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Austria - Foreign Relations

The 1955 Austrian State Treaty ended the four-power occupation and recognized Austria as an independent and sovereign state. In October 1955, the Federal Assembly passed a constitutional law in which "Austria declares of her own free will her perpetual neutrality." The second section of this law stated that "in all future times Austria will not join any military alliances and will not permit the establishment of any foreign military bases on her territory." The date on which this provision passed--October 26--became Austria's National Day. From then, Austria shaped its foreign policy on the basis of neutrality.

The end of the Cold War enabled Austria to move from its peripheral position at the borderline between "East" and "West" closer to the centre of a larger Europe. The East-West conflict, which had been the determining factor before the disintegration of the Soviet Union and the consequent collapse of Communism, was replaced by new forms of partnership and cooperation across Europe.

In this context, Austria embarked on a new and important course: On January, 1 1995, it joined the European Union (EU). Since then, it has already held the Presidency of the EU Council twice, once in 1998 and in 2006. For Austria, its EU membership not only entailed its participation in a successful and future-oriented economic project that it had wanted to join for a long time, but it also offered the opportunity to become part of a peace project promising stability and security on the European continent. With this in mind, Austria has since focussed its efforts on fostering the integration of neighbouring states in Eastern and Central Europe and the western Balkans.

In February 1995, Austria accepted the invitation to participate in NATO's Partnership for Peace. Under the Individual Partnership Programme, Austria therefore supports NATO in peace missions, crisis management activities and rescue operations in disaster areas. Austria is thus continuing its long-standing tradition of active membership of the United Nations, the Council of Europe and the Organization for Security and Co-operation in Europe (OSCE). In this context, Austria participated, for instance, in missions in Kosovo, Bosnia-Herzegovina and Afghanistan.

Through its membership of international organisations, like the United Nations, the Organization for Security and Co-operation in Europe and the Council of Europe, Austria has undertaken every effort to support and proactively contribute to their peace and security policies. In this spirit Austria has been actively participating in UN missions in the Middle East (UNDOF, UNTSO), in Cyprus (UNFICYP) and in Africa (UNOWA) by providing troops and also by dispatching personnel to a large number of other UN and OSCE missions. In recent years, Austria began to reassess its definition of neutrality, granting overflight rights for the UN-sanctioned actions against Iraq in 1991 and Libya in 2011.

Austrian leaders emphasize the unique role the country plays both as an East-West hub and as a moderator between industrialized and developing countries. Austria is active in the United Nations, having been elected to a seat on the UN Human Rights Council in May 2011 and previously holding a non-permanent seat on the UN Security Council from 2009 to 2010. Austria has participated in UN peacekeeping missions since 1960, with particular emphasis on the Balkans. It attaches great importance to participation in the Organization for Economic Cooperation and Development and other international economic organizations, and it has played an active role in the Organization for Security and Cooperation in Europe (OSCE). Austria has participated in the UN-mandated International Security Assistance Force (ISAF) in Afghanistan since 2002. In August 2005, Austria deployed 93 soldiers to the northern Afghan city of Kunduz to help support the parliamentary and provincial elections. Austria currently has three military and five police personnel serving in Afghanistan, as well as customs trainers in neighboring states.

Vienna hosts the Secretariat of the OSCE and the headquarters of the International Atomic Energy Agency, the UN Industrial Development Organization, and the UN Drug Control Program. Other international organizations in Vienna include the Organization of Petroleum Exporting Countries, the International Institute for Applied Systems Analysis, the Comprehensive Test Ban Treaty Organization, and the Wassenaar Arrangement (a technology-transfer control agency).

Austria traditionally has been active in "bridge-building to the east," increasing contacts at all levels with eastern Europe and the states of the former Soviet Union. Austrians maintain a constant exchange of business representatives, political leaders, students, cultural groups, and tourists with the countries of central and eastern Europe. Austrian companies are active in investing and trading with those countries as well. In addition, the Austrian Government and various Austrian organizations provide assistance and training to support the changes underway in the region.

Austria has found new and far-reaching opportunities to strengthen its position in the world. Readiness to actively secure peace and combat misguided developments on the world stage are among the priorities of Austrian foreign policy, both within the Union and internationally. In particular, the activities launched by Austria in this context include negotiation diplomacy, crisis management, stability policy as well as disaster relief and reconstruction.

Austria also contributes to the international efforts to pursue a climate-sensitive energy policy by undertaking measures aimed at a sustainable national environmental and energy policy. In addition to its own strict national legislation Austria has also adopted additional provisions in the field of landscape conservation which had been agreed upon within the European Union. Austria abides by its decision to remain a nonnuclear country, which was taken just before the commissioning of the Zwentendorf nuclear power plant. This followed a clear rejection of nuclear power by Austrian voters in a referendum. Against this background, nuclear power plants in neighbouring countries are a particular concern of Austria's safety interests.

