This year's annual meeting of the Konrad Adenauer Foundation’s (KAS) Alumni Association took place in Vienna from 26 to 29 May. The motto was: "Vienna - Hub in the Heart of Europe." L&M PRISK played a key role in the implementation of the event, not only since KAS alumnus Dr. Hannes Meissner led the Vienna organization group.

The reception and opening ceremony with more than 340 participants took place on the roof top terrace of the Modul University on the Kahlenberg (484m) with a beautiful view on the city of Vienna. The welcoming speeches were held by Matthias Wilkes (Chairman of the KAS Alumni Association), former German Bundestag president Prof. Dr. Norbert Lammert (Chairman of the KAS), Dr. Hannes Meissner (Managing Partner of L&M PRISK) and Karl von Habsburg-Lothringen (President of the Paneurope Movement Austria).

From left to right: Prof. Dr. Norbert Lammert, Matthias Wilkes, Dr. Hannes Meissner, Karl von Habsburg-Lothringen

Major highlights of the day were the award ceremony for the Bernhard Vogel Education Prize, the award speech by Prof. Lammert, a video speech by Friedrich Merz (Leader of the CDU) and a visit to the monastery Klosterneuburg. Day 1 ended with a cosy get-together at the winery Fuhrgassl-Huber.

Day 2 started with various cultural excursions in Vienna and to the surroundings. In the afternoon, one of the two major panel discussions took place at the WKO (Austrian Business Council), titled "Geopolitical Realignment: What Role will Austria Play as a Business Location in the Future?" The discussion - moderated by Dr. Johannes Leitner (L&M PRISK) - dealt with the ongoing geopolitical change, leading to the question of where future markets lie for Austria and Europe. What impact does the power struggle between China and the USA have on our export economy? How does the war in Ukraine affect the flow of goods to and from Europe? What role can Austria play in the future as an economic hub between East and West? These were the questions, Dr. Johannes Leitner discussed with Dr. Thomas Birtel (CEO of STRABAG), Thomas Gindele (General Manager of the DIHK in Austria), Dr. Alice Meissner (Partner at MP Attorneys), and Dr. Erik Kroiher (Head of the Department of International Relations & Business Development at Kapsch AG).

From left to right: Thomas Gindele, Dr. Johannes Leitner, Dr. Thomas Birtel, Dr. Alice Meissner

Day 3 was dedicated to various networking meetings and thematic seminars at the WKO. One of the workshops was led by Dr. Johannes Leitner (L&M PRISK), who spoke about how to identify and manage political risks for enterprises in the post-Soviet space. (Please follow the link to the presentation slides.)

In the afternoon, the 2nd major panel discussion took place with Dr. Götz Schmidt-Bremme (German Ambassador to the United Nations in Vienna), Claudia Crawford (Head of Multilateral Dialog KAS Vienna), and Prof. Dr. Diermeier (President of Vanderbilt University). The panel – moderated by Dr. Hannes Meissner - focused on the crisis of multilateralism that has reached a new dimension with Russia’s war against Ukraine. But even prior to that, states have been withdrawing from treaties, disregarding established rules. At the same time, the adoption of new multilateral agreements is more controversial than ever before. The panel explored the causes of the crisis as well as possible solutions.

From left to right: Prof. Dr. Daniel Diermeier, Dr. Hannes Meissner, Claudia Crawford, Botschafter Dr. Götz Schmidt-Bremme

The day ended with two major highlights, the annual concert of the alumni choir and orchestra and festive evening that took place in the ballroom of the Vienna City Hall. The annual meeting ended with the closing service on Sunday (day 4).

Dr. Hannes Meissner, Dr. Frank Deickert (on the right side) and the Vienna Organization Team

Real Vision Essential · Featuring Hannes Meissner and Dee Smith

How do Russia’s other neighbors view the conflict in Ukraine? Can a close look at these nation’s histories and domestic politics help us forecast their future behavior toward Putin and Moscow? Hannes Meissner, Managing Partner of L&M Political Risk and Strategic Advisory, and Dee Smith, CEO of Strategic Insights Group (L&M PRISK’s US based partner company) scrutinize Germany, factionalized but also critical because of its close energy ties to Russia. And Meissner offers a stark warning about the growing power of European far-right political groups. This is an epic journey through the history, the people, and the ideas central to Europe’s perspective on Russia’s invasion of Ukraine. Recorded on May 9, 2022.

Published on: May 26th, 2022 • Duration: 61 minutes

Just over 30 years ago, the Soviet Union broke up and released 15 republics into independence, including neighboring Ukraine. It is a painful separation full of violence. Dr. Hannes Meissner speaks as an expert in the documentary, now available in the ZDF media library.

