COMMISSION STAFF WORKING DOCUMENT 2022 Country Report - Austria Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of Austria and delivering a Council opinion on the 2022 Stability Programme of Austria
Date: 2022-05-23
Institutions: European Commission, Secretariat-General
Subjects: Austria, economic policy, economic recovery, economic reform, energy policy, fiscal policy, labour market, participation of women, stability pact, stability programme

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 23.5.2022  SWD(2022) 601 final  COMMISSION STAFF WORKING DOCUMENT 2022 Country Report - Austria Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of Austria and delivering a Council opinion on the 2022 Stability Programme of Austria {COM(2022) 601 final} - {SWD(2022) 640 final}  
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

Austria’s economic rebound is 
losing momentum 

is 

Austria’s economy has recovered from its 
deepest recession since the Second World 
War,  but 
losing 
the  expansion 
momentum.  In  2020,  Austria’s  real  GDP 
declined  by  6.7%, partly due  to  the decline  in 
tourism caused by the COVID-19 pandemic (1). 
Supported  by  decisive  government  measures 
to protect businesses and stimulate consumer 
spending,  the  economy  recovered  to  pre-
pandemic  level  in  the  third  quarter  of  2021, 
with real GDP growing by 4.5% over the year. 
The  economy  is  now  expected  to  expand  by 
3.9%  in  2022  and  by  1.9%  in  2023  (for 
details, see Annex 18). Growth is supported by 
pent-up consumer spending, increasing private 
investment,  and  the  recovery  of  the  services 
and  tourism  sectors.  A  further  boost 
is 
expected  from  the  eco-social  tax  reform  and 
the Austrian recovery and resilience plan (RRP). 
Russia’s  invasion  of  Ukraine  risks  affecting 
Austrian exports and increases the uncertainty 
of the economic outlook.  

increased  strongly  and  will 
Inflation 
remain  high.  Energy  prices 
increased 
considerably  already  in  late  2021  and  are 
expected  to  remain  high.  After  reaching  2.8% 
in 2021, headline inflation is expected to peak 
at  6.0%  in  2022  before  gradually  easing  to 
3.0%  in  2023.  It  is  expected  that  these 
developments  will  over-proportionally  affect 
poorer  population  groups, if  not  addressed by 
compensatory  measures.  Austria  still  depends 
on  fossil  fuels  for  about  two  thirds  of  its 
the  country 
energy  use,  which  makes 
vulnerable  to  increases  in  the  international 
prices  of  energy.  Gas  accounts  for  more  than 

22%  of  Austria’s  energy  demand,  mostly  for 
heating and industry.  

investment 

Increasing  productivity  and 
resource 
productivity remains a challenge. Austria’s 
economy  is  driven  by  its  small  and  medium-
sized  enterprises  (SMEs),  but  the  country 
misses  out  on  productivity  gains  from  a 
stronger  role  of  high-tech  sectors.  Austria’s 
research  and 
very  high 
development (R&D) does not consistently lead 
to  more  innovation,  especially  measured  by 
new  products  or  business  creation.  Restrictive 
regulation remains an obstacle to productivity 
growth,  especially 
in  the  services  sector. 
Furthermore,  Austria’s  resource  productivity  is 
only  at  the  EU  average  and  its  circular 
material usage lags far behind EU leaders (see 
Annex 1). 

in 

During  the  COVID-19  crisis,  employment 
was effectively protected; however, skills 
and the supply of labour are now lagging 
behind  rising  demand.  Austria’s  short-time 
work  scheme  is  estimated  to  have  protected 
around  200 000  jobs  in  2020,  or  roughly  4% 
of  the  labour  force.  The  scheme  also  largely 
protected  households  from  the  income  shock 
of  the  pandemic (2).  Despite  the  depth  of  the 
recession,  unemployment 
increased  only 
slightly  in  2020  and  already  returned  to  its 
pre-pandemic  level  in  2021.  As  the  economic 
expansion  continues,  labour  shortages  are 
becoming more apparent and are expected to 
constrain the economy. There are shortages of 
workers in both high-skilled professions and in 
the 
tourism 
industries.  

services  and 

lower-skilled 

Labour shortages and skills gaps could be 
bridged  by 
for 
disadvantaged  groups.  It  would  be possible 

removing  barriers 

(1)  In  2019  tourism  and  related  services  were  responsible 
for about 19% of total employment (JRC121262). 

