Bilateral economic relations with Eastern Europe and Central Asia
The region Eastern Europe and Central Asia comprises the Russian Federation, the six Eastern Partnership states Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine, and the five Central Asian states Kazakhstan, the Kyrgyz Republic, Uzbekistan, Turkmenistan and Tajikistan. EU Association and Free Trade Agreements are in force with three of these states - Ukraine, Moldova and Georgia. Ukraine and Moldova have been candidates for EU accession since June, 2022, and the opening of accession negotiations with Ukraine and Moldova was decided by the European Council in December, 2023, when Georgia was given an accession perspective as well. Five states belong to the Eurasian Economic Union EEU - the Russian Federation, Belarus, Kazakhstan, Armenia and the Kyrgyz Republic.
As of 2014, the EU imposed restrictive measures vis-a-vis the Russian Federation in response to the annexation of the Ukrainian peninsula Crimea and support for pro-Russian rebels in Eastern Ukraine. These measures comprise economic sanctions.
Since 25 February, 2022, several packages of restrictive measures have been imposed in reaction to the war of aggression of Russia against Ukraine. They comprise, inter alia, individual restrictive measures (asset freezes and travel restrictions) against an additional considerable number of people and entities as well as extensive economic and finance sanctions.
Sanctions have been imposed against Belarus in the wake of 2020 presidential elections and have since been expanded because of Belarus’ role in Russia’s invasion of Ukraine.
Current information by the European Union is available at:
EU restrictive measures in response to the crisis in Ukraine
Austria's economic relations with the region
In economic terms, most important countries of the region for Austria are Ukraine and Kazakhstan, and, to a decreasing extent, the Russian Federation.
Ukraine has traditionally been Austria's second most important trading partner in the region, with exports reaching 507.1 million Euros (2022) and imports amounting to 1.18 billion Euros (2022) with a decrease in exports by -18.4 percent and a growth in imports by +12.1 percent. In the year 2023, Austria’s exports rose by +21.5 percent to 616 million Euros, while imports decreased by 21 percent to 929 million Euros.
Aggregated Austrian direct investment amounted to 615 million Euros (End 2022, according to Austrian National Bank - OeNB data). Before Russia’s war, Austria ranked sixth among foreign investors in Ukraine. Most of the some 200 Austrian companies engaged in Ukraine have maintained their activities in the country, notwithstanding challenging conditions. Recovery and reconstruction hold potential for Austrian companies.
The EU and its member states have made available over 88 billion Euros in financial, humanitarian, immediate and budget aid as well as military support. The Commission has provided 785 million Euros for humanitarian relief programmes in Ukraine. The EU and its Member States have mobilised around 28 billion Euros in military support for Ukraine, including 6.1 billion Euros under the European Peace Facility. Current information on reconstruction and on support by the EU is available at:
Recovery and reconstruction of Ukraine (europa.eu)
EU support for Ukraine | European Union (europa.eu)
Around 200 billion Euros in assets of the Russian Central Bank are immobilised in the EU. More than 28 billion Euros of private assets of listed persons and entities have been frozen so far.
Up to its war of aggression against Ukraine, the Russian Federation constituted an important marketplace for Austria's economy, with exports amounting to nearly 2 billion Euros (2021). According to data for 2022 by Statistik Austria, exports shrank by -8 percent to 1.8 billion Euros, while imports grew by +76.7 percent to 8.2 billion Euros - mainly because of soaring energy prices. Natural gas accounted for nearly 90 percent of imports from the Russian Federation. In the year 2023, exports decreased by -30 percent to 1.3 billion Euros and imports by -51 percent to 4 billion Euros - with a gas share of 92 percent of imports (value of gas imports decreased by -50 percent).
Among Austria’s export destinations, Russia ranked number 10 in 2008, 2009, 2011, 2012 and 2013, and number 11 in 2006, 2007, 2010 and 2014. In 2023 (January to November), it ranked only 26th.
However, among Austria’s import sources, Russia ranked 7th in 2012, 10th in 2021, 6th in 2022 and 11th in 2023 (January to November).
Before the war, some 650 Austrian enterprises were present in Russia. About 20 to 30 percent have left since. Russian legislation makes it increasingly difficult to leave: transfer of profit or capital to Austria after a sale - much below value - of company shares is impossible or restricted, sale requires official approval.
Aggregated Austrian investment in the Russian Federation amounted to nearly 6 billion Euros, 2022 having been the third consecutive year with reduced investment; in 2022: -561 million Euros. (End 2023, according to Austrian National Bank - OeNB data).
In Central Asia, Kazakhstan is Austria's most important trading partner. The country is Austria’s top supplier of crude oil. Statistik Austria data show a rise in imports by +15.5 percent to 1.6 billion Euros and an export growth by +36.6 percent to 231.9 million Euros in 2022. In the year 2023, imports grew by +10 percent to 1.7 billion Euros, while exports grew by +28 percent to 297 million Euros. Oil accounts for 98 percent of imports.
Aggregated Austrian direct investment in Kazakhstan in 2022 amounted to 104 million Euros (End 2023, according to Austrian National Bank - OeNB data).
Contact
Eastern Europe, Central Asia, Internationalisation Initiative: wirtschaftbeziehungen-osteuropa-zentralasien@bmaw.gv.at