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“Whatever it takes,” Finance Minister Gernot Blümel said at the beginning of the crisis. Now, in the midst of the crisis, the Fiscal Council, the body that supervises the finances of the State, dares to make an initial forecast.
Consequently, the Covid crisis will cost Austria 60 billion euros this year and next year alone. 60 billion: This corresponds to about 15 percent of the total national economic production (before the Crown).
Austria is lucky in misfortune. Because the country does not have to pay interest to assume the new debt of 60 billion. This is because Austria is internationally regarded as a business location that can also pay your debts. Still.
Don’t spoil the location
To keep it that way, it is now even more important not to damage this business location. Chancellor Werner Faymann, long-term and paralyzed, followed the strategy of doing no harm without doing anything. That no longer works. The crisis increases the pressure in the boiler.
Now we are all challenged multiple times. Initially short term. State aid measures will soon have to be curtailed if one does not want to capsize the entire state ship. The government will have to show a safe instinct. Example: Tax deferrals must be due in installments if you don’t want to trigger a tsunami of bankruptcy.
No consequences can be foreseen
But these are, without wanting to be cynical, little problems. The long term will only become apparent. The number of unemployed will remain high for years. As after the crisis of 2008/09, when unemployment did not slowly decline again until 2015.
Added to this are the disruptions in tourism with corresponding dramatic consequences for supplier industries. The fact that international guests will immediately flood the Alpine republic with the introduction of a vaccine can be seriously questioned.
Customer policy instead of reform
The will for change in the country can also be questioned. The structural measures of taxes, subsidies, federalism or climate protection that have been demanded for two decades (and emphatically again yesterday by the Fiscal Council) have not yet materialized. Because the rulers pursue a policy of clientele.
But whoever does not reform will reform. If Austria is to continue to be seen as a strong location, we will now save on costs and at the same time have to pay more taxes and duties.
Because we need margin for investments in new technologies and future projects. By the way, only the next generation will benefit from them. But the next generation will still pay our debts.
