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Austrian government unveils ‘eco’ tax reform

Austria's government unveiled on Sunday what it calls an "eco-social" reform of the tax system, a key promise of the conservative-green coalition.

Austrian Chancellor Sebastian Kurz
Austrian Chancellor Sebastian Kurz introduced a tax on CO2 emissions on Sunday. JOE KLAMAR / AFP

Under the measures set out at a news conference by Chancellor Sebastian Kurz and several of his cabinet colleagues, Austria will follow the example of neighbouring Germany and introduce a tax on carbon dioxide emissions.

This is to come in from mid-2022 at a level of 30 euros ($35) per tonne, rising to 55 euros by 2025.

In order to offset the added cost of the measures, taxpayers will receive a “climate bonus”.

Reflecting the fact that more people in the countryside rely on cars, this “bonus” will be worth 200 euros annually for those in the most rural areas but only 100 euros for those in cities.

Kurz stressed several other measures that would “lower the burden” of taxation on working Austrians, including reductions in income tax and social security contributions as well as higher tax breaks for families with children.

Corporation tax will also fall from 25 to 23 percent by 2025 to encourage post-pandemic investment.

Vice-Chancellor Werner Kogler, head of the junior Green coalition partner, described the reform as “historic” and added it would lead to “less dirt in the air but more money in people’s pockets”.

An environmentally friendly tax reform had been one of the key pledges in the coalition agreement reached in January 2020 between Kurz’s right-wing People’s Party (OeVP) and the Greens.

Environment Minister Leonore Gewessler told reporters the tax reforms were the results of “long nights” of discussions between the two parties in recent days in which the details were thrashed out.

Green pressure groups gave the reforms a cool reception, with WWF Austria calling them a “weak compromise” and saying the measures had to be “much more ambitious in order to effectively reduce emissions”.

A statement from the group said the CO2 price needed to be higher and that an opportunity had been missed to abolish environmentally harmful subsidies.

When asked about the fact the carbon price is lower than many experts had demanded, Kogler said that “setting out on the path is more important than where the price is set initially”.

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Austrian ex-minister exiled in Russia denies she is ‘Kremlin agent’

Austria's highly controversial former foreign minister Karin Kneissl -- who now lives in Russia -- told AFP she feels slandered as Vienna reels from an unfolding Russian spying scandal.

Austrian ex-minister exiled in Russia denies she is 'Kremlin agent'

A pariah in her home country after dancing with Russian President Vladimir Putin at her wedding, Kneissl claims she had no choice but to flee Austria and shelter in Russia.

Now, she denies any involvement in the espionage scandal, which appears to reveal a nest of Russian spies in influential positions in Austria, particularly among the country’s powerful far right.

“I’ve been insulted and really reduced to an agent of the Kremlin,” the 59-year-old former career diplomat told AFP in a video interview from Saint Petersburg.

“But I haven’t set foot in the Kremlin since 2018. They have other things to worry about,” Kneissl insisted.

She made headlines in August 2018 when photos of her dancing with Putin were widely circulated, raising questions about Austria’s neutrality while the country presided over the rotating presidency of the Council of the European Union.

Austrian Foreign Minister Karin Kneissl and Russian President Vladimir Putin dance during her wedding.

Austrian Foreign Minister Karin Kneissl and Russian President Vladimir Putin dance during her wedding in 2018 in Styria, Austria. (Photo by Alexei Druzhinin / Sputnik / AFP)

Kneissl had been nominated as foreign minister a year earlier by Austria’s far-right Freedom Party (FPOe), which had signed a “cooperation pact” with Putin’s United Russia party in 2016.

Kneissl left the government in 2019 and has since distanced herself from the FPOe, of which she was never a member. She told AFP they “tried to get rid” of her because she was “too independent”.

But it is her Russian links — she has lived there since September 2023 — that saw her forced into denying involvement in Austria’s biggest espionage scandal in decades, which recently came to light when a former Austrian intelligence officer was arrested on suspicion of spying for Russia.

READ ALSO: Austria’s spy arrest puts Cold War spotlight back on Vienna

The revelations following the arrest of Egisto Ott in March have refreshed accusations levelled against the FPOe that moles close to the party are still believed to be working as Russian agents.

“I’ve never met Ott, I don’t know anything about it and I’m at the disposal of the courts,” Kneissl told AFP.

‘Very tiresome odyssey’

Kneissl, who speaks eight languages, claims she had to leave Austria in September 2020 because she was unable to find work following her “dance with the tsar.”

Videos that showed Kneissl bending her knees in a deep curtsy in front of Putin at her wedding caused outrage and led to insults and attacks against her, she told AFP.

“There was a real media campaign against me. In Austria, I’ve unfortunately been attacked in the street and called ‘Putin’s whore’,” she said.

A regular contributor to Russia’s state-funded news organisation RT since 2020, Kneissl initially left Austria for France.

But she claims she was pressured into leaving France, where authorities appeared not to appreciate her contributions to the pro-Kremlin outlet that was later banned from broadcasting in the European Union.

READ ALSO: Austria warns Russia’s ‘hybrid warfare’ against Europe to intensify

Unable to open a bank account or find permanent accommodation, Kneissl said she “survived on the street, on a mattress” before moving to Lebanon.

In September 2023, she was tasked with heading a new think tank attached to Saint Petersburg University, which enabled her to “finally settle” in Russia after a “very tiresome odyssey”.

Kneissl had previously served on the board of directors of the Russian oil giant Rosneft before stepping down in May 2022 following Russia’s invasion of Ukraine, which she did not explicitly condemn in an interview with the BBC.

She claims to have received a total of “more than $350,000 net” for the former post.

With poneys in tow

To move to Russia from the Middle East, Kneissl said she contacted the Russian authorities “for the first time” to help fly out her animals, including two ponies, via the Russian air base at Hmeimim in Syria.

At the Gorki think tank in Saint Petersburg, Kneissl spends her days “coming up with ideas” such as how to “ensure Russian exports” without depending on Western shipping giants.

In the wake of Russia’s invasion of Ukraine, she observed how the geopolitical order shifted, with Moscow forging new ties “with Iran, China and Zimbabwe” as relations with the West deteriorated.

READ ALSO: In Austria, Russia far-right sect tries to get foothold in Europe

Kneissl, now separated from the man she married in 2018, said she wants to settle down in a rural area on the outskirts of Moscow and teach across Russia.

In a book published in Russian, she looks back on her past few years overshadowed by controversy.

But despite all her setbacks, she said she has no regrets about dancing with Putin, adding, “Minister or not, I dance with whoever I want.”

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