Austria is considered within the European Union to be a member that cultivates especially close ties with Russia. President Vladimir Putin of Russia can count on support from Vienna.
In E.U. negotiations about tougher economic punishment against Russia, Austria made sure large Russian banks VTB and Sberbank, both which manage their European affairs from Vienna, were excluded from a new round of tougher sanctions.
Austria wanted to protect its troubled banking sector from further disruptions, reported the newspaper Wiener Zeitung. VTB and Sberbank didn’t respond to inquiries, nor did the Austrian Foreign Ministry have a comment before Handelsblatt went to press.
The United States has placed VTB, Bank of Moscow and Russian Agricultural Bank on the sanctions list, according to the U.S. Treasury Department. All large banks whose majority of shares are owned by the Russian state are affected by the sanctions. The only exception is Sberbank.
Sanctions imposed by the European Union and the United States are in response to Russia's behavior in the Ukrainian civil war. The West accuses Russia of supporting the pro-Russian separatists and of not supporting peace efforts. Moscow has rejected the accusations.
With the exemptions insisted upon by the Vienna government for Russian banks in Austria, Chancellor Werner Faymann and his finance minister, Michael Spindelegger, have achieved an important victory for the small country’s crisis-hit financial sector.
The European headquarters of the large Russian banks have excellent political connections in Vienna.
The exceptional treatment of the banks in Austria might find widespread acceptance. The Raiffeisen Bank International and Bank Austria in eastern Europe want to maintain good relationships with Moscow. Sanctions against Sberbank and VTB would have increased fears about the security of savings deposits in Austria and other E.U. countries. Many observers even feared a panic, but now that’s been avoided.
The European headquarters of the large Russian banks have excellent political connections in Vienna. The head of the supervisory board of Sberbank Europe is Siegfried Wolf. The former manager of Magna International was recently appointed chairman of the supervisory board of the Austrian industry-holding stock corporation ÖIAG, whose portfolio includes the energy giant OMV.
The oil and gas company, which has cultivated a close partnership with Russia's natural-gas giant Gazprom for years, is the largest market-listed company in the Alpine republic.
Some experts in Austria said the E.U. sanctions would not have a significant effect on Moscow.
“We interpret the direct consequences of the targeted E.U. sanctions as manageable for the Russian economy,” said an analyst at the largest Austrian bank, Raiffeisen, this week.
German banks gave stronger backing to the tougher E.U. sanctions against Russia.
“In particular, the prohibition of longer-term financing for Russian state-owned banks decreed by the E.U. and the USA will have a palpable effect on the external financing of the Russian economy,” said Michael Kemmer, the Association of German Banks’ chief executive officer, on Tuesday.
“There will also be certain effects on our own economy, but these are to be accepted — it is a matter here of the primacy of political decisions.”
Mr. Kemmer expects the negative impact on creditors in the European Union will be limited as long as Russian banks fulfill their debt servicing obligations.
Hans-Peter Siebenhaar is Handelsblatt’s correspondent in Vienna. He can be reached at: [email protected]