The director of the economic research institute Gabriel Felbermayr is quite critical of the current domestic political situation. In the months-long negotiations about a future coalition of ÖVP, SPÖ and NEOS, for example: “There must be clear statements about how we want to move forward. A plan for the future that should consist not only of savings, but also of a clear reform agenda on how to bring economic growth back to Austria.”
It remains unclear what the exact reason is for the current deplorable economic situation and dramatic budget deficit. Felbermayr: “There is currently a gap of 20 billion euros between income and expenditure in the budget. Things started to go wrong around 2016. You can see this very clearly in Germany, and also here in Austria. In an international comparison we see that we have been losing ground since 2016. Not so dramatic at first, but since the triple crisis of Corona, supply chains and inflation, things have now accelerated. You could say that something happened in the Austrian system about ten years ago. This is also the case in Germany.”
More power in new areas
The situation is currently particularly difficult in industry and industry-related services. Felbermayr: “The industry will recover. But there is headwind: energy prices are high. It is unlikely that we will reach the favorable levels of the US. We also have a location disadvantage when it comes to wages. But we also have to look at other areas. Tourism is doing well, but that is not necessarily the sector on which you can build your entire future. We need to be much stronger in the areas that are developing. These are green technologies. We are very strong in patents in Austria.”
Politics is not brave enough
The WIFO boss sends a small warning shot to the ÖVP. Felbermayr: “We are doing ourselves a disservice if we now go back to the technologies of the 20th century. Under the motto ‘Let’s make combustion engines again’. The combustion engines are good, but that does not improve the prospects for the next twenty years. We should therefore approach new technologies much more courageously.” In general, politicians in Austria do not act courageously enough. Summary statement from the WIFO boss, also addressing the ongoing negotiations on the sugar coalition: “It is clear that the impasse since the elections is not really good.”
Watch the entire interview in the video above!
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.