(2)  European  Commission  Quarterly  Report  on  the  Euro 

Area (QREA), Vol. 20, No. 4 (2021). 

2 

 
 
                                                 
                                                 
 
to more actively include many more people in 
the Austrian labour market, especially women, 
low-qualified  workers,  older  people,  and 
people  with  a  migrant  background.  This  could 
partly  be  achieved  by  providing  more  quality 
childcare and targeted training in certain skills, 
such  as  languages.  These  measures  would 
also  further  strengthen  Austria’s  performance 
on  the  European  Pillar  of  Social  Rights.  Aside 
from tapping into the potential of its domestic 
workers, migration of skilled workers to Austria 
from outside the EU could also help fill gaps in 
the labour market, especially for jobs requiring 
advanced IT skills.  

Graph 1.1: Labour market indicators 

levels  are  still  below  the  critical  threshold, 
indicating contained financial risks.  

(SDG  13,  climate  action). 

Austria scores well on the United Nations 
Sustainable  Development  Goals  (SDGs), 
Concerning  environmental  sustainability, 
Austria  lags  behind  its  own  ambitious 
target  of  reaching  climate  neutrality  by 
In 
2040 
particular,  emissions  in  the  transport  sector 
remain  high.  Austria’s  performance  on 
productivity  could  be 
improved  by  better 
innovation  outcomes.  On  fairness,  Austria 
performs generally well on SDG 1 (no poverty) 
due  to  its  functioning  safety  net  and  support 
policies, and on SDG 3 (good health and well-
being). Austria also performs very well on SDG 
indicators  related  to  macroeconomic  and 
institutional  stability,  and  has  improved  its 
investment share of GDP (See Annex 1). 

Austria is affected by Russia’s 
invasion of Ukraine  

Gas imports strongly depend on Russia as 
a supplier. In 2021, at least 80% of Austria’s 
total  gas imports  came  from  Russia (3).  It  will 
be  difficult  to  replace  them  by  imports  from 
alternative  sources  in  the  short  term.  The 
sanctions on Russia directly affect Austria’s oil 
and  gas  industry.  Large  increases  in  the  price 
of  gas  and  uncertainties  about  future  supply 
fertiliser, 
also 
pharmaceuticals, and plastics industries. 

chemicals, 

harm 

the 

commodities  and 

Rare 
intermediate 
goods  from  Russia  are  important  for 
certain  sectors.  Austrian  manufacturing 
faces  risks  of  disruption  in  certain  supply 
chains relying on imports of raw materials and 
intermediate products from Russia.  

The  financial  sector  has  a  considerable 
financial 
to  Russia.  Several 
exposure 

(3)  Source: 

Federal  Ministry 

for 
Energy,  Mobility, 

Environment, 
Technology 
https://www.bmk.gv.at/service/presse/gewessler/20220
426_ausstieg-russisches-gas.html 

(BMK) 

Climate 
Innovation 

Action, 
and 
estimates. 

Source: Austrian Labour Market Service Labour Force 
Survey (AMSLFS) 

House  prices  have  risen  considerably 
recently  and  are  showing  signs  of 
overvaluation. Real  house  prices  grew  by 
10.4%  in  2021,  considerably  faster  than  in 
previous  years.  According  to  the  Austrian 
National  Bank,  these  developments  cannot  be 
explained  by  fundamentals  alone, indicating 
an  overvaluation  of  about  20%.  Other 
indicators  such  as  the  historical  price-to-rent 
or  price-to-income 
to  an 
overvaluation  of  a  similar  magnitude.  Risks 
have  increased  to  a  level  that  requires  policy 
triggered  macro 
action 
prudential  recommendations  by  the  European 
Systemic Risk Board (ESRB) in February 2022. 
At the same time, construction activity is high, 
the  cost  of 
despite  steep 
construction; hence, house prices are expected 
to  grow  at  a  lower  rate  in  2022.  Private  debt 

ratios  point 

increases 

therefore 

and 

in 

3 

459514519524510/201810/201910/202010/2021Long-term unemployedUnoccupied jobsThousands 
  
                                                 
institutions have significant activities in Russia, 
notably 
locally  funded  subsidiaries.  Direct 
cross-border  lending,  however,  plays  a  minor 
role.  

