Foreign Policy Audit: Ukraine-Austria

12:12 PM 28-4-2016

The discussion paper was written by Daria Gaidai, research fellow at the Institute of World Policy.To download the publication, please, click here.

“Are you aware that Vienna is closer to Ukraine than to the Austrian border with Switzerland?” Almost every discussion on Ukrainian-Austrian relations begins with this phrase. Then the interlocutors mention that only a century ago the Western regions of modern Ukraine were a part of the Austro-Hungarian Empire. However, in reality, multiple cultural, political and economic ties, that united the two nations in the past, now are almost forgotten both in Ukraine and in Austria. Until 2014, the Austrians, as, indeed, a large part of EU citizens, often confused Ukraine and Russia, because they knew almost nothing about the former.
The memory of belonging of some Ukrainian regions to the Austro-Hungarian Empire was only an interesting fact in the bilateral relations, but not their foundation. And, unfortunately, it was sometimes even used as a pretext for neo-imperial jokes. For example, in 2014 the President of the Austrian Federal Economic Chamber, Christoph Leitl, during a visit of President Vladimir Putin called Ukraine an area of common interests and said that “in 1914, Ukraine was a part of Austria, and now, one hundred years later, Ukraine ….” “I am afraid of what you are going to say”, — Putin stopped him. The friendly exchange of jokes on dividing Ukraine in less than four months after the annexation of the Crimea did not cause any adverse reactions of Austrian businessmen who attended the meeting. Not to mention that according to the Russian propaganda it is the Austrian General Staff who “invented” Ukraine in order to confront Russia.
Austrian delegations often visited Ukraine after independence and with interest and enthusiasm they re-discovered Ukraine’s Austrian patrimony. Unfortunately, Ukrainian authorities could not or did not want to make full use of this interest. Let us assume that one of the reasons is that the memory of the Austrian past is limited to Western regions of Ukraine (Galicia, Bukovina and Transcarpathia). For Kyiv and other Ukrainian regions Vienna was the capital of a successful but faraway central European country.
In all fairness it should be noted that such historical amnesia has also affected the Austrian society, for which after the Second World War the imperial past became rather a vivid myth, a fairy tale, but not a foreign policy guide. Eventually, the interest of Austrian citizens in Ukrainian topics of Austrian history, not being fed from the political side (as in the case of the Western Balkans), has faded even more, especially for the younger generation. Today Ukraine for Austria is a region which is close geographically, but is quite distant politically.
Meanwhile, Austria has become a favourite holiday and, even, settlement destination for dozens of Ukrainian politicians and businessmen. A part of the service sector in Vienna has long been adapted for such “successful people” from the former Soviet Union by hiring Russian-speaking staff. Most paradoxically, those who have taken root in Vienna are representatives of the so-called Ukrainian elites that are critical of Ukraine’s European integration, of the Euromaidan etc. (Olexiy Azarov, son of former prime minister, Dmytro Firtash, a known oligarch who is under investigation by the FBI, Serhiy and Andriy Klyuyev). However, it is worth mentioning that they were perceived not as Ukrainians, but as Russians, with whom they maintained close ties and spoke the same language. The level of integration of Ukrainian politicians and their families in the Austrian environment has become even more evident when shortly after the Revolution of Dignity the Ukrainian Ministry of Foreign Affairs asked Austria to facilitate the return of funds, smuggled by former officials. Austria was the first country in the EU that decided to freeze the accounts of Ukrainians suspected of corruption .
This analysis aimes to determine main interests of the parties and points of contact, besides giving a general assessment of Ukrainian-Austrian bilateral relations over the last decade. Currently, Austria, with its close ties with Russia, is considered mainly as a barrier to Ukraine’s rapprochement with the EU. But there is “another” Austria that saw and sees Ukraine’s considerable economic potential, wants to be a mediator between East and West and that is not afraid of difficulties of doing business in post-Soviet realities. This brief is an attempt to slightly change the angle and look at Austria as a valuable partner for Ukraine, as another “door” through which our state can enter into the common European economic and cultural space.
In the short- and mid-term perspective, Ukraine’s interests regarding Austria are centered around two things: sanctions and investments. Today, Ukraine’s key interest is in preserving the unity of the European Union in its support for Ukraine and the continuation of sanctions against Russia until clear progress is achieved in the implementation of the Minsk Agreement. Ukraine’s second key interest is increasing Austrian investments in the Ukrainian economy. It is these interests that Ukrainian representatives mention most often, while difficulties arise with defining other priority areas of cooperation. This is attributed to both a lack of understanding of Austria’s interest regarding Ukraine and a lack of strategic vision of Ukraine’s interests.
Among other Ukraine’s important interests regarding Austria, the following stand out: joint fight against economic crimes, particularly money laundering and tax evasion; adopting successful Austrian experience in public health, energy efficiency, alternative energy, environment protection, and tourism.
Austria’s interests regarding Ukraine are closely linked to its economic interests in the region in general. In general, Vienna’s interests can be formulated as follows:
forming a general free-trade area from Lisbon to Vladivostok, i.e., promotion of close economic cooperation between the EU member states and the members of the Eurasian Economic Community;
the soonest possible restoration of peace and stability in the region;
reducing tensions in the region by establishing multilateral security dialogue;
strengthening economic cooperation with Ukraine by getting new opportunities for Austrian investors;
expanding economic and cultural ties with Ukraine’s Western regions which used to be part of the Habsburg Monarchy.

This report was conducted within the project of the Institute of World Policy “Ukraine’s Foreign Policy Audit”. This project is implemented with the support of the Black Sea Trust for Regional Cooperation of German Marshall Fund (BST GMF) and Ukraine National Initiatives to Enhance Reforms (UNITER) program, which is funded by the United States Agency for International Development (USAID) and implemented by Pact Inc.