As Russia's biggest investor and most important trading partner, Germany is especially vulnerable to the financial and political crisis in Moscow. Russia owes the Bonn government 74.2 billion deutschmark and German banks are owed a further DM50.5 billion.
Yet both the government and financial circles were sounding relaxed yesterday, predicting that the Russian crisis will have a negligible influence on Germany's economic performance.
The Frankfurt stock exchange plunged yesterday morning but most losses were recovered by the end of trading in the afternoon. Analysts expect stocks to recover further on Monday if Mr Chernomyrdin is confirmed as prime minister by the Duma.
Germany's six leading economic institutes agreed yesterday that the crisis will have little effect on German economic growth, which they expect to reach 2.6 per cent this year and 2.7 per cent in 1999. They are equally confident that unemployment will fall next year from its present level of 4.38 million. Some economists believe that Russia's troubles have provided a useful opportunity for an overdue correction on the stock market.
One reason for this optimism is that, although Germany is Moscow's most important economic partner, only 1.5 per cent of German exports go to Russia. German exports to Russia rose by 42 per cent in 1997, with machine construction, food and the motor industry accounting for much of the growth.
Most German exporters are insured against bad debts by Hermes, an insurance company partly owned by the state. Many, including Mr Peter Danylow of the Eastern Committee of the German Economy, remain bullish about their long-term prospects in Russia.
"We should not only see the possible losses that a recession in Russia might bring but, in the long term, an enormous growth potential is unexploited," he said.
German banks can depend on the Bonn government to refund 40 per cent of their bad Russian debts, softening the blow of this week's developments. Some subsidiaries of German banks even regard the meltdown in Moscow as an opportunity to drive their Russian competitors out of business and snap up new business.
The Finance Minister, Mr Theo Waigel, warned yesterday that Russia's new leadership must resist the temptation to print money as a way out of the crisis.
"Every decision the Russian government makes must take account of the medium- to long-term effects on Russia's access to the capital market," he said. But Mr Waigel was confident that Moscow's difficulties would have no impact on his own budget plans.
"I see no current risk for the federal budget. The three-month repayment moratorium announced by the Russian government on August 17th applies exclusively to demands of foreign banks on Russian banks. It does not apply to state-guaranteed payment obligations to other states," he said.
German exporters will benefit from the fall in the value of the deutschmark this week but some fear that the Russian crisis may spread to other eastern European countries. Interest rate rises and currency devaluations could weaken the economic performance of the entire region between Germany and Russia, which now accounts for more than 10 per cent of German exports.
The loss of such lucrative emerging markets so soon after the collapse in south-east Asia could cripple Germany's own recovery.
The opposition Social Democrats yesterday stepped up their attack on the Chancellor Kohl, who faces an election on September 27th. The Social Democrats' chairman, Mr Oskar Lafontaine, said that Chancellor Kohl had contributed to the Russian crisis by being too generous to President Yeltsin.
"What have we actually achieved? And with what risks? I can't say for sure, but I always had the impression Kohl was being rather generous to Yeltsin, and had paid too little attention to what was happening to the money we lent. It would have been better to send German companies in to build a road, a railway or a power station, instead of just transferring money. We would change that policy," he said.