The  overall  economic  impact  in  Austria 
will be noticeable, but growth is expected 
to  continue.  Disrupted  supply  chains  and 
likely  slow  down 
increased  prices  will 
the  ongoing 
economic  growth.  However, 
recovery  of 
tourism 
industries, decisive policy support and pent-up 
that  Austria’s 
consumer  spending  ensure 
economy continues to grow.  

the  services  and 

Russia’s  invasion  of  Ukraine  is  expected 
to  fuel  inflation.  Further  price  increases  (in 
particular  in  energy)  and  the  scarcity  of 
commodities  from  the  affected  regions  are 
likely to push up production costs. This will be 
reflected  in  consumer  price  inflation,  which 
was  already  high  before 
invasion. 
Consequently, this will slow down the recovery 
in Austrian manufacturing and dent purchasing 
power of Austrians.  

the 

in  Europe  (CARE) 

Austria registered a pronounced inflow of 
people  fleeing  war  in  Ukraine.  Exceptional 
support  under  the  Cohesion’s  Action  for 
Refugees 
initiative  and 
through  additional  pre-financing  under  the 
Recovery  Assistance  for  Cohesion  and  the 
Territories  of  Europe  (REACT-EU)  programme 
could  help  to  finance  expenditures  related  to 
the reception and integration. 

Sound public finances helped 
withstand the pandemic 

Public  finances  were 
in  good  health 
before  the  pandemic.  The  COVID-19  crisis 
hit  at  a  time  when  public  finances  were  well 
prepared.  In  2018,  the  budget  balance  turned 
positive for the first time since 1974 thanks to 
accelerated  economic  activity  and  a  sound 
fiscal  policy.  Before  the  outbreak  of  the 
pandemic,  the  debt-to-GDP  ratio  fell  to  a  10-
year  low,  at  70.6%  GDP  in  2019,  reflecting 
positive  budgetary  developments  before  the 

crisis  and 
payments. 

steadily  decreasing 

interest 

recovery 

following 

The  pandemic  and 
the  associated 
recession  put  an  abrupt  end  to  the 
positive  developments  in  public  finances. 
In 2020, the public deficit increased to an all-
time high of 8.3% of GDP (see Graph 1.2). This 
was  the  result  of  the  unprecedented  fiscal 
response  taken  to  counteract  both  the  socio-
economic consequences  of the pandemic, and 
the contraction in GDP. However, thanks to the 
the 
strong  economic 
relaxation  of  containment  measures  in  2021, 
positive  labour  market  developments  and  the 
sharp  rise  in  income-based  tax  revenues,  the 
deficit  stood  at  5.9%  of  GDP  in  2021.  This  is 
largely  the  result  of  strong  growth  in  tax 
revenues  and  social  contributions,  which 
exceed  pre-crisis 
levels.  However,  public 
expenditures  continued  to  rise  somewhat 
stronger 
to 
in  normal 
times  due 
continued 
crisis  management 
measures,  which  prevented  the  deficit  from 
decreasing  further.  The  deficit 
is  set  to 
improve to 3.1% in 2022 and to 1.5% in 2023 
on  the  back  of  the  economic  expansion.  The 
debt-to-GDP  ratio  is  expected  to  decrease 
from  its  peak  of  83.3%  in  2020  to  77.5%  in 
2023,  thanks  to  robust  nominal  growth  and 
moderate budgetary deficits.  

temporary 

than 

to 

support 

Large-scale  support  has  successfully 
stabilised  the  economy.  Austria  provided 
far-reaching 
households, 
businesses  and  public  services  in  2020  and 
2021 (4). 
COVID-19-
The 
Krisenbewältigungsfonds set up right after the 
outbreak of the pandemic was at the centre of 
the  emergency  support.  It  financed  various 
income-support  measures,  and  substantial 
grants  to  companies.  Taken  together  with 
large-scale  short-time  work  schemes,  the 
support measures provided a strong safety net 
to  companies  over  the  past  2  years (5).  The 

(4)  Apart  from  crisis-support  measures  financed  by  the 
COVID-19  crisis  management  fund  and  the  economic 
stimulus  package  that  have  a  direct  impact  on  the 
government  deficit,  companies  were  protected  from 
liquidity  shortages  through  tax  deferrals, 
reduced 
advance payments and guarantees.  

