Since her last interview with the Kyiv Post in April, Austrian Ambassador Hermine Poppeller is noticing significant improvements in Ukraine.
For example, she is happy with the banking sector reform where the National Bank of Ukraine liquidated more than 90 dysfunctional banks and took steps towards liberalization. She also notices progress in Ukraine’s healthcare, pension and education updated legislations, some progress in the gas and energy sector, value-added tax refunds and the fiscal services.
“It’s not the case that everything is bad, there are improvements, otherwise companies would not stay here and companies would not do business here,” Poppeller told the Kyiv Post on Nov. 22 in her office.
But even though there has been progress, Ukraine should be working at a much faster speed to implement standards that will make it closer to the European Union.
“It’s in the interest of Ukraine to improve… it’s for Ukrainians to have a better business reputation,” the ambassador said. “This is the reason why not only myself but also my colleagues are always saying: speed up these reforms.”
During her previous interview with the Kyiv Post, Poppeller warned of the slow pace of progress in Ukraine’s judicial system.
When asked if she was upset specifically with Ukraine’s President Petro Poroshenko and whether she considered the president to be the stumbling block delaying the establishment of an independent anti-corruption court, the ambassador avoided giving a straight answer.
“The legal system is definitely the sector which needs a lot of attention, and which needs (justice) reforms,” she said. “Foreign investors should be able to invest in this country not having to fear for their investments.”
Ukraine must establish an anti-corruption court in a short time frame since the National Anti-Corruption Bureau and State Investigation Bureau work is worthless unless there is a just court system.
“Their work is finished when the case comes to court. So if you do not have a court to treat all of these cases the work is going to be stalled and that is a big danger.”
Back in Austria
On the EU side, questions revolve around Austria’s former Foreign Minister Sebastian Kurz who is set to become Austria’s chancellor as he won the 2017 Austrian election on Oct. 15.
Kurz will be representing the country’s conservative-leaning party with social democrats following the majority. The more controversial group that made it into the Austrian parliament’s National Council, one of the two houses that has most power in parliament, is the Freedom Party of Austria (FPO) known for their pro-Kremlin rhetoric and support of Russia’s annexation of Crimea. Kurz has spoken with all three parties and is now establishing a coalition government.
On Nov. 6, two of FPO’s members Linz Deputy Mayor Detlef Wimmer and newly-elected Member of Parliament Hans-Joerg Jenewein visited a forum in Crimea organized by Russia. Ukrainian Ambassador to Austria Oleksandr Scherba said that they have violated Austria’s neutrality policy.
“Everyone in Austria is free to travel, and there is no such thing as a travel ban,” Poppeller said. “It’s their own decision… it’s up to them. Nobody encouraged them.”
The two Austrian’s were not the only European politicians who visited the controversial forum, she said. “They were only two among 50, let’s be clear about that.”
But even if the FPO will be part of the National Council, Kurz will make sure that his pro-EU agenda dominates, she argues. “I would not be worried about Austria drifting away from Europe.”
In addition, Austria’s does not have much influence on the EU’s sanctions policy against Russia.
“It is the EU who decides to put up sanctions against Russia, and Austria is part of the EU, (so) we are also in favor of these sanctions.”
War solutions
Perhaps one would want to hear a more concrete view from Austria as Russia’s war against Ukraine in eastern Donbas continues to take more lives. So far, more than 2,770 Ukrainian soldiers have been killed.
In order to end the conflict caused by Russia, Poppeller suggests Ukraine abide by the Minsk agreement as her country is in favor of these talks among Ukraine, Germany, France and Russia.
Austria is also now the chair of the Organization for Security and Cooperation in Europe and has been providing technical support, night cameras to help OSCE’s monitoring mission to follow the situation.
Austria is not a NATO member and positions itself as a neutral country.
“That does not mean that we are not supporting Ukraine to develop but we are not able to support militarily,” Poppeller said.
