Never pass up an opportunity to use foreign policy as a prop in domestic theatre. This is the mantra apparently taken to heart by the Austrian government, which is vetoing the accession of Romania and Bulgaria to the Schengen area, while approving that of Croatia.

Troubles at home

The situation was triggered by the crisis in which Chancellor Karl Nehammer’s government was mired. In 2019, the centre-right People’s Party (ÖVP) – then led by Sebastian Kurz – won a decisive victory in the snap election called in the wake of the Ibiza scandal. Rather than re-enter into coalition with its disgraced partner, the far-right Freedom Party (FPÖ), the ÖVP opted instead to partner with the Greens.

It transpired that the 2019 election was a highwater mark for the ÖVP, senior functionaries of which were implicated in the various corruption investigations that grew out of the Ibiza scandal. Among them was Kurz himself, who had no choice but to resign as chancellor in October 2021 before leaving politics altogether two months later.

Karl Nehammer, who had previously served as interior minister, consequently became chancellor and ÖVP leader. Since then, the fortunes of the ÖVP have only worsened. Nehammer is a more conciliatory figure than Kurz, but he is less a leader of his fractious party than a chairman juggling the interests of the various regional governors. Meanwhile, the corruption scandals have only grown, reinforcing the perception that the ÖVP is structurally rotted in a way that Nehammer is either unwilling or unable to address.

Taken together with the disastrous mismanagement of the coronavirus (COVID-19) pandemic, energy shortages and high inflation, the ÖVP is haemorrhaging credibility. The polls suggest that, in the event of an election, the vote share of the party will fall from 37.5% to as low as 20%.

Meanwhile, the issue of illegal migration has re-entered the public eye, with over 100,000 migrants filing asylum claims in Austria so far in 2022 – and 75,000 of which remained in the country. This is higher even than at the height of the migrant crisis in 2015. Sensing that the FPÖ would exploit the exposed right-flank of the ÖVP, Nehammer mounted the one-trick pony that Kurz had ridden to such great effect in 2017.

The timing is not coincidental, as state elections will be held in Lower Austria at the end of January. Lower Austria is the foremost stronghold of the ÖVP and its regional party branch is its most powerful faction. The party is already expecting to lose its last absolute majority in the state legislatures; but if Nehammer, whose beleaguered authority is propped up by the Lower Austrians, contributes to a worse result than expected, he will pay a dear price.

Double standards

When the Czech presidency of the Council of the EU unexpectedly put Schengen membership for Croatia, Romania and Bulgaria on the agenda, the Austrian government found itself between a rock and a hard place from a domestic perspective.

The ÖVP decided that it would come out swinging. Nehammer and his successor as interior minister, Gerald Karner, announced that Austria would veto the proposal for all three member states, arguing that the number of asylum applications indicated that their border controls were not functioning properly. The way in which the announcement was made was particularly provocative because it was done via the media – a favoured practice of Kurz – rather than being raised at the EU or bilateral level.

But Nehammer soon changed stance, saying that Austria would support the Schengen accession of Croatia as the government was satisfied that its external border controls were working properly. It was probably no coincidence that just days before, Nehammer had travelled with Bavarian premier Markus Söder to the LNG terminal on the island of Krk, where they met with Croatian Prime Minister Andrej Plenkovic. Nehammer and Söder received assurances from Plenkovic that the Adria pipeline would be expanded to serve the Austrian and Bavarian markets respectively, thereby reducing their dependence on Russian gas.

Furthermore, according to a source who spoke on the condition of anonymity, Croatian stakeholders threatened to block upcoming Austrian investments into major infrastructure in the country, prompting the Austrian Chamber of Commerce (WKO) to lobby the government to change course. It also did not hurt that the ruling Croatian Democratic Union (HDZ) has extensive connections with the ÖVP, with which it shares membership of the European People’s Party (EPP).

The Austrian government conceded that Croatia was being used by migrants to illegally enter the Schengen area, having passed through Serbia and Bosnia-Herzegovina. Indeed, nationals from various third countries that do not enjoy visa-free access to the EU – such as India and Tunisia – may fly into Serbia without the need for a visa. However, Serbian President Aleksandar Vucic agreed to scrap the visa-free regime for many of these countries, including India, in the near future. Thus Nehammer found himself able to backtrack on his veto threat.

