The industry-related economic institute EcoAustria has examined the corona aid from Austria in an EU comparison. This shows that Austria is at the top of the list of countries in terms of aid measures reported to the EU. How far these frameworks will actually be used has not yet been determined. The stronger fiscal reaction of Austria to the corona crisis compared with others is also a consequence of the severe economic slump, according to the study.
As a database, the institute took the deficit-increasing measures in the countries of the euro area in accordance with the budget drafts reported to the EU in autumn 2020: According to this, deficit-increasing measures to combat the pandemic and to mitigate its effects to the extent of 2020 percent of the Gross Domestic Product (GDP) expected. This is the highest value among all Member States. Germany is significantly below this with 6,2 percent.
In view of the resurgence of the pandemic in winter 2020/21, the member states have extended or intensified their measures. The numbers must therefore still be interpreted as provisional, according to the economic researchers. The institute expects the actual costs in the following investigations to tend to be somewhat lower due to the discrepancy between the budgetary framework and actual utilization.
10,2 percent of GDP in aid
Another 2021 percent of GDP is earmarked for 4. Cumulatively over these two years, the measures correspond to 10,2 percent of GDP, so that, according to these evaluations by the European Commission, Austria has taken the most extensive measures. The EU average is 5,5 percent of GDP.
EcoAustria has examined the payments (e.g. for short-time work) and shortfalls in income (e.g. due to deferrals) in euros per capita compared to Germany, Italy, the Netherlands, Switzerland and Sweden. In Austria these amount to 2.588 euros per person. In the comparison countries, less far-reaching measures were taken in 2020 (adjusted for purchasing power). In the Netherlands it was around 2.184 euros per capita, in Germany 1.271 euros and in Switzerland 1.260 euros. “In Austria, significantly more aid per capita was paid out than in other countries in the EU. We have thus secured companies and jobs and cushioned the consequences of the pandemic for Austria, ”said Finance Minister Gernot Blümel (ÖVP).
Austria's economy shrank significantly by 2020 percent in 6,6, significantly more than during the financial and economic crisis 10 years ago with a 3,8 percent decline. In Germany, the corona-related slump is likely to be 4,9 percent, in Switzerland 2,9 percent, in Sweden 2,8 percent and Denmark 3,3 percent. Declines of 6,6 and 6,2 percent are forecast for the euro area and the EU. The main influencing factor for the decline was the lockdown intensity: more closings were associated with higher slumps in growth. And the high share of tourism in the Austrian economy could explain around two thirds of the slump in growth in the first three quarters. The stronger fiscal reaction of Austria to the challenges of Covid-19 compared to other countries is therefore partly a consequence of the economic challenges, according to the study.
Consolidation measures necessary
In an international comparison, Austria decided to take very high support measures to guide employees and companies through the crisis. According to the available evaluations by the European Commission, the most extensive cumulative measures were taken in this country for the years 2020 and 2021. In view of the lockdown at the beginning of the pandemic and the new measures from November, these were important steps to strengthen income and liquidity and should help to enable the smoothest possible transition for the time after the crisis. “Against the background of the development of public debt and the challenges, among other things, in connection with the aging society and the fight against climate change, consistent consolidation is necessary after the crisis,” warns EcoAustria. The planned reduction in wage and income tax should also be implemented in order to prevent consolidation from primarily taking place via the cold progression, in which employees with wage increases slide into higher tax brackets and pay more taxes. (apa)