THE VIEW FROM MITTELEUROPA: Ukraine and the ‘Austrian solution’

As negotiations between Russia and Ukraine continue on a potential peace settlement, neutrality has become one of the key items on the table.

Previously, some Western politicians mooted ‘Finlandisation’ for Ukraine, despite an insistence by many Finnish observers that this had been an outcome informed by very particular circumstances – and that it was in any case suboptimal.

Now, Moscow is mooting the model of neutrality adopted by Austria in 1955 as an option for Ukraine. Kyiv remains sceptical and with good reason, as this proposal is likely to be a smokescreen. This quickly becomes apparent when the context and implications of the ‘Austrian model’ are scrutinised.

 

A contingent process

There are other neutral states in Europe, but Austria is unique because its neutrality is enshrined in the constitution. When this was agreed, it was the least bad option for Austria because it codified its escape from partition or even outright vassalisation by the USSR.

Yet as much as “permanent neutrality” may be so anchored in the Austrian psyche as to seem eternal, it was not a given for Austria after 1945. Although the Allies had already agreed in 1943 that its pre-1938 borders should be restored, the post-war sovereign status of Austria took a decade to finalise. And over that period, both the country – and Vienna – were partitioned on a four-way basis between the USSR, USA, UK and France.

The Soviets occupied Eastern Austria – namely, Lower Austria, Burgenland and parts of Upper Austria and Vienna – thereby presiding over up to a third of the population and a large share of its economy, including its oil reserves. Given that Austria was the third largest producer of refined oil in Europe, this was a considerable inheritance.

Yet the relative strength of the Soviet position in Austria gradually ebbed away after 1945. There were a few turning points in this respect. The first transpired within months. In spring 1945, the Soviets invaded Austria, capitalising on their first movers’ advantage to occupy a vast and strategic swathe of the country. The Western powers were not far behind.

Before the Soviets had even defeated the Nazis, the elderly Social Democrat, Karl Renner, reached out. Renner was a seasoned political survivor, a shrewdly opportunistic lawyer who had served as the first chancellor when the First Republic was formed in 1919 and had voted “yes” in the plebiscite on Austria’s annexation by Germany in 1938. Renner proposed to the Soviets that he lead a cross-party provisional government, which would include his Social Democrats (SPÖ), their old foe the People’s Party (ÖVP) and the hitherto marginal Communist Party (KPÖ).

The Soviets agreed, to the chagrin of their Western allies, who had not been consulted. The KPÖ, for its part, secured one-third of cabinet portfolios, including those of interior and education, illustrating the extent of Soviet influence at this time. In the months following the war, Renner leveraged his cordial relations with the Soviet occupiers to gently insist on the need for parliamentary elections to legitimise the provisional consensus.

Already at this point, Josef Stalin had accepted that Austria would not be fully subsumed into the Soviet space; but he envisaged that a Popular Front government formally led by the SPÖ but controlled by the KPÖ could move towards socialism and turn the country into a satellite of the USSR.

Elections would provide legitimisation for such a policy path. Prima facie the odds were stacked in favour of the SPÖ and KPÖ, as some 800,000 Nazi Party members were barred from voting, while tens of thousands of Austrian soldiers had yet to return home from post-conflict zones or captivity.

This calculation backfired spectacularly, as the KPÖ won only 5.4% of the vote in the November election, while the ÖVP and SPÖ took shares of 49.8% and 44.6%, respectively. A key reason for this was that women made up a majority of the electorate – and accordingly took the opportunity to punish the Soviets by way of the KPÖ for the mass rape committed by the occupying forces in Vienna and Eastern Austria.

This was a severe blow to Soviet credibility in Austria and after that they continued to lose ground. After 1945, the Austrian cabinet had had to rule by decree because legislative initiatives were only possible with the unanimous consent of the occupying powers. In effect, the Soviets were able to block every major initiative, disrupting post-war reconstruction as a result.

Consequently, in 1947, the Americans proposed that the principle of unanimity be upheld, but that it be applied within 30 days of legislation being passed by the National Assembly. However, the devil was in the detail – and the Soviets overlooked the fact that the vetoes themselves were to be unanimous, therefore requiring the approval of its Western partners.

Six years passed, during which time the Soviets claimed large quantities of Austrian oil as reparations, which they administered through a company that was to later become OMV. In 1953, Stalin died, to be replaced by Nikita Khrushchev. According to Soviet archives made available after 1991, Khrushchev recognised that the Austrian question needed to be settled, as the Soviet costs were outweighed by the benefits.

There were some benefits, as a presence in Austria provided the Soviets with proximity to Italy and Yugoslavia. But the partition acted as a safeguard from this really adding up to much of a strategic advantage. The Soviets only derived economic benefits that it determined could be guaranteed on a long-term basis by other means.

 

A workable if costly outcome

Accordingly, neutrality became an idea that quickly regained momentum. The ÖVP leadership, including Leopold Figl, Julius Raab and Karl Gruber, were key proponents. The SPÖ was more hesitant, but rising stars such as future chancellor Bruno Kreisky successfully took up the argument, persuading President Theodor Körner, whom he served as chief aide. Kreisky, for his part, was persuaded of the merits of neutrality during his wartime experiences as an exile in Sweden.

