The economic and social situation in Austria

The following study gives an overview of the current economic and social situation in Austria, with a particular focus on explaining the Austrian labour relations model and the importance of social partnership and its role in developments since the onset of the global economic crisis in 2008-2009. Austria is an interesting case study in the context of the continuing difficulties the EU faces and the wide disparities between Member States in terms of recent trends and current situation.

The main socio-economic indicators presented show Austria's position to be broadly satisfactory, especially compared with the rest of the euro area. Some years after the peak of the financial and economic crisis, Austria's GDP per capita is very high, employment is high and unemployment relatively low. Austria's positive economic ranking is partly due to its strong situation before the crisis and partly to subsequent trends. Over the longer term, Austria has benefited from above-average growth, which can be attributed in part to its efficient institutions and ability to adapt to changing conditions and in part to the positive impact of EU eastern enlargement and the country's geographical location in a strong and dynamic economic region.

After 2008, employment growth in Austria was markedly higher than the average for the euro area and the rise in unemployment was much smaller. In 2012, Austria registered the lowest unemployment rate in the EU for the third time running. Youth unemployment and the number of young people not in education, employment or training (NEETs) are also low compared with other European countries. Austria's labour market is generally characterised by a high degree of flexibility, loose protection against dismissal and high labour turnover. Active labour market policy plays an important role and the country has a sophisticated welfare system, which is reflected in a comparatively equitable income distribution and low at-risk-of-poverty rate. Although Austria's social spending as a percentage of GDP is around the European average, the risk of poverty is reduced more effectively through social transfers than in the rest of the euro area