Thereafter, the ÖVP dug in on Romania and Bulgaria. The Interior Ministry (BMI) argued that it was not satisfied that their external border controls were adequate, despite assessments by Frontex that they fulfilled the technical criteria. The BMI cited its own study that found that of the nationals that had illegally entered Austria in 2022, 40 percent had come through Serbia, another 40 percent through Hungary via Romania and Bulgaria, with 20 percent coming via other routes. This contradicted Frontex data, but the BMI claimed that its figures are more reliable given that they are based on the mapping of mobile data as well as interviews with asylum seekers. At the same time, the study is not publicly available.

The WKO, anxious about Austrian business interests in Romania and Bulgaria, lobbied hard against the veto but without success. The Romanian MEP Eugen Tomac claimed that attempts to lobby Nehammer through the EPP were similarly fruitless: he rejected “every rational argument” and “threw out every proposal the European Commission made, denied every report and every statistic.” Hopes that the ÖVP was simply posturing and would mimic the Dutch in accepting some symbolic assurances on border controls and corruption proved to be in vain.

Theoretically the opposition of the ÖVP is not categorical. The chancellery stated that it would support the accession of Romania and Bulgaria to Schengen once it was satisfied with their external border controls, suggesting that it is only a matter of time before the proposal can be tabled again. Yet Austrian sources in Romania and Bulgaria speaking on the condition of anonymity were very pessimistic that it would be so easy – and that the intransigence of the government would do lasting damage to Austrian interests in those countries.

The anger is already palpable, with the Romanian interior minister expressing incredulity given that Karner had promised him support for Schengen membership back in February. Meanwhile, the president of the Romanian association for clean energy and countering climate change is calling for Austria to pay €200mn per month in compensation for the cost of the country remaining outside of Schengen.

Austrian regional influence in decline?

The entire affair could be laughed off as a comedy of errors if the government were not holding 26mn EU citizens hostage, needlessly squandering the soft power that Austria has accumulated in Central-Eastern and Southeastern Europe (CESEE).

Indeed, before – but particularly since – 1989, Austria has been one of the states that was most supportive of the integration of the region into the EU. Austria was by no means altruistic in its motives; there were massive advantages to this strategy. Austrian investors found lucrative new markets in which they had a first movers’ advantage, while its economy was able to source cheap labour. Vienna was able to revive and reinvent its status as the de facto capital of the region.

Nonetheless, it was a stalwart ally of states in the region even as the political establishment often overestimated the extent of its geopolitical influence. Yet the ÖVP – with the tolerance of the Greens as well as the flip-flopping opposition Social Democrats (SPÖ) – is torpedoing this reputation in conducting itself in a way that is so nakedly political.

Furthermore, in accommodating some member states while throwing others under the bus, it is showing itself up as cynical and untrustworthy. Nehammer was prepared to back down on his opposition to Croatian membership once Zagreb responded with the carrot and stick approach. The ÖVP continues to court Hungarian Prime Minister Viktor Orban, holding three major meetings with him in 2022 alone, even though the country is the weakest link in the migration chain. Not only has the Orban government made it virtually impossible for asylum seekers to file claims, but it also waves them through to Austria.

This has not gone unnoticed in Bucharest or Sofia. A palpably deflated Austrian delegate with whom I spoke told me off the record that the decision is entirely “political” and that this would make life needlessly difficult for Austrian businesses, especially in Romania, which is one of the largest destinations in the EU for Austrian foreign investment. The government has not only thrown two allies under the bus, but its own economic interests as well. This is also ominous for the Western Balkans, where Vienna continues to command substantial influence even as it has declined elsewhere.

This muddled strategy illustrates the extent to which the ÖVP is experiencing brain death. It accelerated under Sebastian Kurz but, along with the SPÖ, began about two decades ago. Its big beasts have variously retired, died or been sidelined, leaving mostly careerist party apparatchiks. Once upon a time the ÖVP was the most pro-European party in Austria. It called an ill-fated snap election in 2008 when the SPÖ, for similarly populist reasons, announced via the tabloid press that it would subject any EU treaty changes to referenda. The days of such thinking are long gone.

Austrian opposition to the Schengen membership of Romania and Bulgaria is a sobering demonstration of just how parochial its political culture has become – and that this parochialism threatens to be periodically belched out of the domestic vacuum.

Marcus How is the head of analysis at VE Insight, a business intelligence and political risk advisory based in Vienna.