Corona reconstruction - old plans for the new development plan

Digitization, climate, infrastructure - these were the keywords that the federal government sent the 600-page Austrian Corona development plan to the European Commission (EC) in Brussels. The non-public paper is available to the “Wiener Zeitung”. As a reminder: The EU countries have agreed on a € 750 billion Corona build-up fund, the Corona Resilience Fund. Austria can skim off around 3,5 billion euros from this for its own development projects. According to EU guidelines, the money should primarily be spent on climate, greening, digitization and education.

Indeed, the climate and digitization make up the biggest chunk in the domestic design that goes to Brussels. With 890 million euros, 20 percent of the budget is earmarked for broadband expansion. 573 million euros are to flow into climate-friendly investments in companies. This also includes the investment premium of 7 and 14 percent respectively for climate and digital investments, which was decided in the previous year. According to the Brussels guidelines, this is allowed. 543 million euros are to flow into the railway expansion and public transport and 462 million euros into research.

Much in the government program

Some of the points mentioned in the development plan are not new and can be found in the government program: broadband expansion, digitization, expansion of public transport, decarbonization of industry, greening of the tax system. In an initial brief analysis of the paper, the socially liberal Momentum Institute criticizes the fact that many of the measures have already been announced or have already been implemented. Specifically, only four percent of the projects with a total volume of 4,5 billion euros are new. These include, for example, the electronic mother-child pass, climate-friendly local centers or the retrofitting of sorting systems.

“What is new is that for the first time there are concrete figures on the projects mentioned,” says Oliver Picek, scientific director of the Momentum Institute, in an interview with the “Wiener Zeitung”. In addition, Picek sees little concrete for the job market or the unemployed. “We have around 190.000 long-term unemployed. I miss concrete measures for this group, ”says Picek. According to the Momentum Institute, around 10 billion euros in additional measures are needed to achieve short-term economic effects.

With the development package and the “comeback plan” announced at the beginning of the week, the federal government is hoping for an employment effect of 500.000 jobs. That's realistic, my economists. However, no less because of the announced measures than because of the return from short-time work to regular employment.

Effects in the long term

Most of those who are currently still registered for short-time work should switch back to proper employment from the summer, when the lockdowns are over and the vaccinations are slowly taking effect. Unless there is another wave of pandemics in autumn. This is especially true for industries such as gastronomy and tourism.

The federal government's development plan promises an additional growth effect of around 0,2 percent of domestic economic output. So GDP should grow so much more than without the development plan. Heike Lehner and Hanno Lorenz, economists at the economically liberal institute Agenda Austria, rate many of the announced measures as rather medium and long-term location projects. So they shouldn't have a quick, immediate effect on the economic recovery. “The majority of the measures relate to climate and digitization. We see little about fighting pandemics, ”says Hanno Lorenz, Deputy Director of Agenda Austria.

Not necessarily new projects

The question now is what else will be implemented as part of the “comeback plan”. Lorenz also sees relatively few measures aimed at the labor market. “The fact that long-term measures are financed from the government program is not problematic. You don't necessarily have to pull new projects out of your hat, ”says Heike Lehner. The projects communicated to Brussels could have been implemented without the corona crisis. “Digitization and broadband expansion are always good,” says the economist, however.