BSSB.BE intellinews.com 02.07.2018
Danube Ex-USSR Europe
* How Central Europeans learned to stop worrying and love Russia
On June 5, Russian President Vladimir Putin visited Vienna, meeting his Austrian counterpart, Alexander Van der Bellen, as well as the chancellor, Sebastian Kurz. The occasion was the 50th anniversary of the first gas delivery from Russia to Austria. Despite an unexpectedly audacious grilling 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.
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 if some of their citizens tend to view it as a more trustworthypartner than the US.
- The increase in gas dependency in certain countries reflects the difficulties of swiftly developing viable alternative energy sources. The fixed nature of gas infrastructures makes it far too costly for the import of, for example, US liquefied natural gas (LNG) via Lithuania or Croatia to be viable.
Political posturing, especially by populists, can thus largely be relegated to secondary status with respect to providing a clear outlook of the EU policy consensus on Russia. This is illustrated by Slovakia: former Prime Minister Robert Fico repeatedly called the Russian sanctions into question, but this was nothing more than populist tub-thumping. Slovakia, which earns a hefty fee on the transit of Russian gas via Ukraine, stands to lose considerably from Nord Stream II.
The publication is not an editorial. It reflects solely the point of view and argumentation of the author. The publication is presented in the presentation. Start in the previous issue. The original is available at: intellinews.com