Austria's Kurz Condemns Russian Espionage as Spy Suspect Exposed

(Bloomberg) -- Austrian Chancellor Sebastian Kurz condemned Russian espionage after authorities started investigations into a 70-year-old retired colonel suspected of having spied for Moscow for decades.

The colonel, who hasn’t been named, was questioned after an allied intelligence service passed on information leading to the suspicions several weeks ago, Defense Minister Mario Kunasek told journalists in Vienna. Austrian media reported that the colonel had received around 300,000 euros ($340,000) since the early 1990s. Prosecutors declined to say whether he’s been detained.

“If the suspicion is confirmed, such cases, whether in the Netherlands or in Austria, don’t improve the relationship between Russia and the European Union,” Kurz said. “Russian espionage in Europe is unacceptable and to be condemned.”

The incident is a major setback in the relationship between Russia and a country seen as one of its closest allies in the European Union. Austria has deep economic ties to Russia, with oil firm OMV AG just hiking gas purchases earlier this week, and numerous cross-border banking ties. Kunasek’s Freedom Party has a cooperation agreement with the pro-Kremlin United Russia party.

Austrian Foreign Minister Karin Kneissl, who hosted Russian President Vladimir Putin in August at her highly publicized wedding ceremony in Austria, called in the Russian charge d’affaires and canceled a trip to Moscow planned for December.

Russia summoned the Austrian ambassador to protest. Foreign Minister Sergei Lavrov said the Austrian move “was an unpleasant surprise.”

It’s the latest spy scandal to erupt between an EU member state and Russia. The Netherlands disclosed last month that it had expelled four alleged Russian agents in April who were caught with specialist hacking equipment near the headquarters of the Organization for the Prohibition of Chemical Weapons in The Hague.

The United Nations body was examining evidence of a nerve-agent attack in the U.K. in March that British officials blamed on Russian military intelligence. The U.K. and its western allies expelled more than 150 Russian diplomats in response, prompting tit-for-tat retaliation from Moscow.

--With assistance from Gregory L. White.

To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net

To contact the editors responsible for this story: Vidya Root at vroot@bloomberg.net, Tony Halpin, Paul Abelsky

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