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Opinion
July 6, 2018 www.intellinews.com I Page 26
VIENNEAST INSIGHT:
How Central Europeans learned to stop worrying and love Russian gas
Marcus How and Adam Urosevic of ViennEast
On June 5, Russian President Vladimir Putin visited Vienna, meeting his Austrian counterpart, Alexander Van der Bellen, as well as the chancel- lor, Sebastian Kurz. The occasion was the 50th anniversary of the first gas delivery from Russia to Austria. Despite an unexpectedly audacious grill- ing by Austria’s flagship interviewer, Armin Wolf
– which was conducted in advance in Moscow – Putin received a warm welcome from his hosts.
Hello Gazprom, my old friend
While there, Austria’s partly state-owned energy group, OMV, signed agreements with Gazprom to extend the gas supply until 2040. Austria’s commitment to the Nord Stream II gas pipeline project, which will deliver Russian gas directly to Germany, was also affirmed, with Putin and Kurz discussing how the project would be financed.
Putin also mooted that Vienna could serve as
the venue for a meeting between himself and US President Donald Trump, acknowledging how Austria had proved a reliable ally in declining to follow the decision of the majority of its European peers to expel Russian diplomats in response to the poisoning of Sergei Skripal in the UK.
The visit was a microcosm of Austro-Russian relations. Austrian neutrality was played up; but as ever, this post-war institutional reflex served as a mask for Austrian business interests, especially in the energy sector. And it is these material factors that colour policy stances in Central Europe vis-à-vis Russia more than anything else.
Russian President Vladimir Putin with Austrian Chancellor Sebastian Kurz.
The reluctantly spited face
Although Austria is a unique case in many respects, it is an insight into the limits of the “Russia-doves-axis” to swallow the further extension of sanctions against Russia, although it is important to disentangle economic cooperation and lobbying for an improvement in EU-Russian relations from the sanctions regime, as they are not necessarily intertwined.
The sanctions regime has locked most of the Russian systemic economy from the EU financial system. The EU manufacturing sector – such
as the automotive, aerospace, shipbuilding and defence industries – has also taken a hit on account of import-export restrictions. Contracts have been cancelled, projects suspended, and cooperation curtailed. The EU sanctions on Russia prioritise principle over profit, specifically at a cost of €40bn to the EU as of 2017.
However, despite an overall decline in the EU and Russia’s economic interdependence, Central European dependence has actually grown. For example, Austria (as well as Germany) imported record amounts of gas from Gazprom in 2017. Nord Stream II marks an attempt to increase this dependence further yet.
This trend has been entirely shaped by material, rather than ideological, concerns. Despite the noise from certain populist quarters, Central European states (not to mention Poland) have no particular political affinity with Russia, even