One of American President John F. Kennedy’s favorite quotes was inspired by Dante’s Inferno: “The hottest places in hell are reserved for those who in time of moral crisis preserve their neutrality.
But what about Austria, where neutrality is enshrined in the Constitution, in the law and in the psyches of this nation of 8.5 million people? Neutrality became the price — or condition — that Austrians paid for national independence, insisted upon by the Soviet Union, after the World War II allies left in 1955.
Today, this means that Austria has a hard time taking a stance and assigning blame in Russia’s war against Ukraine, in particular the failure of the Minsk II agreements of February 2015 to bring peace.
“We are not giving up on Minsk,” Austrian Ambassador to Ukraine Hermine Poppeller said in an interview on April 18. “I think this is the only instrument we have to find a solution for the conflict in the east. Even so, it sometimes seems to be a slow process.”
Slow indeed, but the question of who is to blame for the failure of Minsk brings out the fastidious neutrality of Austria’s official representative.
Pausing before answering in the Austrian Embassy, blessed with a view of St. Volodymyr’s Cathedral in Kyiv, Poppeller replied: “I think responsibility for not implementing you can find on both sides. I would not make a judgment on this.”
And that, in a nutshell, sums up the problems many in Ukraine have with Austrian foreign policy. In a conflict, people want their friends to take their side — especially when the roles of aggressor and victim seem so clear. Russia has violated the basic pre-conditions called for by the Minsk peace agreements: cease-fire, disarmament and return of Ukraine’s eastern borders to its control.
A tram drives past the Hotel Imperial in Vienna on Feb. 17
But Austria is not actually neutral in all areas. While not a NATO member, Austria is a member of the European Union and supports the economic sanctions imposed against Russia for its forced seizure of Ukraine’s Crimean peninsula in 2014 and the current war in the Donbas.
Russia’s annexation of Crimea was “done against international law,” Poppeller said. “We will not recognize that breach of international law.”
Another grievance for Ukrainians is what is seen as Austria’s pro-Russian political and economic stance. The big Austrian energy company, the OMV Group, has strong connections with the Kremlin’s Gazprom. And, as Poppeller acknowledged, many Austrian businesspeople “want the sanctions to end today and tomorrow.” But as long as the EU keeps the sanctions in place, she said, so will Austria. When it comes to the accusation that Austria is pro-Russian, the ambassador said: “I think it is a bit exaggerated.”
Moving further down the list of Ukraine’s annoyances is what is seen as Austria’s friendly attitude towards the money of Ukraine’s oligarchs and other elite while adopting a less-than-rigorous stance on putting an end to money laundering.
The list of those Ukrainians who are known to favor Austria’s real estate or banks includes former Prime Minister Mykola Azarov; former member of parliament Serhiy Klyuyev; presidential chief of staff Boris Lozhkin; and industrialist Dmytro Firtash, who is still fighting U.S. bribery charges from his exile in Vienna.
Why do so many of Ukraine’s elites like to bank, invest or buy property in Austria? “I think you have to ask them,” Poppeller said.
As for whether Austrian banks are engaged in money laundering of Ukrainian oligarchs’ assets, Poppeller says the charge is unfair and even inaccurate. Austria complies with all the anti-money laundering guidelines of the Organization for Economic Cooperation and Development, she said.
“Austria does not belong to those countries which should be named or can be named as being famous havens for money laundering,” Poppeller said. “That’s not the case for Austria.” To further combat money laundering, she said, requires an international effort that Austria supports.
Poppeller is a career diplomat in the Austrian Ministry of Foreign Affairs, which does not favor political appointees as ambassadors. She has also served as the ambassador in Latvia in addition to her one year so far as ambassador to Ukraine.
Her nation has some very clear priorities for strengthening relations.
One of them is to rebuild bilateral trade, which dropped to below 1 billion euros last year for the first time in several years, dipping to just 812 million euros, with Austrian exports dropping to 335 million euros while imports slid to 477 million euros.
Austrian foreign direct investment in 2015 was $2.4 billion, making it the fifth largest investor in Ukraine, she said, with the insurance, financial and banking sectors leading the way.
All is not well, however, because Austrian businesses are not happy with currency restrictions that curtail their ability to repatriate dividends. It would also help if Ukraine had “clear rules for doing business here,” she said. “Clear rules also mean less corruption.” She describes prospective Austrian investors as interested but hesitant.
She believes Ukraine has a potentially transformative gift in its new free trade agreement with the European Union.
“There are so many chances for this country,” Poppeller said. “It could be very competitive on the world market — it has low wages, educated people, an association and free trade agreement. I think one should use this opportunity.”
Another focus is simply to strengthen cultural ties. The Austro-Hungarian Empire ruled parts of western Ukraine for 150 years, until its defeat and collapse in 1918 in World War I. Today, that influence is most visible still in the architecture of western Ukrainian cities.
“Architecture left us a lot of good things,” Poppeller said. “If you go to Lviv or Chernivtsi or other small places, you can still find a lot of architecture which is so European,” Poppeller said. “It gives proof that this part of the world is not east, it’s central Europe. I felt very much at home the first time I came to Chernivtsi.”
The warm feelings are returned, if the Encyclopedia of Ukraine is to be believed.
“Ukrainians look back at the Austrian period with fondness and as a time when strides were made in establishing national consciousness, because of the relatively more liberal policies that came from Vienna,” according to the encyclopedia’s Internet site, which can be found at http://www.encyclopediaofukraine.com. “The Austrian influence on government, transportation and architecture is still felt in the territory known as Halychyna.”
Austria is building on historic ties by setting up a network of honorary consulates throughout the country that, by the time the mission is complete, will place its representatives in Dnipropetrovsk, Lviv, Odesa, Chernivtsi and Kharkiv besides Kyiv. (The consulate in Donetsk was closed because of the war.)
“It so important to see what people are doing outside the capital,” Poppeller said.
The focus extends to the Austrian belief in decentralization and deregulation. Aside from the package of EU aid, Austria also wants to launch a 1 million euro vocational training program to, among other things, help agriculture “not in areas where you have big farms, but small-sized farms in the mountains, to give people a chance to survive in their areas and in their villages,” Poppeller said.
Ukrainians and Austrians have plenty of chances to get to know each other with three relatively cheap flights daily between Kyiv and Vienna from Austrian Airlines as well as flights from Odesa, Dnipropetrovsk and Lviv. “We are really well-connected with Ukraine,” the ambassador said.
Cultural diplomacy will also play a prominent role in bilateral relations, Poppeller said, through film, artistic and other events. “People-to-people contact is what is needed to build up common European values,” Poppeller said.
