Russian President Vladimir Putin and German Chancellor Angela Merkel held a tense meeting in the Kremlin Friday, as both clearly struggled to reconcile the rising political acrimony between their countries with their long-standing and increasingly important economic partnership.

The Russia-Germany summit is an annual affair, and it usually goes well, in part because of strong and long-standing economic relations, and in part because Mr. Putin – a German-speaking former KGB spy in East Germany – has gone out of his way to cultivate good relations with German leaders. But rising criticism in Germany of Putin's alleged "crackdown" on his domestic opposition has been met lately with a growing Russian unwillingness to accept "mentoring" from European leaders whose own home front is racked with economic and political disorder these days.

"Our relations with Germany are in crisis these days, but it's a superficial crisis," says Alexei Pushkov, chair of the State Duma's international affairs commission.

"The economic foundations are solid, but there are real political disagreements that look like a storm front coming in.... Our German friends have missed something, that things have changed since [the financial crash of] 2008, and Europe is less and less of a model for us. It's still a nice place, but we're not willing to take advice and accept criticism from them. This is gone," Mr. Pushkov says.

"There is more distance now, psychologically and politically, between Moscow and Europe.... The Germans think that good economic relations are a gift to us, in exchange for us changing ourselves to look more as they want us to. But we think Russia is a good market that they should cultivate and appreciate. Increasingly, all this criticism calls forth irritation in Russia," he adds.

Under pressure

Ms. Merkel has been under intensifying pressure at home to get tough with the Kremlin about perceived human rights violations, including the jailing of two women from the Pussy Riot radical performance art group for singing a blasphemous song in an Orthodox church.

Last week, the German Bundestag (parliament) passed a 17-point resolution, authored by the German government's special coordinator for Russian affairs Andreas Schockenhoff, that demanded Russia observe European norms of human rights and democracy. Merkel, who faces a tough reelection bid next year, told a Moscow press conference that she had raised at least some of those issues with Putin in their private meeting Friday.

"We spoke about the situation of civil society in Russia and I expressed my concern about plans for certain laws," Merkel said, referring to draconian new Russian legislation that imposes tough penalties on public protest, a harsh requirement that nongovernmental groups that receive outside funding register as "foreign agents," and a sweeping new definition of "treason" that was signed into law by Putin this week.

"I think we need to speak openly and honestly about these issues. This dialogue is a precondition for understanding each other and identifying the conflicts," Merkel added.

But during a public exchange about Pussy Riot, Mr. Putin suggested that Merkel doesn't know all the facts of the case, including what he alleged was one of the Pussy Riot women's involvement in a 2008 "performance art" display which he claimed had anti-Semitic overtones.

"As for political and ideological issues, we hear our partners. But they hear about what's happening from very far away," Putin said.

For example, "Does [Merkel] know that ... one of [the Pussy Riot activists] hung an effigy of a Jew and said that these people need to be got rid of? You and I cannot support people who take an anti-Semitic stance. And I ask you to also take that into account," he added.

'The business community is very happy'

Germany is Russia's largest trading partner after China, with trade turnover of $87 billion last year. German gas companies are part owner, along with Russia's natural gas monopoly Gazprom, of the Nordstream pipeline under the Baltic Sea that opened a year ago to bring Russian gas directly to European markets. Germany depends on Russia for about 30 percent of its oil supplies, and 40 percent of its natural gas.

Just this week Gazprom and the German chemical giant BASF signed an asset swap deal that will give Gazprom a major foothold in gas trading and storage operations in Germany, while the German company will receive a 25 percent stake in the key western Siberian Achimov gas field.

"In economic relations, investments are growing, trade turnover is increasing, and the business community is very happy," says Fyodor Lukyanov, editor of Russia in Global Affairs, a leading Moscow foreign policy journal. "The economic foundations of the relationship are solid, and very much based on the interests of German big business. And this is not new, these ties between our countries go back to the 1970s."

But Russia has been angered by an EU investigation into Gazprom's alleged "anti-market" practices, and under increasing pressure the company has been forced to lower the prices it charges several European countries for its gas.

"The energy market in Europe is changing, and that could become a core issue between Germany and Russia in future," says Mr. Lukyanov. "It remains to be seen whether Gazprom can find ways to compromise."

But growing political tensions, which have spiked since Putin assumed a third term as Kremlin leader last May, have isolated Russia in European political forums, such as the Council of Europe, and are increasingly clouding bilateral relations with countries like Germany.

Get the Monitor Stories you care about delivered to your inbox. By signing up, you agree to our Privacy Policy

"There is a decoupling of economic relations from political ones taking place," says Lukyanov.

"Russia and Germany have a lot to lose if bad politics bring disengagement. The economic base of the relationship is too big and too important, and everybody would suffer."