The planned sale of rehabilitation facilities throughout Austria is endangering the health care system. ÖGB boss Wolfgang Katzian is therefore urgently calling for a subsequent review of the Vamed deal. “We are very concerned about the sale of this important infrastructure,” he said in an interview with the “Krone”.
The takeover of Vamed by the company PAI has consequences for many Austrian rehabilitation and healthcare institutions. Private equity companies such as PAI Partners do not represent the continuity of their investments, says Katzian. The company states that the average holding period for investments is six years. “The company shares are then resold with the aim of multiplying the purchase price. “It is clear that this profit orientation is at the expense of the quality of service and employees,” says Katzian. And emphasizes: “Many international examples prove this.”
The law provides for the investigation of problematic acquisition processes
The union wants to prevent the deal and believes it has found a legal way to do so: with investment control, Austrian corporate law has an instrument with which potentially problematic takeovers of key companies can be investigated. On the basis of an investment assessment, conditions can be imposed or the takeover process can be prohibited. The ÖGB therefore calls on Minister of Economic Affairs Martin Kocher (ÖVP) to investigate this sale in accordance with the Federal Act on the Control of Foreign Direct Investments (Investment Control Act).
PAI has a branch in France and 55 percent of its investors come from non-EU countries. “A precise list of investors has not been made public. However, media reports support our suspicion that investors do have a strong influence on the company’s activities. These activities should be prohibited, simply because of the company’s opaque structure and business model. The safety of the Austrian healthcare system must not be jeopardized,” Katzian concludes.
Treasurer Andreas Huss recently described PIA as a “locust” in an interview with the “Krone”. These are financial investors who buy companies, restructure them and sell them at a profit. This is usually accompanied by staff cuts, service cuts or restrictions for customers.
The Chamber of Labour also warns that international companies and financial investors are increasingly taking over parts of the social infrastructure. In Austria, this development is slower than in other countries, but the general well-being and stability of the economy and society are nevertheless at risk. Great Britain is a warning example, where the share of public beds in residential care for the elderly has fallen from two-thirds to just under four percent (!) since the 1980s.
In order to prevent developments like those in England or, to a certain extent, Germany, and to ensure that critical social infrastructure is geared towards the common good, the status of non-profit organisations must be strengthened and profit-driven investors must be pushed back, the AK demands. As with the regulation of primary care centres, where financial investors were proactively kept out, a protective shield could also be considered for other areas.
Investors must demonstrate the benefits to the country and its people
In addition, the screening of investments aimed at geopolitical security risks should also include risks to the general welfare. Starting points for this can be found, for example, in the Canadian ‘investment screening’, where the advertising investor must explain the net benefit of his investment for Canada. The Chamber of Labour also calls for an investment offensive by the public sector.
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.