(5)  Compared  to  2019,  corporate  insolvencies  declined  by 
around  40%  in  2020  to  the  lowest  level  in  over  40 

4 

 
                                                 
 
economic  stimulus  package  adopted  in  June 
2020  brought  further  support  measures,  but 
was  also  geared  towards  kick-starting  the 
economic  recovery  in  line  with  the  green  and 
digital transition. 

Graph 1.2: Budget balance and components 

fairness  among 

the 
the  perception  of 
population.  Ensuring  a  just  transition  will  be 
key  to  securing  broad  support  for  reforms 
among  the  population.  The  recently  adopted 
eco-social tax reform is a valuable step in this 
direction. 

Source: European Commission (Autumn forecast 2021) 
Exemplary figures to be updated and reviewed after the 
SF2022 spring forecast 2022. 

The  economic  stimulus  package  and 
Austria’s  RRP (6)  will  help  the  country 
make  progress  on  the  green  and  digital 
transition.  Further  efforts  will  be  needed  to 
achieve the set climate and energy targets. In 
this  context,  the  tax  system  and  tax  mix  will 
play  an  important  role  as  tax  incentives  can 
have  significant  steering  effects  on  economic 
activity  and  resource  use.  On  the  one  hand, 
taxes  help  internalise  the  cost  of  pollution, 
lead  consumers  to  rely  more  on  renewable 
energy  sources  and  sustainable  mobility  and 
encourage  investors  to  seek  innovation  in 
climate-friendly  technology.  On  the  other 
hand,  the  tax  system  has  a  major  impact  on 

years,  according  to  data  by  the  credit  protection 
association KSV1870. 

(6)  The  Austrian  RRP  is  a  plan  for  EUR  4.5  billion  in 
investment,  a  significant  part  of  which  will  be 
supporting the green and digital transition. It is currently 
supported  by  EUR  3.46  billion  in  funds  from  the 
Recovery  and  Resilience  Facility 
the  EU’s 
instrument  for  recovery  from  the  COVID-19  pandemic. 
The RRP also contains major reforms. 

(RRF), 

5 

74.170.683.382.880.077.50.20.6-8.0-5.9-3.1-1.5-10.0-8.0-6.0-4.0-2.00.02.04.06.00.010.020.030.040.050.060.070.080.090.0201820192020202120222023% of GDPPublic debtHeadline balance 
  
                                                                        
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY 
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY 

e-mobility  (starting  in  2022),  (ii)  charging 
infrastructure  (which  should  be  in  place  by 
2026)  and  (iii)  rail  infrastructure  (which  has 
already  started  in  2020).  The  country  started 
to 
implement  an  exit  from  fossil-fuelled 
heating  systems  in  2021.  This  is  in  line  with 
Austria’s  long-term  renovation  strategy.  The 
transition towards a circular economy will also 
benefit from measures in the RRP, such as the 
2021  amendment  of  the  Waste  Management 
Act,  which 
in 
investment 
sorting  and 
facilities  and  a 
mandatory  deposit  system  for  non-reusable 
beverage  packaging.  The  planned  (2022)  soil 
protection strategy aims to tackle the intensive 
land  use  and  land  take.  In  combination  with 
RRP investments through the Biodiversity Fund 
starting  in  2023,  the  soil  protection  strategy 
will  also  better  protect  Austria’s  abundant 
natural assets (9). 

introduced  new 
recycling 

In  addition, 

The  realisation  of  projects  focussing  on 
the digital transition and innovation help 
catch up with innovation leaders. In 2021, 
Austria  started  to  distribute  digital  devices  to 
pupils in lower secondary school. The RRP also 
aims  to  improve  the  provision  of  broadband, 
so  that  it  can  be  accessed  by  46%  of 
the 
households  by  2023. 
digitalisation of small and medium-sized firms 
and 
introduction  of  e-government 
platforms  are  supported  by  measures  set  to 
be  implemented  in  2022  and  2023.  Austria 
has already started to implement a package to 
improve  the  business  environment  for  start-
ups. These measures will help make Austria a 
innovation  and 
more  attractive  place  for 
particularly start-ups. The RRP will see Austria 
important  projects  of 
participate 
in  two 
(IPCEIs),  on 
interest 
common  European 

the 

(9)  Austrian  vulnerabilities  in  the  area  of  ecosystems, 
biodiversity  and  sustainable  agriculture  are  confirmed 
by  the  vulnerabilities  synthetic  index  for  this  sub-area 
(Resilience 
of 
Dashboards | European Commission (europa.eu)). 

