Russian President Vladimir Putin on Monday recognized the Luhansk and Donetsk regions in eastern Ukraine as independent “people’s republics” and sent his troops towards those regions. This means that Austria and the EU have a trouble spot right on their doorstep. With more than 200 Austrian branches and investments of around 1.7 billion US dollars, Austria is the sixth largest foreign investor in Ukraine. Around 20 companies operate local production facilities in different sectors. The trade volume between Austria and Ukraine amounted to around €1.5 billion from January to November 2021, with Austrian exports increasing by 19%.
The sanctions announced for the time being are likely to hit the Austrian economy selectively. In principle, however, a significant deterioration in the investment climate in Russia and in eastern Ukraine is to be expected. “It is a political crisis that needs a diplomatic solution. The economy will not solve the problem, but economic cooperation can in any case also be an instrument for securing peace. The economy could take on the role of a bridge builder,” says Mag. Thomas Albrecht, Head of the WKS Department of Trade Policy and Foreign Trade.
Ukraine is an important sales market
Both Russia and the Ukraine are important sales and procurement markets for the Salzburg economy. The latest export statistics from Statistics Austria show for Salzburg that the export of goods to Ukraine increased by 4.5% in 2019 compared to the pre-crisis period. The most popular export goods are construction machinery, wood products, hygiene items, food and beverages, skis, medical equipment and pharmaceutical goods, furniture, toys and textiles.
The Chamber of Commerce has offices in Kiev and Moscow with the network of ADVANTAGES AUSTRIA and is the first point of contact for economic questions. Affected companies can also contact the WKS department for trade policy and foreign trade.
