The announced sanctions would “of course be complied with” after the corresponding decision was taken by the EU. These would hit the domestic economy “punctually”. The investment climate will deteriorate in Russia and Ukraine. A warning is given against excessively severe penalties.
Due to the recent escalation, the Chamber of Commerce expects the investment climate in Russia and (East) Ukraine to deteriorate significantly. Should there be further punitive measures by the EU, the consequences would have to be checked carefully, it was appealed. You shouldn’t do most of the damage to yourself.
“Economy as a bridge builder”
Basically, the appeal was made for the West to keep the channels of communication with Russia open. “All means for a peaceful settlement of the conflict must be used,” said WKÖ Secretary General Karlheinz Kopf (ÖVP) in a broadcast on Tuesday. “Business can and will continue to play the role of a bridge builder here.”
At the moment, business is “going on as usual”. There are currently no major direct effects on the real economy in either Ukraine or Russia. The Austro companies in the Ukraine, which is threatened by security, will continue to be supported on the spot in Kiev. Of course, the foreign trade center in Moscow is also the contact point for domestic companies operating in Russia.
Russia’s President Vladimir Putin was received in Austria in 2014 and also visited the WKÖ headquarters on the Wieden in Vienna. When the President of the Chamber of Commerce at the time, Christoph Leitl (ÖVP), referred to the repeated meeting with Putin because he had been re-elected head of the WKÖ several times, Putin jokingly commented with the word “dictatorship”. At that time, Austria was the first EU country that Putin visited after the annexation of Crimea.
Sixth largest investor in Ukraine
As reported, Austria is the sixth largest foreign investor in Ukraine, with more than 200 Austrian branches and investments of around $1.7 billion, with most of it located in western and central Ukraine. Around 20 companies operate in Europe’s largest country, whose borders are within the continent, with production facilities in various sectors such as the automotive supply industry, alpine and cross-country skis, fruit preparations, building and insulating materials, household products and the like. Raiffeisen and insurance companies are well represented in the financial services sector. The trade volume between Austria and Ukraine in 2021 from January to November was around 1.5 billion euros.
Around 650 Austrian companies are active in Russia with investments of around 4.6 billion euros, and vice versa Russian companies in Austria with around 21.4 billion euros. This makes Russia the largest investor in the Alpine Republic after Germany. Austrian companies invest particularly heavily in Russia in the areas of wood and paper processing, banking and construction as well as the food processing industry, but also in the areas of energy, packaging and automotive.
2.1 billion euros from exports
After a record result of 3.5 billion euros in 2013, the export of Austrian goods to Russia fell by 46 percent by 2016. In 2021, our exports are expected to reach only around 2.1 billion euros, making Russia 16th in the world. The reasons for this were partly the weaker economic situation in Russia, the strong devaluation of the ruble, but also to a large extent the sanctions as a result of the Crimean crisis and the conflicts in eastern Ukraine since 2014 and Russian countermeasures against European companies.
Source: Nachrichten
