine would mean for Germany

Recent news from Ukraine has been bleak. The surge in missile and drone attacks on Ukrainian power plants over recent weeks has plunged whole districts of the capital into darkness for hours on end.

Kyiv has outlined a five-point strategy to weather the storm, including electricity rationing, urging help from abroad, receiving more air defence systems, and overhauling the grid.

Ukrainian President Volodymyr Zelensky this week said Ukraine needed “quick” and “cost-effective” repair work ahead of winter.

“We need your equipment and financial support to respond now and maintain normal life,” he told a reconstruction conference in Berlin.

While a plan to use frozen Russian assets for war-torn Ukraine dominates G7 talks in Italy on Thursday, there are voices in Germany – especially among the far-right AfD party – that would rather Germany cut off all its support for Ukraine. But these pro-Russian positions, veiled as arguments for peace, tend to ignore how dramatically a Russian victory in Ukraine would shake Germany.

An investigation by Tagesspiegel looked at what exactly a Russian victory would mean for people living in Germany. Here are the main impacts.

Germany would need to dramatically increase military spending

Andreas Schwarz, the SPD budgeter responsible for the defence budget has warned that if Ukraine lost the war, Germany would be forced to spend even more money on defence in one fell swoop.

Russia would suddenly be at the NATO border in Europe feeling militarily superior.

German defence expert Roderich Kiesewetter suggests that Germany would run out of ammunition after a few days in the event of a direct war. Kiesewetter has called for at least three percent of Germany’s gross domestic product to be invested in armaments.

Germany has made efforts to up its defence spending recently, but it is still unclear if the country will maintain a two percent GDP target for defence spending going forward.

But a sense of urgent need to ramp up Germany’s military defences does seem to be growing. On Wednesday Defence Minister Boris Pistorius announced a plan to bring back conscription to the armed forces.

Recently, former British Armed Forces Minister James Heappey estimated that a Ukrainian defeat would cost the West collectively trillions of dollars.

READ ALSO: Is Germany gearing up to reintroduce compulsory military service?

Pistorius with members of the army

Ukrainian President Volodymyr Zelensky (centre left) and German Defence Minister Boris Pistorius (centre right) stand with Ukrainian and German soldiers during a visit to a military training area in Mecklenburg-Vorpommern, north-eastern Germany, on June 11, 2024. Photo by Jens Büttner / POOL / AFP

Higher prices

Ukraine is one of the largest agricultural exporters in the world and also has stocks of rare earths and critical minerals.

A Russian takeover of the country would likely spell massive price fluctuations for goods like Ukrainian grain – which would spell increased grocery prices in Germany as a start, according to many economic projections.

More war refugees in Europe

Migration researcher Gerald Knaus told the Tagesspiegel that a Russian victory in Ukraine could “turn another ten million people into refugees”.

In parts of eastern Ukraine, such as the metropolis of Kharkiv, Russia has been wearing down peoples’ will to stay with near constant bombardment.

Hundreds of thousands of people living there regularly go without electricity due to destroyed substations and infrastructure. Kharkiv alone is home to 1.3 million, including 200,000 internally displaced persons.

According to Eurostat, since the beginning of the war, 4.3 million Ukrainians have fled to neighbouring European countries. At 1.27 million, Germany has taken in the majority.

READ ALSO: Two years later, two Berlin residents from Ukraine on how war affects their lives

Germany’s interior ministries don’t expect tensions to ease soon. The Federal Office for Migration (BAMF) continues its efforts to distribute refugees across the country, but there is no doubt that in many places resources are running thin.

Helmut Dedy, Chief Executive of the Association of German Cities has called on federal and state governments to provide more facilities.

Increased pressure on the welfare system

Many refugees from Ukraine, and indeed many refugees broadly, are dependent on state benefits for some period of time after arriving in Germany.

As of January the employment rate among refugees from Ukraine was around 25 percent. In December of last year 710,000 Ukrainians received citizen’s allowance.

Refugees are obliged to apply for a work permit in Germany before they can join the workforce. Additionally they face a language barrier, and many of their professional qualifications may not be immediately recognised.

School and day care spots running thin

Since the outbreak of Russia’s invasion of Ukraine, nearly 220,000 children and young people who have fled the country have enrolled in German educational institutions.

So far German states have managed to handle the situation relatively quietly, but there is reason to believe that further stress on the system would be more than it can take.

A Ukrainian student in a German classroom

A name badge with an Ukrainian name seen in an international class at the Max-Ernst comprehensive school (Gesamtschule) in Cologne. (Photo by Ina FASSBENDER / AFP)

The president of the North Rhine-Westphalian Teachers’ Association suggests that the region he represents is already at its limit.

The German Association of Cities and Towns and the Association of Towns and Municipalities (DStGB) have also identified a shortage of school and day care places, as well as shortages of language courses and staff for integration services.

Germany’s educational system has already shown signs of stress – in the form of teachers’ strikes and school dropouts – before an additional influx of students are added into the mix.

Exacerbating the housing shortage

In response to the initial wave of incoming Ukrainian refugees, a section of the Building Code was enacted which allowed for the construction of new refugee accommodation without a development plan.

In some places, especially in parts of eastern Germany with growing vacancies, the influx of Ukrainians actually helped to stabilise the housing market.

But in cities where a severe shortage of housing has already been growing for years, there is no doubt that any number of incoming residents only adds stress.

Such is not only the case in popular cities like Berlin, Hamburg or Munich. In Mecklenburg-Western Pomerania, for example, the local Ministry of the Interior sees municipalities facing a major challenge in providing housing.

READ ALSO: ‘Tense housing situation’: Why a Berlin renter can’t be evicted for two years

German defence expert Roderich Kiesewetter emphasises that the aforementioned impacts on German life are not yet a foregone conclusion. He told Tagesspiegel that Ukraine could still defend itself and restore its 1991 borders according to international law, “But only if we support them accordingly and stop setting red lines for Ukraine and us”.

With reporting by AFP.

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