L&M PRISK Business Circle # 11

L&M PRISK maintains a series of events where our Senior Experts discuss innovative and exclusive insights on current topics with selected companies confidentially under Chatham House Rules. On May 12, our Senior Expert Elkhan Nuriyev (www.lm-prisk.com/elkhan-nuriyev) shared his insights on war and future scenarios concerning Ukraine and the entire post-Soviet space with a group of 10 business representatives. It became clear that in order to understand current events, future scenarios and their implications for businesses, it is necessary to understand Russia's hegemonic mindset. There is no alternative for Russia to victory in Ukraine. As a result, the Ukrainian war will most likely continue for years. While companies in Ukraine will have to manage serious risks under these conditions for a long time to come, companies in Russia and the post-Soviet space must prepare now for the opportunities and risks of a new European post-war order.

If you would like to participate in our upcoming L&M PRISK Business Circles, please write to veronika.weissenhofer@lm-prisk.com.

Episode 3 of the ZDF doku series "In the shadow of Russia" with Dr. Hannes Meissner

Just over 30 years ago, the Soviet Union broke up and released 15 republics into independence, including neighboring Ukraine. It is a painful separation full of violence. The third part of the documentary series "In Russia's Shadow" is the portrait of Ukraine: a country that wants to stand independently at the side of the West and break free from Russia's shadow. In February 2022, Putin stops this process by force of arms and war. Russian President Putin also justifies his claim to power in Ukraine with the myth of brotherhood - a centuries-old bond that unites the countries. His argumentation: Ukraine lacks its own identity and he wants to free it from the negative influence of the West. The documentary questions these arguments and analyzes the causes of the conflict. It paints a portrait of a country that is striving towards the West and yet is always caught up in Russia's shadow. A country with many economic problems, oligarchs and corruption, but characterized by a strong civil society and national identity. ZDFinfo asks: Who is President Selenskyj, and who are his supporters? How is the war with Russia welding the population together? And is the country torn between a lack of support from the West and Putin's military force? Experts provide answers, supported by personal stories of Ukrainian citizens. (Text: ZDF, https://www.fernsehserien.de/im-schatten-russlands/episodenguide/0/52018#google_vignette)

German TV premiere: Wed 18.05.2022, 21:00-21:45 on ZDFinfo

On May 5ht 2022 LM PRISK’s Dr. Hannes Meissner and Dr. Johannes Leitner discussed in a webinar organized by Dr. Stefan Tetzlaff from Konrad Adenauer Stiftung (KAS) the question "Strategic Reorientation of Businesses in Response to Russia's War on Ukraine?" The essence was that Russia's war of aggression on Ukraine is not only changing the global geopolitical system of the last 20 years, but the globalized economy will also reshape. Fracture lines in international trade through geopolitical bloc formation as a consequence of the war are likely.

Please find the slides here.

This year's annual meeting of the former fellows of the Konrad Adenauer Foundation will take place in Vienna from May 26 to 29. The motto is: "Vienna - Hub in the Heart of Europe." Under the organizational lead of Dr. Hannes Meissner, who is himself a former fellow of the KAS, the Vienna organisation team has prepared an exciting program, including speeches and panels with well-known people from politics, culture and business. L&M PRISK has not only played a central role in the planning, but is also a co-sponsor of the event. For more information, please download the programme.

Lecture by Dr. Hannes Meissner at Amsterdam Centre for European Studies (ACES)

On 12 April, Dr. Hannes Meissner gave a lecture on the state of the Ukrainian economy at the Amsterdam Centre for European Studies (ACES). The presentation covered structural particularities of the Ukrainian economy, indicators and root-causes of the permanent economic crisis, the history of failed reforms as well as recent pre-war developments. It finally gave an outlook on war scenarios and economic perspectives of the country. The presentation slides and the video presentation are now available.

In a podcast on the war in Ukraine, Dr. Hannes Meissner talks to Asta Boruseviciute from the social media platform Litauen to Go. They discuss the causes of the war, the impact on neighbouring countries like Lithuania, the perception of the war in other successor states of the Soviet Union and the future of the post-Soviet space. Please follow this link to the podcast.

Interview with Dr. Johannes Leitner

While they were welcome real estate buyers just a few years ago, Russian oligarchs are now no longer welcome in this country either. As a result of international sanctions, their assets parked in the West are to be frozen or confiscated. But in contrast to other European countries, progress in Austria has been slow.

Please watch the expert interview with the main TV journal ZIB2 of the Austrian public TV channel ORF.

