Austria's Foreign Minister, Alexander Schallenberg, has said that Russia will always remain an important partner for Europe, and to think otherwise would be "delusional". In an interview with
Reuters, Schallenberg defended Austria's second-biggest bank, Raiffeisen Bank International, against criticism for doing business with Russia. Schallenberg said it was unreasonable to single out the lender while many other Western firms also operate in Russia. He added that while Austria would loosen ties with Russia, it cannot happen overnight. Schallenberg also noted that Russia is part of European culture, and that it is the biggest neighbour to Europe.
Austria has positioned itself as a bridge between east and west and has made Vienna a magnet for Russian money. However, the country is also part of the wider Western alliance that has imposed sanctions on Russia after its invasion of Ukraine. Austria still imports Russian gas, but is seeking to reduce its dependence over the coming years. Despite this, some Austrian officials are said to hope for a quick conclusion to the conflict in Ukraine and a return to more normal relations with Russia.
Earlier this year, the US sanctions authority launched an inquiry into Raiffeisen's business dealings in Russia, which increased scrutiny of the Austrian lender. Raiffeisen is deeply embedded in Russia and is one of the only two foreign banks on the Russian central bank's list of 13 systemic institutions, underscoring its importance to Russia's economy. However, the bank's participation in a Russian scheme to grant loan payment holidays to troops fighting in Ukraine triggered sharp criticism from investors.
Schallenberg emphasised that it is for Austria to enforce sanctions and pointed out that other Western banks also do business in Russia. He said that Austrian companies have to abide by the rules, including the European Union sanctions. Schallenberg favoured enforcement of existing European sanctions over introducing further measures, saying that massive sanctions packages had already been imposed and needed time to work. He added that 91% of Western companies are still operating in Russia, with a "who's who" of the Western banking world represented there.
Schallenberg's comments reflect Austria's complex relationship with Russia. Austria is part of the European Union, but it has sought to maintain close economic ties with Russia despite the ongoing conflict in Ukraine. The country has also played a role in diplomatic efforts to resolve the crisis. In 2015, Austria hosted talks between Russia, Ukraine, Germany and France, which led to the Minsk II agreement aimed at ending the fighting in eastern Ukraine. However, the agreement has been violated repeatedly, and the conflict shows no sign of ending anytime soon. Photo by Bundesministerium für Finanzen, Wikimedia commons.