Every year, the Commission publishes Country Reports within the scope of the European Semester, from which the country-specific recommendations are derived. However, the Coronavirus crisis did arrive, which means that many reform proposals have to be reassessed. In this context, ETUC requests the country-specific recommendations to be postponed.

Lessons from the Coronavirus crisis

The current crisis and its far reaching economic and social consequences hold a mirror up to the Country Report’s recommendations for reform. If previously welfare state institutions were subordinate to cost efficiency, the crisis is now revealing that the ongoing battle for a well-developed healthcare, long-term care and pension system does pay off. The current Country Report, for example, urges Austria to reduce healthcare costs and to make nursing care more cost efficient. The Coronavirus pandemic impressively demonstrates which terrible consequences this would have entailed.

Need to take action in respect of gender equality and equal opportunities

As the Country Report rightly points out, gender-specific pay and pension gaps are posing a major problem. From the AK’s point of view, an effective policy formula would be to ensure employment for people with care responsibility that safeguards their livelihood and to increase the number of affordable care services. Pay transparency measures would also help. Unfortunately, according to a leaked version of the revised Commission Work Programme, the Commission itself does not appear to prioritise this. There is still plenty to do to achieve equal opportunities for all and to improve employment of low-qualified people or people with migration background. Apart from that, the lack of care personnel has been a long-known fact; the Country Report takes the issue up under the aspect of cost development. Beyond a simple cost-benefit analysis, the AK supports the revaluation and professionalisation of care professions, which must be reflected in improved working conditions and higher wages. The Commission also recommends lower taxation of labour. The AK supports this proposal and requests a general wealth tax and an inheritance and gift tax, which would counteract striking wealth inequality. The Austrian pension system is praised for its adequacy of pensions. At the same time, the Country Report implies a need for reform and a lack of “future sustainability” due to the alleged danger to financial viability. According to the AK’s point of view, this assessment is plain wrong; apart from this, clear progress has been made in respect of raising the effective pension age and the targeted increase of low pensions.

Ecological sustainability

With regard to the recently introduced sustainability chapter of the Country Report, the Chamber of Labour points to the necessity of a socially just ecological transition and urges to apply the Golden Investment Rule. In order to achieve the climate targets in spite of the Coronavirus crisis, the AK also proposes a national climate protection investment package. Apart from that, it is equally important to make an increased effort concerning energy efficiency and thermal building refurbishments. Departing from fossil heating energy and extensively restructuring the transport system are also of great importance.

Reform of the European Semester

The AK requests a paradigm change of the European Semester, which will focus on a balanced wealth-oriented economic policy in accordance with the “magic polygon”. One of the few positive aspects of the current exceptional situation is that tight budgetary constraints are not set in stone.  This year’s report mentions the Sustainable Development Goals (SDGs) for the first time. So far, the Country Report does not offer a coherent integration of the SDGs including formulating sub goals. The promise of a firm integration is to be welcomed; however, it has to be reflected in an analytical, instead of only descriptive dimension, which identifies the roots of the problem and priorities for action. For the purpose of democratic legitimation, the European Semester must also resettle in the institutional framework of EU institutions. To achieve this, the AK requests the participation of the European Parliament as well as a more committed integration of social partners and civil society.

Further information:

AK EUROPA Position Paper: Country Report Austria

AK EUROPA: European Semester: Commission attests Austria’s Need to take action

AK EUROPA Policy Brief: Economic Governance - Focus on Sustainable Development of Well-Being