The European Commission has published its country-specific recommendations within the scope of the European Semester, in which the individual Member States are requested to take these into account when preparing their reform programmes. Austria, which according to the in depth analysis of the Commission has not been affected by macroeconomic imbalances, has been called upon to take measures with regard to essential points – among other in the pension sector.

The European Semester 2016

Based on the Annual Growth Survey, the Alert Mechanism Report and the country-specific reports, in which the European Commission determines priorities for economic and fiscal measures for the coming year on the one hand and analyses economic imbalances in the individual Member States on the other, the country-specific recommendations were now published within the scope of this process. Even though the recommendations of the Commission are not binding, it may - independent of the stage (“no irregularities”; “irregularities“; “excessive irregularities”) - take more intensive examination measures within the scope of the “macroeconomic imbalance procedure” and impose unilateral sanctions where appropriate. In the meantime, the recommendations are initial drafts, which shall be revised and adopted by the European Council in the further course.

Recommendations for Austria

· Healthcare and pension system

As in previous reports and recommendations by the Commission, it again holds the opinion that the statutory pension age should automatically be linked to rising life expectancy. This argument is based on rising costs, which would be incurred by the pension sector in the longer term. However, what has not been mentioned is that measures, such as limited access to invalidity pension and early retirement, a bonus-malus system and a corresponding employment initiative for the over fifties were adopted to increase the number of jobs for older employees. The fact, which has been regularly pointed out by the Chamber of Labour, and which has even been repeated in official Commission documents, i.e. that a high level of employment and a healthy labour market would lead to significantly reduced expenditure in an pay-as-you-go pension system such as the one in Austria has also been ignored. Therefore, the Chamber of Labour categorically rejects automatically linking pensions to retirement age, which has been demanded by the Commission in regular intervals.

· Labour market

Even though Austria, in comparison to EU-average, has one of the highest rates of employment, unemployment is on the increase and a high proportion of women work in part-time jobs. In order to counter the gender-specific pay gap, the Commission requests that Austria improves the situation for women in the labour market.

· Education

With regard to the education sector, Austria has already exceeded the Europe 2020 targets – with a lower early school leaving rate and a high rate of tertiary education qualifications. However, measures shall be taken to improve the situation for disadvantaged young people.

· Banks and Investments

The Austrian Banking sector continues to be confronted with big challenges; however, supervisory measures contribute to resilience. Even though, compared to other EU-countries, the level of investments is high; in spite of advantageous fiscal conditions they have remained weak since 2012. In this case too, the Commission requests that regulative and administrative hurdles are to be removed.

Further information:

Country-specific recommendation – Austria (available only in English)

The European Semester

Strategy Europe 2020