Austrian businesses would back tougher economic sanctions against Russia should Europe go down that path, even though such measures will likely be counterproductive, the head of the country’s Chamber of Commerce said.

Christoph Leitl, one of Austria’s most vocal opponents of levelling tough sanctions against Moscow over its role in Ukraine’s crisis, told Reuters he could not estimate the economic impact of stepped-up economic pressure on Russia.

“As (sanctions) are now, we expect exports to fall around 20 percent this year versus last year and in tourism the collapse in Russian guests is already very strikingly tangible,” he said in a telephone interview.

Neutral Austria has walked a fine line between showing solidarity with European Union partners and calling for dialogue with Russia, whose President Vladimir Putin got a warm welcome when he visited Vienna last month.

“I am still against sanctions, but if the politicians decide otherwise then of course one is bound to this,” Leitl said, noting Austria’s business would go along with whatever the United Nations, the EU or national law mandates.

He was speaking after Germany’s main business lobby group took a similar line and as EU diplomats met to thrash out the bloc’s first broad economic sanctions on Russia.

Leitl noted that Austrian companies - which have invested more than 8.6 billion euros ($11.5 billion) in Russia - have to judge whether to keep investing given the political uncertainty, but dismissed the idea that the crisis could torpedo plans to bring the South Stream Russian gas pipeline to Austria.

Long-Term Project

The chief executives of Russia’s Gazprom and Austria’s OMV last month sealed a deal to build a branch of South Stream to Austria, a defender of the project despite opposition from the European Commission.

“South Stream is a long-term project. In my view this crisis will occupy us perhaps for a few months but South Stream is a project over many years,” Leitl said.

He said he wanted to neither dramatise nor play down the potential impact of sanctions on Russia, which imports mostly machinery, pharmaceuticals and iron and steel products from Austria. Energy accounts for 85 percent of trade the other way.

More than 513,000 Russian tourists visited Austria last year, up nearly 8 percent from 2012. Russia is Austria’s third-biggest non-EU trading partner, after the United States and Switzerland, but exports to Russia fell nearly 12 percent to just over 1 billion euros in the first four months of this year.

Austrian companies with large Russia exposure include lender Raiffeisen Bank International (RBI) and property group Immofinanz.

RBI’s CEO was quoted saying in a newspaper interview Russia was an important market but the bank would wait to see how the situation develops. Immofinanz has said in the past the impact of the Ukraine crisis was uncertain. (Reuters)