assets and economic sanctions are hitting russia hard. they're also affecting companies that exported to russia. we find out how one small german firm is adapting. welcome to the show. i'm so busy in berlin. good to have you with us. germany has decided in principle to buy f 35 fighter jets from the us. that's according to new reports, citing government sources. berlin plans to drastically beef up military spending. as a result of the russian invasion of ukraine. it's not alone. denmark and sweden say they're also raising their military spending over the coming years. now, traditionally, larger nations have spent moral defense in 2020 the u. s. with a whopping $77080000000000.00 budgeted for defense. china only $200.00. $52000000000.00 on its military, but that still georgia, germany with $53000000000.00 euros or dollars. i should say. that year russia had a military budget of $62000000000.00. and that's 10 times what ukraine spent. and

while it seems much smaller than china or the u. s, it represents a greater share of the russian economy. switch companies are the biggest players in defense. well, u. s. company lockheed martin makes the f $35.00 is one of that's where the largest industry with sales of 66000000000 dollars last year. it's followed by europe's air boss and 2 more u. s. companies, raytheon technologies, and boeing. now the stock home international peace research institute tracks military expenditures around the world. i asked their senior researcher lucy bl, road suits row to put recent events and to prospective we are sitting at the moment, throwing up since or across europe in particular for increasingly treat furniture. but also in canada, which is also in the nato member. and of course, countries are reacting to the outbreak of the war in ukraine. countries have are actually now making decisions through the dormitory expenditure and reaching the 2

percent target said by nato. something that has been asked to do since 2014, but are now making you move toward one of those countries. of course, germany announcing that it wants to stay with a 2 percent of gdp level for defense expenditures. so are we saying that we're seeing more countries that are spending that haven't traditionally spent as much in the past? is that fair to say, or is it more the usual suspects? china, the us, russia? what we are seeing is the next generation of the trend in pets. here in europe. see european countries had been already increasing their mitree expenditure for the past few years since 2014 and russia's annexation of crimea. but district is actually accelerating. so there were increases that had been announced, but now their increase on top of increases so to speak. so companies that say france like sweden or put on, we're already saying that we're going to increase the richer expenditure. but honestly they're going to increase even more. so we're going to see europe as one

of the read the key regions driving me to spending for the coming years. not just the usual suspects were mentioned. can we say what kinds of spending we're seeing is this for modernizing programs for modernization? is it for new weapon systems? can you, can you break it down a little bit more? it's really to say, because really we are really interested in the state of announcements. so countries promising they're going to increase spending to 2 percent or more at one is even saying they're going to go to 3 percent. germany says more than 2 percent. so, but we, at this stage we don't know yet or just been a few announcements. i think we're missing the 35 for germany. that is really too early to tell. i think one key question when it comes to europe or nato as a whole, is how to coordinate all those increases. they're going to be billions of euros or dollars are going to the realization of our forces, the how to make sure it's done in the coordinated fashion that we don't duplicate

when we don't, you know, waste money in the process. i think there will be a really strong role for nato n d u and making sure that this is starting the coordinated fashion. and that was lucy grow. so grow of slippery speaking with me earlier. russian authorities have threatened foreign companies that are withdrawing from the country with arrests and asset seizures. that's according to a new report in wall street journal. coca cola mcdonalds and apple have all closed stores in russia. proctor and gamble, ibm, and others have halted exports of the country. over the weekend, russian plus president vladimir putin said he would favor putting firms under what are called external management. the government has allegedly threatened to also see their assets, including intellectual property. right, enjoy. now, by 3, so found the center for russia, europe, asian studies. theresa, good to see if true, these reports and this effort, i think we're seeing in the duma to nationalize in these aspect assets that would

amount to expropriation. i would imagine this, this suggests really a real rupture with western economies and not just sort of a pause during sanctions. yes, that would really represent a very strong dealing with the west and the one country that would be situated to gain the most mount. this is china, we've seen ambassador and change master state that china should position itself to buy up these western companies that might be nationalized by, by raso. but in addition, this is also a taste that promised to russia that they will support them. so in many respects, china's trying to walk a very careful line while the set west is trying to sanction russia in order to change their calculus in regard to ukraine. china is kind of drew back toward kind of telling them that we're there to support you and this is all coming to a head today. we'll see their talks going to take place in rome. but i think that

china is trying to be ambiguous, trying to keep russia onside and try to keep the western side because they need the western markets, both in europe and in the u. s. i want to come back to china in just a moment, but want to ask 1st the businesses, these major businesses, mcdonalds, coca cola i b, m, do they have any recourse were their assets to be sees? well that's, there are 2 aspects going on here. some are just voluntarily the company's leaving, they're not part of the sanctions package. they realize that the optics are really bad. and of course, this would hurt russia over the longer term. i think the big canary in the coal mine, at least for me, was when v p announced without even being asked by the government that they were pulling out of russia. this was at the very, very beginning of the day of the russian invasion of ukraine. they left $25000000000.00 on the table. and so i think that sent a very dangerous message to the rest of the international community that russia, people are looking at it businesses. we're looking at it over the longer term as

