Russia & Austria: a friendship built on history, skis and gas

Vienna - When Russian President Vladimir Putin arrived in Austria’s capital Vienna last Tuesday (24 June), there was not enough time to go skiing, but he probably would have liked to.

There is maybe no better symbol for the special - many would rather call it “awkward” - relationship between Austria and Russia, than the trinity of history, skis, and gas.

Granted, there was much talk about a planned (South Stream) gas pipeline, that would run through Bulgaria, Serbia, and Hungary and, by bypassing Ukraine, bring Russian gas from 2016 on directly to consumers in south eastern Europe, Italy and Austria.

Given the high stakes of Austria’s partly state-owned energy company, OMV, in the gas business in the Central and Eastern Europe (CEE) region and the government's high hopes for a new gas hub in Austria, it is no surprise that Austrian politicians and businessmen are keen on keeping the project alive.

At the moment there is only one gas pipeline (Nord Stream), running through the Baltic Sea to Germany, that connects western European consumers with Russian gas producers without Ukraine as a transit country.

Now Austria is seeking the energy “freedom” that northern Europe bought in 2011, a freedom not from Gazprom’s and the Kremlin’s grip, but from turmoil in Ukraine.

Just as in 2011, there is much criticism of the new pipeline project and in the aftermath of the Crimea crisis, EU energy commissar Guenther Oettinger vowed to delay South Stream.

Bulgaria has already stopped construction on the pipeline, following pressure from the European Commission.

None of this troubles the serene Alpine republic, however. In addition to the signature of the treaty for the Austrian slice of South Stream, Putin was also invited to speak at Austria’s Chamber of Commerce (WKO).

Close economic ties

The economic bonds of both countries are close.

Austria has investments worth €8.5 billion in Russia, while Russian investments in Austria run to about €10.15 billion. Meanwhile Austrian banks have more than €36 billion outstanding loans to Russian borrowers (which makes Austria’s financial sector a strong opponent of harsher Western financial sanctions).

Consequently, the atmosphere between business chiefs and the Russian president in Vienna was jovial, scattered with light-hearted references to a shared past and mutual understanding.

WKO’s president Christoph Leitl said jokingly that Austria and Russia both owned slices of Ukraine 100 years ago. An interjection from the floor, light-heartedly, calling Leitl’s long presidency of the business organisation a “dictatorship”, was answered by Putin in fine German: “But a good dictatorship”.

Political leaders, such as the Austrian president Heinz Fischer, said they also talked to Putin about Ukraine, urging a peaceful resolution of the crisis, and criticised human rights abuses in Russia.

However, the tone in the official talks appeared not to have been too harsh, since the Russian president lightly repelled all critique and quickly returned to geopolitical and economic topics.

The swift change of subject was assisted by president Fischer’s remarks, that the current sanctions against Russia “are not helpful”.

More important than plain facts and deeds was the symbolism of this visit.

Almost a 'state visit'

Dubbing Putin's trip as “working visit” instead of a state visit was a sop to western allies. But with meetings with the president, chancellor and business chiefs, it was all but a state visit. The only element that was missing was the traditional reception by the guard at the airport.

Defying all Western critique, such as from Sweden’s foreign minister Carl Bildt, Austria views itself as an intermediator between East and West.

It may regard actions or sanctions against Russian aggression as understandable, but would rather let others be publicly confrontational. Vienna prefers remaining in the shadows, doing business and offering permanent “open dialogue”.

While this may have been a well-functioning, if sometimes dubious, foreign policy during the Cold War, when Austria really was a neutral country between two blocs (albeit quite closely integrated with the West), today this policy looks increasingly outdated, particularly in view of the country's EU membership.

There may be a small chance that Austria offers Russia a smooth way back into the global community if the Russian president de-escalates the crisis - Putin’s move to revoke Russia’s mandate for use of military force in Ukraine took place on 24 June, just ahead of his visit to Austria.

But even if the geopolitical equivalent of good-cop/bad-cop may work this time, with the EU and other member states as bad cops and Austria as the good one, Vienna's lack of co-ordination with its partners is notable.

A deeper reason for the special Austro-Russian friendship may be the shared longing for the good old times. Austrians love dwelling - in a benign way - on their imperial past.

Russian attention brings back some of this ancient glamour, if only in Austrian minds. It is also evocative of the often glorified 1970s and 1980s, when the popular social-democratic chancellor Bruno Kreisky transformed the country into a diplomatic hub and steered the Republic skillfully through times of stagnation and economic crisis, earning Austria the still popular nickname “island of the blessed”.

This time was also the golden era of another highly cherished Austrian national peculiarity - its obsession with skiing as national sport and means of displaying national grandeur.

When Karl Schranz, a highly successful Austrian alpine ski racer in the 1960s and early 1970s, was in 1972 banned from the Sapporo Winter Olympics (deemed a professional, he wasn’t allowed to participate), the national soul howled in outrage.

Upon his return to Vienna, Schranz was welcomed by thousands of loyal fans as well as the then Chancellor Bruno Kreisky himself at an official reception in the chancellery.

Some 40 years later, it was Karl Schranz who advised Vladimir Putin for the Sochi Winter Olympics 2014. The two got to know each other and became friends during a skiing vacation on the Austrian Arlberg, in 2001.

To prove his gratitude, the Russian president visited the Austrian house at the Olympics, his only visit to any delegation in Sochi.

Austrians were torn between intense indignation over Putin’s visit and secret gratitude for, finally, having been acknowledged as a nation (at least in winter sports) of international standing.

So what’s the relationship between Austria and Russia fundamentally like?

There are important mutual business interests and a somewhat tangled Austrian foreign policy, oscillating between its commitments to European and Western allies and a longing for a long bygone intermediary position between East and West.

There is a yearning for the good old days on both sides, be it for a shared imperial past or times of a prosperous neutral state and a mighty world power, although Austria’s nostalgia is rather romantic and non-serious, while Russian dreams of past grandeur strongly influence its current policies and aspirations.

Finally, there is a sense of Austrian Gemuetlichkeit ("cosiness") and Russian Druzba ('friendship"), which survives unperturbed by any geopolitical storm, domestic upheaval or historic change.

Because for Austrians and Russians alike, no matter what currently sets the world on fire, there’s always some time for a good ski-run, whether in the Alps or the Caucasus.