Austria's Russia Ties: Friend Or Foe?

Austria and Russia have historically enjoyed good bilateral relations, with the former maintaining a neutral stance on the latter's conflict with Ukraine. However, Russia's invasion of Ukraine has forced Austria to re-evaluate its position, leading to its support for sanctions against Russia and criticism of its actions. Despite this, commercial ties between the two countries remain strong, especially in the energy and finance sectors. Austria's far-right political party, the FPÖ, has come under scrutiny for its close ties to the Kremlin, with officials believed to have been targeted by Russian cultivation efforts. While Austria has taken steps to counter Russian influence, it continues to walk a delicate diplomatic line between its commitments to Europe and its relationship with Russia.

Austria's stance on the war in Ukraine

Austria has historically maintained a neutral stance in international conflicts, and this has been the case since it gained independence in 1955. This neutrality is based on military and security matters and prevents the country from joining any military organisation or participating in any foreign war.

However, Austria's stance on the war in Ukraine has been a complex one. On the one hand, the country has supported Ukraine with substantial humanitarian aid, taken in refugees, endorsed European Union (EU) sanctions against Russia, and criticised Vladimir Putin for violating international norms. Austria's federal president, Alexander Van der Bellen, and federal chancellor, Karl Nehammer, have expressed solidarity with Ukraine, with Nehammer stating that "enough is enough" and calling on Russia to stop the bloodshed and withdraw its troops. Austria has also provided Ukraine with protective equipment, medical supplies, and fuel.

On the other hand, Austria has been wary of permanently damaging its long-standing and lucrative relationship with Russia. It has continued to maintain strong commercial ties with Russia, particularly in the energy and finance sectors. Austria is highly dependent on Russian energy, and Russian gas continued to flow to the country even as supplies to other European nations were cut off. Additionally, Austria was the only major EU country that did not expel Russian diplomats following the poisoning case in Salisbury in 2018.

The war in Ukraine has put Austria's neutrality into question, and the country has faced criticism from its Western partners for its embrace of "military neutrality" and its down-the-middle approach to the crisis. There has been debate within Austria about its neutrality, with some calling for the country to join NATO. However, most Austrians still interpret neutrality as an assurance that their country will not be engaged in a war.

In summary, while Austria has taken steps to support Ukraine and condemn Russia's actions, its response has been nuanced due to its historical neutrality and economic ties with Russia.

Austria's relationship with Russia since 1991

Since the dissolution of the USSR in 1991, the Russian Federation has maintained a close relationship with Austria. Austria has long been a favourite location for Soviet (now Russian) commerce, banking, and espionage activities.

In 2003, SVR agent Vladimir Alganov was caught in Vienna discussing bribes Russian spies had paid to senior Polish officials. In 2009, the former bodyguard of Chechen President Ramzan Kadyrov and prominent critic of the Chechen government, Umar Israilov, was assassinated in a street in Vienna.

Thanks to its neutral status, Austria has continued to be the venue for spy exchanges. In 2010, the US and Russia swapped four imprisoned intelligence assets, who had been convicted in Russia, for 10 Russian agents caught and convicted in the US, on the tarmac of Vienna International Airport.

Austria has sought to maintain good relations and close economic cooperation with Russia, even after the drastic deterioration of Russia's relationship with the West following the 2014 Ukraine crisis. In 2016, the FPÖ leader, Heinz-Christian Strache, announced that his party had signed a cooperation agreement with United Russia, Russian president Vladimir Putin's party. Following the national election in 2017, the FPÖ entered the government as a junior partner of the winner, ÖVP, headed by Sebastian Kurz.

Austria was the first foreign country that Russian president Vladimir Putin visited officially in June 2018 following his reelection for a fourth term. During Putin's visit, the CEOs of OMV and Gazprom signed an agreement to extend Russian gas supplies to Austria until 2040.

In 2018, an Austrian colonel was investigated on allegations he had spied for Russia since the 1990s. The colonel was convicted in 2020 of spying for the GRU for over 25 years. In 2019, German federal police raised concerns that Austrian intelligence agents aided Russian intelligence services.

In February and March 2022, during the Russian invasion of Ukraine, Austria supported EU sanctions against Russia, despite still being a militarily neutral country. On 7 March 2022, Putin put Austria on the list of "enemy countries" along with all other countries who supported sanctions against Russia.

In April 2022, Austrian Chancellor Karl Nehammer was the first European leader to visit Vladimir Putin since the invasion to discuss an end to the war. In the same month, Austria expelled four Russian diplomats, joining a group of European Union countries that took similar action. In February 2023, Austria expelled another four Russian diplomats for behaving in a manner inconsistent with international agreements.

While Austria has publicly criticised Russian actions in Ukraine, commercial ties remain fairly intact, especially in the energy and finance sectors. Two-thirds of Austrian companies operating in Russia, such as Raiffeisenbank (Russia) and Red Bull, plan on staying there, and OMV continues to import gas from Russia.