Lecture by Dr Hannes Meissner at Amsterdam Centre for European Studies (ACES)

The lecture draws on research results from field work in Kyiv in October 2021. Dr Meissner’s lecture sheds light on three decades of economic development, post-Socialist structural deficits, and the results of recent reform measures. It also deals with the impact of the war and dares a look into the future. Indeed, the 2014 Euromaidan Revolution led to a critical juncture. After the immediate shock of the annexation of Crimea and the war in Eastern Ukraine, the country returned to growth from 2016. However, the struggle between reform forces and the old elite – who still exercised control over the judiciary - negatively affected the potential for development. The war now changes the constellation completely. (Date 12 April 2022 Time 18:00 -19:00 Location Oudemanhuispoort Room Room D0.08 and online via Zoom)

For more information please follow this link.

Hannes Meissner gave an interview to Pavlína Meľuchová from HN Online SK on the war in Ukraine, Putin’s interests, the root causes of the conflict, and future prospects. The interview is in Slovakian.

by Dr. Johannes Leitner and Veronika Weissenhofer

The Russian leadership threatens international companies with expropriation if they close their Russian subsidiaries and interrupt the continued payment of salaries to employees.

The list of American and European companies that are announcing in the media that they are withdrawing from the Russian market, or at least suspending their activities, is growing longer and longer. The list includes big names such as Nike, Adidas or Puma, as well as car manufacturers Volkswagen, BMW and Stellantis, but also Austrian companies have made announcements about a withdrawal, such as Swarovski, or Rosenbauer. McDonald’s is probably one of the best-known companies to publicly declare its withdrawal from Russia, arguing that the war is not in line with its corporate values.

The fact that these announcements do not always have to mean that the company's involvement in Russia will come to a complete standstill is shown by the example of the American investment bank Goldman Sachs. The bank continues to act as a broker between its Russian clients and Western interested parties. It therefore remains to be seen how serious and final the withdrawals announced in the media actually are. After all, one will also have to think about the chances of resuming business after the war, possibly even after Putin.

At the same time, lists of companies that have not yet withdrawn from Russia are circulating on social media and are being harshly criticized for doing so. This shaming and blaming strategy is repeatedly used against companies to achieve political goals. Most recently, these campaigns were observed in connection with Iran or Belarus. The associated reputational risks for companies can be considerable.

In addition to reputational risks, there are other substantial reasons why companies are withdrawing from Russia.

The increasingly strict economic sanctions, in particular the exclusion of seven Russian banks from SWIFT, complicate or make it impossible for regulated payment transactions to take place between local companies and their international partners. The issue of profit distributions and repatriations of financial surpluses will also be an increased risk as a result of current events because the amounts cannot be transferred out of Russia.

In addition, supply chains will become increasingly difficult to maintain, especially if the warlike actions are expected to continue for weeks.

The war itself and Western sanctions are straining the Russian economic system and will lead to further losses for the Russian middle class. Instead of a weak GDP growth of 2%, economists expect a GDP downturn of 7% for 2022. The depreciation of the Russian currency makes all imported products and services, which are usually priced in USD or EUR, more expensive. Another shock to weakened household incomes. But currency fluctuations also mean high risks for companies.

All in all, not good prospects for companies to stay in the market. On the other hand, there is the risk of expropriation.

If this war has shown one thing so far, it is that Russian threats must be taken seriously and not be seen as mere threats.

On March 9, the government commission approved the second package of measures to support Russia's economy. Included in it is a provision for nationalizing the property of foreign companies when they leave the Russian market.

The foreign owners can avert receivership within 5 days if they resume their business activities, or sell their shares on the condition of continuing operations and maintaining jobs. Otherwise, the court will appoint a provisional administration for three months, after which the company's shares will be auctioned.

The draft currently in force covers companies from 48 "unfriendly states," including all EU countries. The law is to target companies with assets of more than 1 billion rubles (about 7.5 million EURO as of March 14, 2022) and an average of 100 employees.

The Russian Union of Industrialists and Entrepreneurs proposed some amendments to the draft law, which is intended to give Western companies better chances to return to the Russian market. For example, assets should only be auctioned off after three years and foreign owners should be able to hold shares of up to 50%.

It is difficult to assess the prospects of success of a legal fight against possible expropriations in Russia. Even if an expropriation were successfully fought through international arbitration, there would still be the problem of the enforceability of the arbitration award. Russia will show little interest in bowing to international rulings. Only the argument that it does not want to cause lasting damage to the investment location could persuade the Russian administration to relent.

In any case, now is the time to think about the strategic reorientation of companies , both in the post-Soviet region and globally. Above all, political risks should be considered as highly weighted variables in the equation.

In preparation for our joint webinar with the Austrian Business Council (WKO) titled "Current Situation in Ukraine Risk and Crisis Management" on Thursday, 24 February (please follow the link to our slides), L&M PRISK carried out a comprehensive analysis based on HUMINT background conversations with people from our network in the region.

