“I can’t not mention Covid – it’s still making the entire situation quite difficult,” says Dorda Managing Partner Axel Anderl, when asked what’s happening in Austria “The current coalition between the Greens and the Conservatives is facing a lot of challenges.”
The most important measures that were implemented by the government to combat the crisis were quite intrusive, Anderl says, and were eventually repealed by the Constitutional Court. The government justified its actions by claiming that those measures were necessary to combat the crisis, and the fact they they were eventually found unconstitutional didn’t make them any less useful when implemented. He sighs. “This could be a hint of a potentially pernicious trend – how much can citizens trust the government and in democracy if it acts without proper considerations of its actions?”
Furthermore, Anderl says that the government is struggling to provide adequate financial stimuli to businesses. “The government first stated that it would do whatever it takes, at all costs, to prevent negative effects of the crisis,” he reports. “However, access to the funds was quite cumbersome and bureaucratic and thus triggered much criticism.”
While the government was extremely strict and focused during the first phase of the COVID crisis, the leadership has gotten lost a bit. “It would not appear that the government is as still as dedicated and ‘clean’ in its actions as it should be,” Anderl notes, critically. He insists that the government waited too long to introduce the most recent lockdown, which started as a “soft lockdown” on November 3, was subsequently tightened, and then ended on December 6 to allow Christmas shopping, despite a still-high infection rate. The lifting of the lockdown, he says, “could cost us dearly.”
Unsurprisingly, all of this has led to tensions in the ruling coalition itself. “The conservative majority wanted to take the reins of battling the crisis on its own with a quite strict regime,” Anderl reports, “but the Greens have advocated for a more hesitating approach, and, given that they control the Ministry of Health, this led to friction and a lack of decisive action.”
Anderl also says that there are problems with how the new aid during the second lock-down is distributed. “Some businesses, for example in the hospitality sector and restaurants, got as much as an 80% of their last year’s turnover for the same period in aid, which is far more than what they actually lost during the time of lockdown,” he says, describing “dust and uncertainty” surrounding business relief packages.
Anderl says that there have also been several legislative developments that, although Covid-inspired, could have more far-reaching consequences. “A law was put in place to prevent foreign investors from swooping in and acquiring significant domestic businesses for a bargain price,” he says. “These protective instruments, while useful now, have the potential to bleed over after the crisis ends, and the situation should be monitored to see how the government deals with it in the future.”
Austria is working to introduce the necessary structural and regulatory reforms and improvements to set up a 5G infrastructure, Anderl reports. “This is a hot topic in the EU,” he says, “and Austria, unlike some member states, has no issue with Chinese companies providing infrastructural support. The Austrian regulations just aim at objective criteria instead of discriminating against suppliers from certain countries or regions. If anything, the pandemic taught us all the importance of a stable Internet connection, especially in rural areas. Thus, 5G is one of the government’s lighthouse projects enabling more digitalization.”
Finally, Anderl reports that there have been regulatory changes in the transportation sector, reflecting substantial amounts of litigation between taxi companies and Uber and other comparable platforms. “Established taxi companies advocated heavily for removing Uber from the market, conflicting mostly over whether start prices for the rides should be fixed or not,” he says. While the old government rendered an act that was extremely protective of the taxi companies and requiring restricted taxi licenses for all means of individual transport, the new coalition took a more liberal approach. Right now, he says, it appears that Uber will prevail and will still be available to Austrian users. “The government made it possible to agree on prices, in the future, rather than have a fixed price – so we should see both taxis and Uber in the streets.”