In 1955, Austria ratified its State Treaty with the blessing of the USSR. Neutrality was modelled on the Swiss variant. As part of the agreement that was reached, Austria was barred from joining any military alliances, hosting any foreign military bases and acquiring any “special weapons” such as heavy artillery and missiles. Although aligned with the West, Austria became a buffer zone and Vienna a hotbed of espionage.

The Soviets also secured very considerable economic benefits, namely, the supply of 60 per cent of Austrian oil on a 30-year basis, underwritten by credit guarantees of $150mn (approximately $1.6 trillion today). This arrangement was amended in 1968, when Austria became the first Western European state to agree a long-term contract for the import of Russian gas.

The costs were high, but with large-scale Western support – and a robust if begrudged cohabitation between the ÖVP and SPÖ – Austria was able to embark on a period of unprecedented prosperity. Its geopolitical profile also changed: during his 13-year chancellorship, Bruno Kreisky massively built upon Austria’s neutrality as the basis for a foreign policy of “bridging,” mediating where it could and lending a particular ear to non-aligned powers.

 

An increasingly flimsy comfort blanket

Since 1989, Austrian neutrality has become passé, if not moot. Even after the Russian invasion of Ukraine, it still commands overwhelming public support. For example, according to a poll conducted in March 2022, 81 percent of respondents stated that they believed that Austria must retain its neutrality, with 63 percent holding this opinion strongly. The same poll found that 61 percent were in favour of Austrian participation in the imposition of economic sanctions on Russia, while 30 percent were opposed.

Nevertheless, given its accession to the EU in 1995, Austrian reticence begs the question of what it would do if an EU neighbour was invaded. The mutual defence clause (Article 42.7 of the Treaty of European Union) states: “If a member state is the victim of armed aggression on its territory, the other member states shall have towards it an obligation of aid and assistance by all the means in their power, in accordance with Article 51 of the United Nations Charter.”

This clause may not oblige Austria to give up military neutrality per se, but the idea that it provides war-torn neighbours with humanitarian aid similarly begs the question of what solidarity Austria would itself expect in the event of an invasion by an external power. Chancellor Karl Nehammer recently confirmed that Austria would indeed rely on military assistance from Nato member states on account of Article 42.7 – and added that through being part of the European security network, Austrian troops could be deployed to Western battlegroups.

 

Copy and paste?

For all its quirks, the question remains whether the ‘Austrian model’ is workable for Ukraine. The answer to that question will hinge on numerous details that have yet to be decided, assuming they are at all; for example, the extent to which Ukraine can maintain a military that may additionally rely on a certain level of external support.

However, the answer will almost definitely be negative, not least because there are several key differences between the respective geopolitical positions of Austria in 1955 and Ukraine in 2022.

The most obvious difference is that while Austria shared borders with the Warsaw Pact states – two of which, Hungary and Czechoslovakia, were subjected to brutal Soviet interventions that shocked Austria – it did not border the USSR itself. In this sense, Austria was not the territorial threat that the Kremlin perceives Ukraine to be – or even Finland. For example, if Austria did hypothetically acquire long-range missile capabilities, they would not reach Russian territory.

Even if an ‘Austrian model’ could be agreed, there would be significant costs to Ukraine. The restrictions on the development of military capabilities, even of a limited nature, would have an impact on the Ukrainian defence industry. It is unclear whether such a compromise, among others, would be politically acceptable to the military and security establishment.

There is some hope that under the Austrian model Ukraine could integrate with the EU. While it is true that Austria converged with and ultimately joined the EU, it is noteworthy that the latter only happened after the dissolution of the USSR. To a large extent, this reflected Austria’s own commitment to neutrality rather than Soviet obstructionism per se, but nonetheless it is no coincidence that it occurred amid wider geopolitical changes.

But most importantly, there is the question of trust. Austria, despite the trauma of the Soviet invasion and occupation, developed sufficient trust in the USSR quite rapidly. Fear of Moscow remained, but positive working relations, including backscratching and double-dealing, developed, reinforced by a structural dependency on Russian gas. This did not change over the decades, with Austria ultimately punching above its weight as a foreign investor in Russia, fielding multinationals such as OMV and Raiffeisen Bank.

There is also a cultural affinity. Before the invasion (or certainly the pandemic), one could go to any number of panel discussions and hear audience members – many of them retired members of the Austrian foreign policy ‘blob’ – bemoan that relations were so close with the USA but not with Russia.

Despite Ukraine’s own cultural affinities with Russia, it is currently difficult to imagine any such trust developing anytime soon, possibly for a generation or more. On the other hand, it is easy to imagine Moscow exploiting an ‘Austrian solution’ for Ukraine as soon as it possibly could, especially if there were no credible security backstop. Indeed, although Moscow is currently accepting Kyiv’s demand that it maintains a military, demilitarisation is implicit to the Austrian model.

It is difficult to escape the impression that the tabling of the Austrian model is a red herring. Its particulars reflect the unique confluence of events in Austria in the post-war era. If transposed to Ukraine, it provides more questions than answers, muddying the waters of negotiations that are already fraught with suspicion.

Marcus How is head of research & analysis at ViennEast Consulting in Vienna. 

This article first appeared in IntelliNews, March 17th 2022

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