Austria's Russian Threat: Is War Coming To Vienna?

Austria's relationship with Russia has been a complex one, marked by historical ties, economic interests, and a declared neutrality. As a neutral country, Austria has sought to play a mediating role in the Russia-Ukraine conflict, advocating for a diplomatic solution while also acknowledging the seriousness of the situation with Russia's military buildup on the Ukrainian border. However, Austria's neutrality and close economic ties with Russia, particularly in the energy sector, have drawn scrutiny and criticism from other European countries. Austria's neutrality can be traced back to the end of World War II when it regained its sovereignty in 1955 with the condition of committing to perpetual neutrality, which was advantageous to both the West and Russia during the Cold War. This neutrality has allowed Austria to become a hub for international organizations and a bridge between Eastern and Western countries, fostering economic growth. However, it has also led to challenges in taking a united stand against Russia's aggression toward Ukraine, with Austria initially resisting sanctions on the Nord Stream 2 gas pipeline project.

Austria's stance on the Russia-Ukraine conflict

Austria has historically enjoyed good bilateral relations with Russia, but the 2014 annexation of Crimea and the 2022 invasion of Ukraine have strained this relationship. Austria, alongside its EU partners, has condemned Russia's war of aggression against Ukraine and supported sanctions against the country. However, Austria has also emphasised the importance of diplomacy and finding a peaceful resolution to the conflict.

In the lead-up to the 2022 Russian invasion of Ukraine, Austria acknowledged the seriousness of the situation, with thousands of Russian troops amassed on the Ukrainian border. Austria's commitment to finding a diplomatic solution was evident through its encouragement of talks at NATO and the Organization for Security and Cooperation in Europe (OSCE). As a neutral country and the seat of the OSCE, Austria believed it could play a key role in facilitating diplomacy. While Austria sought negotiations, it also warned Russia of "massive political and economic consequences" if it invaded Ukraine.

Despite Austria's support for sanctions against Russia, there have been internal debates about the extent of these sanctions. Initially, Austria faced criticism from its European allies for its resistance to linking Russia's actions in Ukraine with sanctions against the Nord Stream 2 gas pipeline. However, Austrian Parliament President Wolfgang Sobotka later stated that Austria would support western sanctions, even if they encompassed the pipeline.

Public opinion in Austria leans towards maintaining neutrality in the conflict. A majority of Austrians believe their country should remain neutral and cooperate with other European countries on defence. This stance is reflected in the country's political landscape, where no parties represented in parliament are calling for the abandonment of neutrality.

Austria's neutrality

Since then, neutrality has become an integral part of Austrian identity, with 76% of Austrians favoring remaining neutral in a 2022 poll, as opposed to 18% who supported joining NATO. Austria's neutrality is often compared to that of Switzerland, which has been neutral since the Peace of Westphalia in 1640.

Austria's neutral status has been a key aspect of its foreign policy, particularly during the Cold War. The country actively participated in easing tensions between the Eastern and Western blocs, playing a role in the formation of the Organization for Security and Cooperation in Europe (OSCE) and hosting its headquarters in Vienna. Austria's neutrality allowed it to foster close relations with both sides of the Cold War divide, including Russia.

However, Austria's neutrality has come under scrutiny in recent years, especially following the Russian invasion of Ukraine in 2022. Austria has been criticized for its continued dependence on Russian gas and its significant economic ties with Russia. Despite the ongoing conflict, Austria has maintained its commitment to neutrality, with only a minor liberal party, NEOS, officially supporting a change in the constitution to allow entry into NATO.

Austria's stance on the Russia-Ukraine conflict reflects its commitment to neutrality. The country has pushed for a diplomatic solution, arguing that negotiations cannot be done with "tanks and missiles." While Austria has warned Russia of "massive political and economic consequences" if it invades Ukraine, it has also resisted linking sanctions to the Nord Stream 2 gas pipeline, citing Europe's dependence on Russian gas.

Austria's economic ties with Russia

Austria and Russia have a long history of bilateral relations, and their economic ties have remained fairly intact even amidst the ongoing war in Ukraine. Here is an overview of Austria's economic ties with Russia:

Historical Context

Austria and Russia, including their predecessor states, have had a history of relations dating back to the 16th century. The two countries' relations became vital to European security as both sought to expand their domains. They found common cause in their opposition to the Ottoman Empire and France, fighting alongside each other in several wars. After the Napoleonic Wars, they worked together to uphold the Vienna settlement and preserve the status quo.

Energy Sector

The energy sector is a key area of economic cooperation between Austria and Russia. Austria has deep energy ties with Russia and is heavily dependent on Russian gas. In 1968, Austria became the first Western European country to import natural gas from the Soviet Union, and Europe's main gas hub was established in Baumgarten an der March on Austria's eastern border. This energy hub continues to be a central element in the region's energy infrastructure.

The Austrian oil and gas group OMV is a member of the consortium behind the Nord Stream 2 project, a controversial gas pipeline running from Russia to Germany. While Austria initially resisted the idea of including Nord Stream 2 in potential sanctions against Russia, it ultimately supported Western sanctions, including those targeting the energy sector.

