Sanctions Unlikely

The Federation of German Industries (BDI) issued its call against sanctions as European Union (EU) leaders prepared to hold an extraordinary summit in Brussels to discuss the bloc's response to the crisis in the Southern Caucasus.

Proposals to put Russia under pressure through sanctions or to halt World Trade Organization (WTO) accession talks or partnership with the European Union (EU) lead in the wrong direction, BDI President Juergen Thumann said.

"We would all lose if this were to happen," Thumann added.

Germany and Russia needed good relations, and the mutual economic involvement should work to dampen the crisis, Thumann said.

"We need more dialogue rather than more confrontation," the German business chief said, adding that business was prepared to make its contribution.

Business worth billions

Germany imported goods to the value of 28.8 billion euros ($42 billion) from Russia last year, much of it in oil and gas, while Russia imported goods valued at 28.2 billion euros, largely machinery and vehicles.

EU members that were previously in the Soviet sphere of influence have come out for a strong response to Russia's military incursion into Georgia last month, while some other countries in the 27-member bloc have urged moderation.

Solana: aid, not sanctions

Ahead of Monday's summit EU foreign policy chief Javier Solana meanwhile said that the bloc would not approve sanctions against Russia, but will instead discuss sending economic aid and a civilian mission to Georgia.

"I think sanctions are not on the agenda today," Solana said after holding talks in Brussels with visiting Georgian Prime Minister Vladimir Gurgenidze.

The EU is split on the issue of sanctions, with Poland and the Baltic states on one side insisting that the EU should punish Russia, and France, Germany and Italy saying instead that dialogue with Moscow is the best way forward.

Desperate for unity

Speaking in Vienna, Czech Foreign Minister Karel Schwarzenberg said the EU should agree on a strong position on Russia's actions in Georgia.

"Should the European Union not be able to find a clear, strong, common position, we can write off the European Union as a political project for some time to come," Schwarzenberg said, but added that he also didn't believe sanctions were the way to go.

In the meantime, the EU has an "obligation" to help Georgia, which has suffered "tremendous damage on the ground", said Solana, who plans to visit Moscow and Tbilisi some time soon.

On top of providing humanitarian and economic aid, the EU is getting ready to boost its civilian mission, which currently compromises about 40 people, Solana said.

"We would like to have a new mission deployed soon," he said.