By 2009 Austria's engagement with the world was slipping and narrowing, for many reasons. Though Austrians -- because of the presence of many international organizations in Vienna, long-standing peacekeeping deployments, and (since January 2009) membership in the Security Council -- think of the country as internationally active, in fact real interest in foreign policy among the public, media, and practicing politicians appeared very low. Austrian foreign policy engagement was narrowing to a few core national "interests": promoting commerce (which does encourage positive engagement in southeastern Europe and beyond, to include in exploiting Caspian energy resources); anti-nuclear and disarmament policies; labor and agricultural market protectionism (Austria is also a leading voice in the EU against agricultural GMO crops and products); and Balkan stability. Austria has identified the Black Sea region and countries along the Danube River as additional focus areas of its foreign policy. Austria has been an EU member since 1995, but its population is among the most euro-skeptical and Austrians appear to have become increasingly isolationist in their own attitudes about engagement in international affairs, particularly if these have a military component) Russian oligarchs are significant portfolio investors in Austria. In mid-2007, Oleg Deripaska purchased via Rasperia Trading a 25% share in Austro- STRABAG, Europe's sixth largest construction conglomerate, for EUR 1.1 billion ($1.5 billion). At the same time, Deripaska entered a deal via Russian Machines (a subsidiary of Basic Element Holding) to borrow EUR 1 billion ($1.7 billion) to obtain a 20% share in the Canadian automotive supplies company Magna with it, Austrian subsidiary Magna Fahrzeugtechnik (MSF). Austria is highly dependent on Russian natural gas -- much less so oil -- covering 62% of Austrian gas consumption as of 2008. In fall 2006, Austrian oil and gas leader OMV extended until 2027 its contracts with Gazprom for gas deliveries of 7 billion bcm/annum. Gazprom also received the right to market its gas products by itself in three Austrian states (Carinthia, Styria, and Salzburg). Gazprom founded a Vienna-based trading company, Centrex, to market gas in Austria and neighboring countries. OMV Gas (a wholly-owned subsidiary) currently operates the Central European Gas Hub (CEGH), a web- based trading platform in operation since 2005 offering commercial, logistical, and auctioneering services to gas traders. A February 2008 agreement gave Gazprom the option of a 50% stake in the CEGH and allowed for joint gas storage as well. As agreed in November 2008, from 2009 OMV will hold only 30% of the CEGH. It sold 20% to the Vienna Stock Exchange, while Gazprom's stake was divided between Gazprom Germania (30%) and Centrex (20%). The two leading Austrian banks in Russia are Raiffeisen International/RI (a fully consolidated subsidiary of the Raiffeisen Zentralbank/RZB with responsibility for emerging Europe) and Bank Austria- Creditanstalt/BA-CA, a member of the Italian UniCredit group with responsibility for eastern/southeastern Europe. In 2007, RI created Russia's largest foreign bank by merging the JSC Impexbank into its Russian subsidiary ZAO Raiffeisenbank, founded in 1996. BA holds 100% of ZAO UniCredit Bank (the former International Moscow Bank) and the Russian investment bank UniCredit Aton. RI is the seventh largest bank in Russia and the number one foreign bank, while BA is the tenth largest Russian and third largest foreign bank. The Russian VTB Bank Austria, formerly Donau-Bank, was established in Vienna in 1974 and is a specialist in financing trade with Russia and other countries from the former Soviet Union (CIS), portfolio management, and structuring and syndicating loans for Russian and CIS clients. In 2007, VTB parent JSC VTB Bank (the former Vneshtorgbank), in which the Russian government holds a majority, reorganized VTB Bank Austria as its regional headquarters for Western Europe corporate and trade financing (the former Western European headquarters, VTB London, became responsible for investment banking). Austrian statistics show total trade between Austria and Russia of EUR 4.4 billion in 2007 ($6.3 billion at the current rate of exchange of USD 1/EUR 0.70, a 5% drop from 2006 (in part due to Euro strength), but up 11% from 2005. In March 2008, reacting to weak bilateral trade in 2007, Austrian Economics Minister Martin Bartenstein and Russian Science and Education Minister Andrei Fursenko agreed to promote cooperation in investment, innovation and technology through a bilateral "Business Council" that convenes every six months. A weak 2007 masked strong expansion since 2000, when bilateral trade was less than half its current size (EUR 1.9 billion / $2.7 billion) and was tilted in favor of Russia (Austrian exports of EUR 655 million / $936 million versus imports of EUR 1.2 billion / $1.7 billion). Since 2000, Austrian exports to Russia had grown much faster (295%) than imports from Russia (48%) or Austrian exports worldwide (65%). In the first half of 2008, bilateral trade was up 23% (EUR 2.6 billion / $3.7 billion) over the same period in 2007. Former Russian intelligence officer Sergei Skripal and his daughter Yulia were found poisoned in Salisbury, Britain, March 19, 2018. Vienna chose not to expel Russian diplomats as a response to the poisoning of double agent Sergei Skripal, saying it wants to keep dialogue with Moscow open. Some European opposition figures say the move will only create problems. Despite more than a dozen European nations expelling Russian diplomats over the Skripal case, not every nation or politician is on board. Dissenting voices are starting to be heard, including that of the Austrian government. Speaking to Sputnik following the announcements by various EU and other European countries, Austrian government spokesman Peter Launsky-Tieffenthal said 27 March 2018 that Vienna "will not take any measures at the national level, we will not expel diplomats.... The reason for this is that we intend to keep open channels of dialogue with Russia. Austria is a neutral country and a kind of bridge between East and West. But we support the decision to recall the EU ambassador from Moscow."




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Page last modified: 03-04-2018 18:10:42 ZULU