a lost cause shelf quickly followed. so now you see other companies like, as you noted, coca cola, disney, all these companies are kind of pulling out a bit from russia as a way of voluntarily to kind of send a message to their other customers and the rest of the world that they don't support what they're doing in ukraine. so this really we're seeing russian economy being crippled very rapidly. and we haven't seen these types of sanctions all these, you know, kind of joint sanctions even partially switched. so i think that this is also kind of a stress test for other countries that might think of invading other countries. you talked about the market opportunities there for china, potentially as the western businesses we've. but what about customer preference in russia? surely there are many who don't want to give up mcdonalds or coca cola. yes, i've seen many interviews of people who are in shock. you know that they might not have any more access to these types of industries or companies or products. but i

think that even though that much of the media is controlled, say, controlled in russia, people are going to start noticing that kia is gone. each of them is gone. all these companies that they were doing business with are gone. so even though the media in russia is telling me everything's fine, the public is getting concerned because also these companies provide a lot of jobs. and so people are already being asked to take hudson pay. and some of these companies are continuing to pay their employees, even though they've shut down their premises in order to keep good relations with their employees. so it's, it's a very mixed bag. some are leaving. some are trying to maintain good relations with their russian employees. and others, companies are being threatened to be nationalized. so i think the moscow politics or russian politics are really going to be stress test it not only with what's happening in ukraine, but about how the public responding to all of these pressures that they're under

road 3. so in the center for russia, europe, asia, studies. thank you very much. thank you. all right, let's look at some of the other business headlines now. has lucio, you must says both the electric car maker and his rocket company space x are facing significant inflation pressure. that as rushes war in ukraine as commodity prices to the highest levels of 5 years. tesla has reacted by raising prices for several car models by $1000.00. bermuda says it is the spinning certification of russian planes licensed in the british overseas territory. that's due to sanctions on moscow. the prohibit necessary maintenance work on the plains of the measures likely to impact hundreds of russian commercial aircraft. more than 700. which of which are licensed in bermuda. global sanctions are biting down on the russian economy. economy or they're also hitting some companies across europe, including here in germany. here's

a look at one firm. we're revenues stand up all by a 3rd. ah, the workers here still have their hands full with orders from the us and middle east. but the loss of their contracts from russia is a painful blow for the matter burg based firm am i am once at least an indian alongside the economic problems. i of course, worry not just as a business manager, but also as a father about what the future will learn language from the photos own versus the visit is who controls the relationships with his russian customers were longstanding and friendly. but that's not much used to him. now. his firm is no longer allowed to deliver its products to russia, as they are used in the petrochemical industry. i wouldn't wonder, going on with, with us you would look the van through and essentially this product is affected by the sanctions because as needed for oil refinery in the so i can't ex,

quote them to rush any more that will cost me about 30 percent of my revenue was 40 on was one if he otherwise it would. so minus what was that? and what was i was more than the e u has imposed a ban on this kind of technology in an effort to hamper rushes, military capacity. what this means for the employees here is not yet clear. it might be necessary to cut working hours as recover doesn't, will agree, as well as employees were not that pleased about it because a lot about products or to live, to russia. it's our jobs were talking about and of course we want to keep them going about if the difficult time more difficult than corona definitely mathias a low may have to close his russian office. but it's not the only problem. raw materials are getting harder to come by. guess on boyish boy windsor woke his yesterday. i was at our plant. and for me, prices for carbon steel rose 30 percent overnight for him to meet for guest on to

word or guys equal to including the firm has $27.00 employees including 3 from ukraine. but only the german ones are prepared to appear on camera and speak about the war in ukraine. have your notorious does he, we hope that the situation comes down and piece is secured. that's the most important thing. the boss doesn't think the sanctions will hit russia where it hurts. he expects his chinese competitors to fill the supply gaps. thanks, roger. ah, ah ah ah, with

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download it now, feel free. they've had no peace for, for decades. the people of iraq our country is devastated and there's no end ah, how did it come to this b? t i witnesses reveal president to story. they were the u. s. they knew what the consequence of the sanctions are. and they blight to the world about the exactly like their misty and the poisons bear with the great documentary series destruction of the nation. this week on

d. w. ah, this is a w news live from by laying more sci fi talks. as russia intensifies its assault against you crate, moscow denies targeting civilians but was 50 reports more than 2500 deaths because of russian attacks. also on the program german chancellor left show so me.