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Austria fears losing huge projects due to new US sanctions against Russia

August 07, 18:23 UTC+3 VIENNA

Vienna sees restrictive measures on the financial sector as another tangible threat

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© Valery Sharifulin/TASS

VIENNA, August 7. /TASS/. New US anti-Russian sanctions might lead to Austrian companies losing multibillion-dollar projects in Russia, the Austrian Federal Economic Chamber told TASS.

Commercial Counsellor of the Austrian Embassy in Moscow Rudolf Lukavsky prepared a special analysis of a possible impact of the new US sanctions against Russia on Austrian business, and also gave a detailed account of the impact of the existing EU restrictions. According to him, before practical application of the new US law "it is difficult to fully assess the impact of sanctions."

"US sanctions against Russia will have a strong and negative impact on Austrian goods and exports to Russia when the law finally comes into force. The question remains - what is the extent of that impact? It is possible that Russia will take retaliatory measures," Lukavsky told TASS.

Industry and finance

According to Lukavsky, from Vienna's point of view, there are several aspects that can adversely affect Austrian companies. He sees the greatest threat in potential expansion of US sanctions on such important sectors for Russia as railways, shipping, metallurgy and mining.

"First of all, state-owned company Russian Railways and the state shipping company Sovcomflot. The mining and metallurgical industry is also one of the most important Russian industries. Customers in these areas account for the bulk of Austrian exports, and if sanctions are imposed on these enterprises, it will definitely become a huge obstacle for Austrian exporters," he said.

According to him, "Because of large cuts in investment in the private and public sectors due to existing sanctions Austrian engineering industry has already been seriously affected, and this can lead to new and long-term losses." "Especially with large infrastructure projects, such as expanding the network of Russian railways, the pressure of competition from China is growing, and new sanctions can lead to losing multi-billion projects that could help Austrian suppliers," Lukavsky said.

In addition, Vienna sees restrictive measures on the financial sector as another tangible threat. "As part of our research on the sanctions’ impact, we have seen that in some cases, Russian economic partners suffer only from US sanctions, and not from EU sanctions. In the future, under certain circumstances, European banks may start to refuse such transactions in order not to be influenced by US sanctions. This can harm not only Austrian exporters that are happy to use the services of EU banks, but also those Austrian financial institutions that are involved in large Russian projects," he added.

Oil and gas

Austrian businessmen also fear the extensive impact of US sanctions on their investors, who are involved in joint projects with Russia in extraction and transportation of hydrocarbons.

"Of course, it is necessary to mention the Nord Stream 2 gas pipeline project. Oil and gas company OMV might suffer from US sanctions as an important financial and strategic partner. Other Austrian companies suppliers of materials for Nord Stream - 2 pipes can also feel the new US sanctions. First of all, this includes suppliers of components, their losses could amount to hundreds of millions of euros," Lukavsky said.

Cancelling EU sanctions

At the same time, the Austrian Economic Chamber noted that its president Christoph Leitl sees the new US sanctions as an opportunity to abolish the anti-Russian measures of the European Union. According to him, the new US sanctions should become a signal to Europe to unite. "Europe can use this as an excuse to abolish existing EU sanctions against Russia," according to Leitl’s statement available to TASS.

He also supports creating a single free trade zone from Lisbon to Vladivostok, as it will strengthen the positions of Europe and Russia in global competition. "Russia with its energy resources and Europe with their know-how can perfectly complement each other," the Chamber’s President said.

On August 2, US President Donald Trump signed the bill envisioning tougher sanctions against Russia, Iran and North Korea.

The new measures allow fining European companies for participation in joint energy projects with Russia, particularly in Nord Stream - 2.

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