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Austrian commission to examine quitting Russian gas deal

Austria's Climate Minister announced Tuesday that a commission has been set up to examine the possibility of exiting a gas supply contract between energy group OMV and Gazprom in a bid to cut its dependence on Russia.

Published: 10 July 2024 09:11 CEST

Austrian commission to examine quitting Russian gas deal

Austria's Green Minister of Climate and Environment Leonore Gewessler answers journalists' questions during an Environment ministers council meeting at the EU headquarters in Brussels on December 20, 2021. (Photo by JOHN THYS / AFP)

Europe has sought to reduce its reliance on Russian oil and gas since Moscow invaded Ukraine in February 2022.

According to the latest government figures, Austria imported 90 percent of its gas from Russia in May.

“Dependence on Russian gas is and remains a threat to the economy and prosperity,” minister Leonore Gewessler of the Greens told journalists on Tuesday, adding that extending the country’s long-term supply contract with Gazprom in 2018 “was a mistake”.

Austria- currently governed by a coalition of the conservatives and the Greens- has struggled to divest itself of Russian gas.

With national elections coming up in late September, the coalition partners have repeatedly clashed in recent months.

READ ALSO: Austria summons Russia envoy after journalist told to leave

Gewessler said the commission of experts will examine the “long-term supply contracts” between OMV and Gazprom, which run until 2040 and have not been made public, while “analysing the possibilities for action as well as the risks”.

The contract will be scrutinised to see whether it is “possible to get out of these obligations”, said retired judge and former lawmaker Irmgard Griss, who will head the commission.

On the other hand, the “political… conditions of the 2018 contract extension” will be probed to “avoid similar mistakes in the future”, Gewessler added.

The initial findings are expected to be presented “by autumn”, the climate ministry said in a statement.

OMV was the first Western company to sign a supply contract with the former Soviet Union in 1968.

READ ALSO: Austria’s Raiffeisen Bank scraps controversial Russia deal

Austrian politicians have long sought close ties with Russia until Moscow invaded its neighbour.

Austrian companies continue to do business in Russia.

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Right-wing 'Schnitzel bonus' rewards 'traditional' Austrian eateries

They have helped the struggling business to survive by earning it a subsidy from right-wing state authorities in a controversial programme that benefits only traditional Austrian cuisine.

The subsidy for restaurants that serve regional and “traditional food” has been derided in the media and by opposition parties as a “Schnitzel bonus”.

It excludes restaurants serving less overtly authentic Austrian fare, such as kebabs or pizza, for example.

As a typical Austrian staple, schnitzel — a boneless piece of meat that has been pounded thin to make it more tender and then coated and fried — qualifies for the cash.

“They gave us €10,000,” or $ 11,000, said Michael Stich, the 39-year-old owner of the family business in Pfoesing, population 300, in the state of Lower Austria.

The village’s last surviving restaurant is an institution, “like the church, town hall or fire station”, he told AFP.

“If this place didn’t exist, it would be difficult for the entire community.”

Austria’s conservative Chancellor Karl Nehammer has said he wants to defend the country’s “Leitkultur,” or “dominant culture”, as he seeks to bolster support ahead of September elections.

Campaigning on an anti-immigration platform, he has evoked the concept, born in Germany in the 1990s, as polls indicate the far right will come out on top for the first time in the Alpine nation.

‘Discriminatory’

Lower Austria — governed by the conservatives and the far right — introduced the “Schnitzel bonus” this year for owners who open a restaurant in a town without one or take over an existing one.

“The subsidy was very important for us,” said Michael Stich’s father, Hermann Stich, 62.

He continues to help out after his son became the third generation to run the business at the beginning of the year.

As he taps beer served over a large wooden counter, he notes the impact of energy and labour costs on the restaurant, which sports hunting antlers and a crucifix on the walls.

Since 2000, one in three restaurants in the state of Lower Austria, around Vienna, have closed, partly due to a rural exodus, with the coronavirus pandemic and resulting lockdown also taking their toll.

So far, 20 restaurants have received the bonus.

But critics have denounced the measure as discriminatory — an accusation rejected by the conservative People’s Party (OeVP) state parliament member Kurt Hackl.

“Village restaurants in Lower Austria are dying out, and we want to support them,” he said, calling them “special”.

Kitchen chef Eva Leimer poses with a plate of prepared Schnitzel meat at the inn ‘Gasthaus Stich’ in Pfoesing, Weinviertel, Lower Austria, north of Vienna, on July 2, 2024. (Photo by Alex HALADA / AFP)

‘Our values’

At Gasthaus Stich — which also features regional wines and seasonal dishes such as chanterelles with dumplings — clubs from the community regularly hold their meetings there, and guests play cards on wooden tables.

“In small communities, the tavern is the centre of social life. People celebrate, laugh and cry there together,” said Oliver Fritz at the Austrian Institute of Economic Research (WIFO).

However, Fritz considers the €10,000 subsidy as just a “drop in the ocean”.

He also warns of possible “windfall effects” for restaurant owners who do not really require the support.

He also questioned why restaurants that offer pizza or kebabs should be excluded.

“The social function works even if it is an Italian restaurant,” he told AFP.

“If demand evolves and younger generations prefer to eat something else, then it’s better to adjust because countering a trend is extremely difficult,” he said.

Meanwhile, at the national level, Nehammer has tasked his integration minister with defining what “Leitkultur” means for the country of nine million people, which like the rest of the EU has seen an influx of migrants and asylum seekers.

Under his “plan for Austria” launched early this year, Nehammer said that “Anyone who wants to live permanently in Austria must represent our values, accept our culture and adapt to our way of life”.

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