So far Austria provided 4.8 million euros in humanitarian assistance for projects in the eastern part of Donbas during 2014–2017 covering mine risk awareness trainings and marking contaminated areas. It also supports rural development projects.
Visa-free EU
As Ukraine’s military is fighting off Russia on its eastern border, other Ukrainians are taking advantage of their country’s close proximity to Austria.
Poppeller is very supportive of Ukrainians visiting Austria and thinks that this will enhance Ukraine’s EU integration.
People crowd the Christmas market in front of Vienna’s City Hall on Nov. 26, 2015 after Vienna officially lit up the city for the upcoming Christmas season. (AFP)
“Whenever I fly to Austria (from Ukraine) all of the flights are booked,” she said. In addition to flights, there are a number of bus connections and starting in December there will be a direct train from Kyiv to Vienna.
“So there is demand, and people are travelling,” Poppeller said. “And I am very happy that a lot of Ukrainians travel to Austria especially young people.”
Harboring oligarchs?
Some Ukrainians have been very frequent Austrian visitors in the past, and some purchased Austria’s most expensive real estate.
These are Ukraine’s richest such as Dmytro Firtash, an oligarch who is now under arrest in Austria, Oleksiy Azarov, the son of former ex-Prime Minister Mykola Azarov, and Andriy Klyuev, former chief of the National Security and Defense Council, all whose assets have been frozen in 2014 during the EuroMaidan Revolution.
“I do not have the impression that Austria is harboring (oligarchs) anymore,” Poppeller said. “Austria now has very strict regulations concerning money laundering.”
Austria is now a member of the Common Reporting Standards which calls on jurisdictions to obtain information from financial institutions and exchange that information at the global level. This is meant to fight tax evasion and money laundering.
The ambassador considers the image of oligarchs in Austria to be “highly exaggerated.”
“I do not see so many oligarchs in Austria,” she said. “There are quite a number of other countries where Ukrainian oligarchs are also living, having real estate and big investments there.”
Ukraine-Austria business
The ambassador encourages Ukrainian businesses to try to enter Austria’s market.
“It’s not easy, but it’s possible,” she said since EU product standards are some of the most rigorous in the world. “But it can be done and then you can export your products all over the EU.”
For example, she said that Ukraine’s Scherba is very active in promoting Ukrainian businesses especially in the food market where he organizes meetings with managers of retail chains such as Spar and Billa.
However, Ukraine needs to learn how to market itself, especially its food industry such as its fruits and berries, she said.
When it comes to Austrian businesses in Ukraine, the picture is more active.
Austrian businesses are some of Ukraine’s most committed providing over 32,000 jobs and attracting $1.3 billion in foreign direct investments. Almost all of the Austrian companies stayed in Ukraine during the difficult economic 2013–2017 period.
Austria’s strongest Ukraine presence is noticed in the banking and insurance sectors including players such as Raiffeisen Bank Aval, UNIQA, Vienna Insurance Group and Grawe. Other companies include Fischer Sports based in Mukachevo with a 1,500-person plant making skis and luxury car parts. Frey Wille, Agrana, Billa, EuroGold are other examples.
Poppeller closely collaborates with more than 150 Austrian businesses in Ukraine. Many are noticing positive changes within the business environment.
“They see that there is money around,” she said. “This is quite a positive development in the economic sector and sometimes I wonder why the growth is mentioned only to be two percent.”
She thinks that it is higher in some sectors such as construction, real estate, IT, and agriculture.
One example is the positive outcome of the Ukrainian Business Forum in Vienna on Oct. 13 where there have been about 150 participants, both Ukrainian and Austrian companies.
“Participants told me that the mood at this business forum was much, much better than last year,” Poppeller said. “The mood is something we should not underestimate.”
To harvest on the positive mood, Austria has a strong network of six consulates across Ukraine. The network lets the ambassador nurture relationships with businesses.
“It doesn’t help if I’m there visiting once in four years and nothing else happens.”
