Within the framework of the Winter Package, the European Commission presented its Country Reports and provided the Council with a recommendation, which was less than pleasant for Austria: due to incorrect information of public debt, Austria needs to pay a fine of 29.8 million Euro.

The Winter Package initialises the next round of the European Semester, which began with the Autumn Package and the Annual Growth Survey in November. It is now that the national phase starts, during which the Commission analyses the economic and social challenges of the Union members and makes relevant recommendations. What is new this year is that the Member States were involved in the process prior to publication. Thus, they were able to examine the correctness of figures and issues; however, the final analysis was still carried out by the Commission. This dialogue shall be retained during the next steps of the European Semester to enable a better implementation of the recommendations.

The Winter Package focusses on the progress, which Member States have achieved with regard to both the financial sector and labour market policy from the Commission's point of view. At the same time, it has been noted that there was still a great need for reform in the area of goods and services liberalisation as well as combatting social exclusion and that progress so far had not met expectations. The Commission pointed out that in respect of employment and social issues, the fact that there were now 232 million employees in the Union meant that a new peak level had been met. It also regards the development of both unemployment rate and income distribution as tendentially improved, even though overall unemployment remains at an unacceptable high level. Hence, from the point of view of the Commission, the Member States should use the modest recovery, which the EU has currently experienced, to intensify their reforming efforts.

Overall, twelve countries were admonished because of their macroeconomic imbalances. The Commission again criticised Germany for her large trade surplus. This would damage the Monetary Union; Germany had to invest urgently, as also recently confirmed by Flassbeck and Bibow in the Study they prepared for AK und den ÖGB. However, compared to other Member States, the warnings of the Commission aimed at Germany remain without sanctions and thereby toothless, hence probably ineffective.

Concerning Austria, the Commission praises the income tax reform and the efforts made to integrate refugees into the labour market. However, the Commission criticises the fact that the gender-pay gap in income and pensions still exists –women remain disadvantaged and exposed to a greater risk of poverty. Hence, the principle of same pay for same work, which has long been demanded by the AK, seems still not to have been achieved. Apart from that, the Austrian education system does not guarantee social mobility and children from working-class families face much more difficulties in achieving an academic degree. For a long time, the AK has already pointed to this issue of passing on of education opportunities – the education system has to be become socially fairer! As also in previous recommendations, the Commission criticises the Austrian pension system and suggests increasing the legal state pension age. This is a point, which the AK does not support. Instead, it should be the aim to close the gap between factual and legal pension age, which requires measures concerning age-appropriate working conditions and the increased integration of older employees into occupational further training measures.

Austria suffered another accusation from a completely different direction – data on deficits and debt levels forwarded by Statistik Austria to EUROSTAT in 2012 and 2013 only contained a fraction of the debt level of the Land Salzburg and thereby breach EU legislation. The investigation, which was opened last year, has now reached the conclusion that the competent authorities had acted seriously negligent, even though Statistik Austria has subsequently published the 2014 deviations. The Commission therefore recommends a fine of 29.8 million Euro. Whether Austria has to pay the full amount has now to be decided by the Council, and hence by the individual Member States.

Further information

Factsheet of the Commission on the Winter Package

Country Report Austria

BAK: Annual Growth Survey 2017

Annual Growth Survey by the European Commission

European Commission: Proposal for a Council decision for a fine on Austria