The three major statements are: Firstly, the invasion of Ukraine shows that Putin ranks geostrategic and historical-nationalistic interests over economic interests. “Putin is willing to pay highest costs. He will not take Western sanctions seriously. (…) Anyway, he does not believe that the West is able to agree on powerful sanctions. He regards the EU as weak and discordant. “

Secondly, the invasion will be aimed at forcing a regime change in Ukraine. The goal is to trigger chaos, bringing the country to collapse, forcing president Selenskyj to leave the country. At the same time, Russia will install a new pro-Russian regime. Our sources emphasised that this is Putin’s iron target. “There won’t be any concessions”.

Thirdly, Putin will try to establish a new security order in Eurasia and beyond. In this context, he aims at implementing the “Near Abroad Doctrine” that was formulated after the dissolution of the Soviet Union, stating that the newly independent republics, which emerged after the dissolution of the Soviet Union, belong to Moscow’s sphere of influence and to nobody else. As one of our sources highlighted, “the last chapter of the post-Soviet states has just begun”. In other words, Putin will tighten his grip on other post-Soviet states as well, no matter the cost. Countries with governments that do not resist or willingly accept Russia’s military power – like Kazakhstan recently – will quietly slide into the new reality. In other countries, however, Russia is ready to carry out open and hidden military attacks as well as cyber-attacks. Against this backdrop, battlefields of the future could be Moldova, Georgia and Kyrgyzstan in particular.

What can companies do now? How can they manage associated political risks?

In Ukraine, in the short term, companies now have to develop and implement acute emergency plans to safeguard staff and employees as well as the most important company resources, for example by hiring private security providers. Parallelly, they have to develop an contingency plan to ensure company operations and safeguard control to the highest degree possible.

In the mid- and long-term, companies have to adapt the organisational structure and procedures to a continuous situation of uncertainty. In Ukraine and the other post-Soviet states political risks will increase: Political instability, corruption, deficiencies concerning the rule of rule of law will have to be managed. Under the new rulers in Ukraine, expropriation measures will take place with certainty. Such measures can be directed at the own company and/or important business partners. Companies have to follow these developments carefully by carrying out HUMINT in-depth research on the new rulers and their business aspirations. The reform pressure by the EU on states concerns will break abruptly (Ukraine) or slowly decrease in other cases. At the same time, trade agreements with the West will become less important. In the Eastern Partnership region, this particularly concerns the Deep and Comprehensive Free Trade Agreements (DCFTA) with the EU.

Companies are affected very differently by these political developments. For example, exporting companies have a different risk exposure than companies that have invested locally. However, in any case, companies firstly have to identify specific risk factors affecting their company/their projects. They then have to evaluate the possible effects and prioritise along the dimensions “probability and impact.” They finally have to develop and implement mitigation strategies for the respective risk constellation.

In other words, country/regional risk always require tailor-made company solutions. L&M PRISK is ready to support you. Please feel free to contact us: info@lm-prisk.com

WKO Seminar in Cooperation with L&M PRISK on 24 February 3pm CET

What is the current situation in Ukraine? What is the impact on the economy and how can Austrian companies deal with increased risk in the short, medium and long term?

To answer your questions on these topics, the WKO is organising a Zoom meeting in cooperation with L&M Political Risk and Strategy Advisory on Thursday, 24.02.2022 at 3 pm. The working language is German.

For registration, please follow this link.

Johannes Leitner analyses in a blog article in the Austrian newspaper Der Standard what exactly happened in Kazakhstan between 5 and 11 January. and what the potential consequences for MNEs will be.

Thirty years ago, the Soviet Union broke up and released 15 republics into independence, including the three states of the Baltic. They chose a path towards the West. Hannes Meissner speaks as an expert in the 43 minutes documentary, available in the ZDF media library.

Turkmenistan is one of the most repressive countries in the world, shaped by political risks for MNEs. The country is closed and thus offers only rare insights into political and economic contexts. Hannes Meissner is one of the few researchers that have carried out researches in the country. In an NTV podcast, he gives insights into Turkmenistan.

Thirty years ago, the Soviet Union broke up and released 15 republics into independence, including the states of Central Asia. ZDFinfo asks: What has become of them in Russia's shadow? Hannes Meissner speaks as an expert in the 44 minutes documentary, available in the ZDF media library.

The actions of companies are closely embedded in the political and institutional context of each country. The best current example of this is the Telekom subsidiary A1 Belarus.

Read the latest article by Hannes Meissner and Johannes Leitner in the Austrian newspaper “Der Standard”.