Air Cargo Row Shows EU-Russia Tensions

The latest dispute between an EU country and Moscow involves Russian pressure on Germany's Lufthansa to relocate its cargo hub

German-Russian relations have come under pressure following a dispute over cargo overflight rights, in a situation seen as reminiscent of recent bilateral trade spats between Moscow and other EU capitals.

The row concerns the right of Lufthansa Cargo, Germany's main freight carrier, to fly over Russian territory on routes from Europe to South East Asia. Russian authorities last week blocked Lufthansa Cargo's overflight rights saying German planes should make stopovers at Russian airports instead of at Astana in Kazakhstan.

The issue appeared to be settled late last week with German and Russian authorities agreeing that Lufthansa Cargo relocate its hub from Kazakhstan to Krasnoyarsk in Siberia.

"Discussions with the Russian transport ministry continue. At this time, it is above all a question of a timetable for the transfer of Lufthansa Cargo towards the Russian airport of Krasnoyarsk," German transport minister Wolfgang Tiefensee said in a statement on Friday (2 November), according to AFP.

But the agreement was reached at the cost of considerable political fall-out between Berlin and Moscow.

Germany last week itself briefly banned cargo flights by the Russian airline Aeroflot from Frankfurt airport, with the Russian transport ministry accusing Germany of "having started a press campaign in which we are being accused of blackmail," AFP reports.

Lufthansa meanwhile refuses to accept the deal. "It is a strange move, apparently trying to force us to move our Asian hub from Astana to Siberia by withdrawing our overflight rights," Lufthansa Cargo boss Carsten Spohr told Welt am Sonntag saying he does not accept such a "link" as a matter of "principle."

German parliamentarians of the ruling Christian Democrats called for tougher counter-measures against Russia, such as the blocking of Russian accession to the World Trade Organisation (WTO).

Christian Democrat MP Guenther Krichbaum, who chairs the German parliament's European affairs committee, said: "Whoever uses such instruments in trade and economic policy is not suitable for WTO accession, neither in the short term nor in the mid-term," according to ZDF television.

Mr Krichbaum said Germany should take the matter to the EU level, comparing the conflict with an ongoing row between the Kremlin and Poland over meat exports.

He said that through its embargo on Polish meat imports, Russia is trying to sow divisions within the EU, with Russia's Lufthansa ban showing "the same pattern."

Poland has since 2005 blocked talks for a new EU partnership agreement over the meat conflict, and has also threatened to veto Moscow's WTO membership saying the meat ban is politically motivated.

Meanwhile, Lithuania has been facing a reduction of oil transit across its territory, while Finland is irked by Russian plans to impose new export tariffs on raw timber.

Before it's here, it's on the Bloomberg Terminal.