With the outbreak of the corona pandemic, Austria has massively expanded financing for companies to deal with the consequences of the pandemic. In 2020 and 2021 these, calculated as a percentage of gross domestic product (GDP), were the highest in the entire EU. About four percent of domestic economic output went to businesses, the Momentum Institute reports.
According to preliminary figures from the EU database AMECO (Annual Macro-Economic), Austria is again among the top companies in an EU comparison this year, writes the trade union-linked Momentum Institute. In comparison, before the outbreak of the Covid pandemic, just under one percent of domestic economic output went to businesses as subsidies, according to the think tank.
Leader in financing in the EU
In 2020 and 2021, this support will quadruple to 15 to 16 billion euros or about four percent of economic output. On average, the EU countries spent only 1.7 percent of their economic output on business subsidies, so not even half. No other EU country has helped companies as well in these two years as Austria.
Also this year twice as high as before Corona
This year, funding in Austria is likely to be halved again, but at 1.9 percent of GDP, it would still be twice what it was before Corona. Only Belgium, the Netherlands and Greece are likely to spend more money on their businesses than Austria this year, but the EU average is significantly lower at 1.2 percent of GDP, they say.
Extra profits thanks to “Overfunding”.
“At many companies, the subsidies were so high that they did not absorb the extreme losses, as originally thought, but actually gave the company extra profit. In many cases there was overfunding,” criticized the Momentum Institute. In addition, support would be planned for the conversion of the economy to renewable energy sources.
On the other hand, the corporate income tax or the contribution to the equalization fund has been reduced, reducing the companies’ contribution to the state budget. From the Momentum Institute’s point of view, corporate contributions to the state budget should increase.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
