Germany restricts Rheinmetall AG from Building Military Training Center in Russia

Germany restricts Rheinmetall AG from Building Military Training Center in Russia

Vice Chancellor of Germany, Sigmar Gabriel, denied the permission for Rheinmetall AG (RHM) to build a military training center in the east of Moscow. France, on the other hand, has decided to give the first of the two warships to the Russian Navy under a 2011 contract. The first carrier would be delivered in October.

President Vladimir Putin is feeling the pressure from international community to stop favoring rebels in the eastern Ukraine. A division was also seen in the European Union as Germany refused to permit Rheinmetall AG and France planned to deliver the order for two helicopter carriers costing $1.6 billion to Russian Navy.

Karl Lamers, the deputy defense committee chairman from Merkel's Christian Democratic Union, said, "The French are about to provide Russia with valuable support for military operations with the planned delivery of the two warships and against the backdrop of the war in Ukraine, that's completely unthinkable".

The European Union reached an agreement last week to prevent Russia's state-owned banks from selling shares or bonds in Europe and restrict oil exports.

U. S. imposed penalties on three Russian banks and a shipbuilder. The politicians from the Chancellor Angela Merkel's party are forcing the government to stop France from handing over the Mistral carriers to Russia under a 2011 contract.

Tanja Alemany Sanchez de Leon, an Economy Ministry spokeswoman, said the German government is planning to compensate the loss Rheinmetall has suffered because of not being allowed to build the military center in the east of Moscow.

Rheinmetall shares' declined by 1% and stocks dropped by 6.5% on March 20 when government imposed restrictions on the military training center deal.

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