Austrian minister says Russia will stay essential for Europe

Stock Markets 2 hours in the past (Mar 22, 2023 04:29AM ET)

By John O’Donnell and Alexandra Schwarz-Goerlich

VIENNA (Reuters) – Russia will at all times stay essential for Europe, Austria’s international minister mentioned, saying that to assume in any other case was delusional.

Alexander Schallenberg additionally defended the nation’s second-biggest financial institution, Raiffeisen Financial institution Worldwide, saying it was unreasonable to single out the lender for doing enterprise in Russia whereas so many different Western corporations did the identical.

“To assume that there will not be Russia anymore and we are able to decouple in all areas is delusional,” Schallenberg informed Reuters, including that whereas Austria would loosen ties this “cannot occur in a single day”.

“Dostoyevsky and Tchaikovsky stay part of European tradition, whether or not we prefer it or not. It is going to proceed to be our greatest neighbour. It is going to keep the second largest nuclear energy on the planet.”

Austria, which has modelled itself as a bridge between east and west, turning its capital of Vienna right into a magnet for Russian cash, can be a part of a wider Western alliance that has sanctioned Russia after its invasion of Ukraine.

Austria nonetheless imports Russian gasoline though it’s looking for to cut back it over the approaching years.

Some Austrian officers, nevertheless, harbour hopes for a fast conclusion to the battle and a return to extra regular relations with Russia, folks accustomed to the matter mentioned.

Schallenberg made his feedback after the U.S. sanctions authority launched an inquiry earlier this yr into Raiffeisen over its enterprise associated to Russia, growing scrutiny of the Austrian lender.

Raiffeisen is deeply embedded in Russia and is likely one of the solely two international banks on the Russian central financial institution’s listing of 13 systemic establishments, underscoring its significance to Russia’s financial system, which is grappling with sweeping Western sanctions.

A Russian scheme to grant mortgage cost holidays to troops preventing in Ukraine, which Raiffeisen participated in, additionally triggered sharp criticism by buyers.

Schallenberg mentioned it was for Austria to implement sanctions and pointed the finger at different Western banks doing enterprise in Russia. “Austrian corporations have to stay to Austrian guidelines, a part of that are the European Union sanctions.”

“Let’s get actual,” he mentioned. “91% of Western corporations are nonetheless in Russia and doing what is wise: ready, containment, ring fencing.”

“There are sufficient American banks, one with the identify Financial institution of America (NYSE:), current in Russia,” mentioned Schallenberg. “The listing is a ‘who’s who’ of the Western banking world.”

A spokesperson for Financial institution of America mentioned: “Our actions are centered on compliance with all sanctions.”

Schallenberg mentioned he favoured enforcement of current European sanctions over introducing additional measures.

“It’s a very blunt weapon,” he mentioned. “We have had large sanctions packages. Give them time to work.”