The extent of Russian influence in Austrian politics

Austria's history as a centre of espionage is due in part to its location in Central Europe. During the Cold War, Austria was a neutral state near the Iron Curtain, allowing it to do business with both sides. The country's lenient espionage laws, which only prohibit spying against Austria itself, have also contributed to its reputation as a "spy haven".

Vienna, in particular, has been described as a "haunt for spies" and the "spying capital of the world". The city is home to numerous international organisations, including the Organisation for Security and Co-operation in Europe (OSCE) and a headquarters of the United Nations, providing ample opportunities for intelligence gathering.

Austrian companies, especially in the energy sector, have deep ties with Russia. Before the 2022 war in Ukraine, Austria relied on Russia for 80% of its natural gas, and one-quarter of all Russian gas deliveries to the EU flowed through the Austrian Baumgarten hub. Austrian banks also have significant exposure to Russian debt.

Cultural ties between the two countries are also close, with a prominent Russian presence in several Austrian cultural institutions. Additionally, several former Austrian chancellors and ministers have taken on roles with Russian companies and organisations after leaving office.

In recent years, there have been several instances of suspected Russian espionage in Austria, including the case of a retired colonel who was convicted of spying for Russia's GRU military intelligence agency for over 25 years. Austria has expelled several Russian diplomats and launched probes into Russian interference following the 2022 Russian invasion of Ukraine, but commercial ties between the two countries remain largely intact.

Overall, while it is difficult to quantify the exact extent of Russian influence in Austrian politics, the two countries have a long history of close political, economic, and cultural ties that continue to shape their relationship today.

Austria's energy interests with Russia

Austria has long been dependent on Russian energy, particularly natural gas. In 1968, Austria became the first Western European country to sign a long-term contract with the Soviet Union for the supply of natural gas. This deal established Austria as one of the primary conduits for Russian gas into Western Europe.

Austria's energy infrastructure has historically been oriented to the east, with the country getting 80% of its gas from Russia before the war in Ukraine. While Austria has taken some steps to reduce its reliance on Russian gas, it still purchased 60% of its gas from Russia in 2022, compared to 80% before the war. In July 2023, 83% of Austria's imported gas was still coming from Russia, while the proportion of EU gas imported from Russia had fallen to 15%.

Austria's continued reliance on Russian gas has led to criticism from other EU countries and accusations that it is not doing enough to reduce its dependence. The Austrian government has pledged to end its dependence on Russian gas by 2027, but critics argue that there are no concrete steps or plans to achieve this goal.

One of the main reasons for Austria's slow progress in reducing its reliance on Russian gas is its tradition of dependence on Russia. Additionally, the country's energy minister has cited its unique circumstances as a landlocked country with an energy infrastructure oriented towards the east.

The energy company OMV, which is partly owned by the Austrian government, has been a key player in the Austrian-Russian energy relationship. OMV has been one of the financial backers of Gazprom's Nord Stream 2 pipeline, which was denounced by both Kyiv and Washington. While OMV has written off some Russian-linked assets, including a stake in a Siberian gas field and the Nord Stream 2 pipeline, it still has a contract to purchase Russian gas until 2040.

The Austrian government's cautious approach to reducing its reliance on Russian energy is also influenced by economic concerns. A sudden stop to Russian gas supplies could lead to a 20% increase in wholesale gas prices for two to six months, impacting the country's economy, which is already facing challenges due to high inflation and a slump in its top trading partner, Germany.

Austria's position on sanctions against Russia

Austria has a constitutionally-mandated status of neutrality, which it adopted in 1955. This has led to a delicate balancing act for the country in its response to the war in Ukraine. While Austria has publicly criticised Russia's actions, it has also stressed the need to maintain diplomatic relations with Moscow.

Austria has supported sanctions against Russia and endorsed European Union sanctions following the invasion of Ukraine. It was the first foreign country that Russian President Vladimir Putin visited officially after his re-election in 2018, and the two countries' longstanding commercial ties remain fairly intact, especially in the energy and finance sectors. Two-thirds of Austrian companies operating in Russia, such as Raiffeisenbank and Red Bull, plan to stay there, and OMV continues to import gas from Russia.

Austria has also expelled Russian diplomats since the war began, joining other European Union countries in declaring a number of Russian diplomats persona non grata. In February 2023, Austria expelled four Russian diplomats for behaving in a manner inconsistent with international agreements, bringing to nine the number of Russian diplomats Austria has expelled since 2020.

However, Austria has come under criticism for granting visas to sanctioned Russian lawmakers to attend a meeting of the Organization for Security and Cooperation in Europe (OSCE) in Vienna in February 2023. The Austrian government defended its decision, arguing it was important to keep channels of communication with Moscow open. As host to the OSCE headquarters, Austria also claimed it was legally obliged to grant visas to representatives of participating nations.

Austria's neutral stance has come under pressure from critics who argue it should take a tougher stance against Russia. However, support for neutrality remains strong among the Austrian public and political establishment.

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