11. 05. 12. - 16:05

Economy not at risk, says Felderer

Economic expert Bernhard Felderer has dismissed concerns that the latest budget package could seriously harm the Austrian economy.

The Institute for Advanced Studies (IHS) researcher said he saw no risk for the development of the domestic economy in the near future. Felderer also rubbished claims that people might soon earn considerably less than before due to a possible move to intensified austerity by companies.

Felderer’s estimation follows a rather sceptical analysis by Markus Marterbauer, a Labour Chamber (AK) expert. Marterbauer described the savings package of Austrian Social Democrats (SPÖ) and People’s Party (ÖVP) as "socially balanced and overall acceptable given the current economic climate" – but he also warned that negative effects on the economy could not be ruled out. Marterbauer said people’s purchasing power could wane due to the various tax hikes while Economy Chamber (WKO) President Christoph Leitl criticised the coalition for a lack of structural public sector reforms.

Felderer said the domestic jobless rate could edge up due to the austerity pact which, according to a poll by OGM, would cause too strong pressure on people with low wages in the opinion of almost 60 per cent of Austrians.

Nearly 322,000 Austrians had no job last month, up by almost seven per cent compared to April 2011. Austrian Labour Market Service (AMS) chief Johannes Kopf promised to concentrate on fighting long-term unemployment while SPÖ Labour Minister Rudolf Hundstorfer revealed plans to invest an additional 20 million Euros on special labour initiatives for people who had been out of work for some time.

Especially handicapped and elderly people struggle to find a job in Austria these days, according to the AMS which offers various education courses and traineeship programmes. The number of unemployed people aged 50 and above soared by more than 10 per cent from April 2011 to the same month of 2012 when around 57,900 members of this age group had no work.

The SPÖ-ÖVP coalition recently struck a deal with the Swiss government about taxing Austrians’ assets in Switzerland. Such a measure had been included by the government in the 26.5-billion-Euro savings and tax package in February – weeks before the agreement with decision-makers in Bern was reached. The opposition harshly criticised SPÖ and ÖVP for its actions in this concern. The government is also under fire for planning with high additional revenue from a tax on cross-country financial transactions despite growing criticism of such plans across the continent.

Austrians are cautiously optimistic about the condition of their country’s economy regardless of the various economic uncertainties, according to an investigation by Spectra. The public opinion research group found that 49 per cent think that the Austrian economy will develop similarly to the past months in the foreseeable future. Only three in 10 predict a downturn. Nine per cent of Austrians think that the economy will grow, Spectra said.

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