Banking and Finance

The Austrian financial group Raiffeisen Bank International has come under scrutiny for its continued financial activities in Russia during the war in Ukraine. Human rights activists have argued that the group is indirectly sponsoring Russian aggression. Despite facing pressure, Raiffeisen Bank International remains the largest Western bank in Russia and continues to explore business growth opportunities there.

Trade and Investment

Austria and Russia maintain significant trade relations. In 2021, Russia exported $631 million worth of goods to Austria, with crude oil being the main item. In the same year, Austria exported $2.28 billion of goods to Russia, with medical products being the top item. Between 1995 and 2021, Russian exports to Austria grew by an average of 1.57% annually, while Austrian exports to Russia increased by an average of 4.07% per year.

Diplomatic Relations

Austria and Russia have had diplomatic relations since 1924. Vienna has served as a hub for Russian funds and espionage activities. Several Austrian politicians and officials have had close ties with Russia, and the country has generally sought to maintain good relations and close economic cooperation. However, Austria has also supported EU sanctions against Russia following the 2022 invasion of Ukraine, demonstrating a complex balancing act in its international relations.

Austria's energy dependence on Russia

Austria's dependence on Russian gas has been a cause for concern, particularly as this energy reliance has potential geopolitical implications in the context of the Russia-Ukraine conflict. Before the war, Austria sourced up to 80% of its gas from Russia, making it one of the most exposed countries in Europe to Russian gas flows. This percentage has fluctuated over time, dropping to 71% in December, around 50% in January, and 57% in February.

Austria's energy minister, Leonore Gewessler, has expressed concern about the country's continued dependence on Russia for gas. In February 2024, just two years after the Ukraine war began, Austria's reliance on Russian gas had risen to 98%. This increase has prompted criticism of the Austrian government for not doing enough to reduce this dependence.

The country's energy infrastructure has historically been oriented towards Russia, and past policy decisions have deepened this reliance. For instance, in 2018, the former OMV CEO extended Austria's gas import contract with Russia to 2040. Additionally, OMV, a partly state-owned energy company, continues to pay for Russian gas using euros through an EU "sanctions-compliant" scheme.

However, Austria has made some efforts to reduce its dependence on Russian gas. In August 2022, the Austrian government reported that its dependence on Russian gas had fallen to less than 50%. This was achieved by boosting gas storage and finding alternative suppliers. Chancellor Karl Nehammer stated that they had stored more than 50 terawatt hours out of the 76 terawatt hours needed. Environment Minister Leonore Gewessler added that around 55% of the country's annual consumption was in storage, and they were on track to reach their goal of 80% by the start of the heating season.

Despite these efforts, critics argue that Austria's progress in reducing its dependence on Russian energy is too slow. Some suspect that Vienna is deliberately delaying cutting ties to protect its economy. However, Austrian officials have defended their pace, citing their unique circumstances as a landlocked country with an energy infrastructure oriented towards the east for decades.

Austria's political ties with Russia

Austria and Russia have a long history of political ties. Since 1955, Austria has maintained a constitutionally mandated status of neutrality, which has allowed it to play an important role in international diplomacy. This neutrality has also made Austria an attractive location for intelligence activities, with Vienna being called a "haunt for spies" by the Washington Post.

Austria and Russia's political ties can be traced back to the 16th century, when there were contacts between the Holy Roman Emperor and the Tsardom of Russia. The two empires later formed a recurring alliance, often directed against the Ottomans and France. They were allies during several wars, including the War of the Polish Succession, the War of the Austrian Succession, and the Seven Years' War.

After the Napoleonic Wars, Austria and Russia worked together to preserve the status quo in Europe, particularly in suppressing revolutionary movements. However, their relationship was strained during the Crimean War, when Austria took a neutral stance and supported the Anglo-French coalition.

In the late 19th and early 20th centuries, Austria-Hungary and Russia became rivals in the Balkans, competing for influence over the weakening Ottoman Empire. This rivalry eventually led to World War I, as Austria-Hungary declared war on Serbia, which was supported by Russia.

During the Cold War, Austria maintained its neutrality and became a hub for espionage activities, with both Soviet and Western intelligence agencies operating in the country.

In recent years, Austria has sought to maintain good relations and close economic cooperation with Russia, even after the 2014 Ukraine crisis. Austrian companies, particularly in the energy sector, have become deeply entwined with Russia. However, Austria has also supported EU sanctions against Russia following the 2022 Russian invasion of Ukraine.

The political ties between Austria and Russia have been described as warm and controversial, with concerns raised about Russian influence in Austrian politics and intelligence. Several Austrian officials have moved to Russian businesses or state-owned companies after leaving office, and there have been allegations of Austrian intelligence agents aiding Russian intelligence services.

Overall, Austria's political ties with Russia are complex and multifaceted, shaped by historical alliances, economic interests, and intelligence activities.

Frequently asked questions