resilience  dashboard 

the  green 

Supporting the green and digital 
transition  

The Austrian recovery and resilience plan 
(RRP)  includes  a  comprehensive  package 
of  reforms  and  investments.  It  covers 
investments  of  EUR  4.5  billion,  of  which  EUR 
3.46  billion,  or  0.87%  of  2019  GDP,  will  be 
financed  by  the  Recovery  and  Resilience 
Facility (RRF) (7). The measures covering green 
and  digital  aspects  account  respectively  for 
59%  and  53%  of  the  financial  allocation.  In 
addition,  the  components  'knowledge-based 
recovery’  and  ‘just  recovery’  focus  on  policy 
actions  to  answer  key  challenges  that  Austria 
faces in the areas of research and innovation, 
skills  and  education,  health  and  long-term 
care,  childcare,  and  culture (8).  The  59 
measures in the RRP are expected to stimulate 
Austria’s economic development, which will be 
further  enhanced  by  spill-over  effects  from 
the  implementation  of  other  Member  States’ 
plans (see Annex 2 for further technical details 
on the RRP).  

Green 
investments  and  reforms  are 
progressing and help to support the green 
transition. The introduction of a CO2 price in 
sectors  that  are  currently  not  covered  by  the 
EU  Emissions  Trading  System  (ETS)  is  a  key 
project  of  Austria’s  RRP  and  one  element  of 
the eco-social tax reform (see Box 3.1). As set 
out  in  the  RRP,  a  nation-wide  flat-rate  public 
transport  ticket  was  launched  in  2021.  The 
RRP  also  contains  significant  investment  in  (i) 

(7)  Following the Council Implementing Decision of 13 July 

2021 

(8)  The  Recovery  and  Resilience  Scoreboard gives  a  full 
overview, including the contributions to all six pillars and 
further 
indicators. 
https://ec.europa.eu/economy_finance/recovery-and-
resilience-
scoreboard/country_overview.html?country=Austria 

6 

 
 
                                                 
                                                 
 
in  high-quality  early 
number  of  places 
childhood  care  facilities,  with  the  aim  of 
increasing the percentage of children in formal 
childcare  by  the  end  of  2023.  Austria  also 
aims  to  complete  the  funding  of  50  primary 
healthcare projects by the end of 2023. In the 
area  of 
long-term  care,  Austria  began 
implementing  a  pilot  project  on  ‘community 
nurses’ in 2021. 

microelectronics  and  hydrogen,  which  were 
launched  in  2021.  In  2021,  it  also  started  to 
implement  projects  in  quantum  science.  In 
2022,  the  country  will  start  setting-up  an 
institute  for  precision  medicine,  as  well  as 
projects 
in  the  area  of  digital  research 
infrastructure.  

Implementation  is  ongoing  for  a  number 
of  measures  aiming  at 
reinforcing 
economic  and  social  resilience.  The  RRP 
includes  several  measures  to  strengthen  the 
country’s pension system, which will, however, 
have  modest  effects  in  light  of  the  overall 
challenge. Since 2022, the early starter bonus 
(Frühstarterbonus) (10) is in force. In addition, a 
introducing  automatic  pension 
legal  basis 
splitting (11) will enter into force by the end of 
2022. Several measures address the identified 
labour and skills gap, as well as challenges in 
healthcare, 
to 
implementing  the  European  Pillar  of  Social 
Rights. In 2022, a one-stop shop for the long-
term unemployed will become operational. The 
RRP also includes investments to increase the 

contributing 

thereby 

Box 2.1:  Key deliverables under the recovery and resilience plan in the next 12 months 
Entry into force of the eco-social tax reform introducing a CO2 price. 

 

 

 

Exchanging oil and gas heating systems. 

Introducing  automatic  pension  splitting  for  parents  to  compensate  for  time  spent  on 
childcare by one spouse. 

  Adoption  of  the  Austrian  soil  protection  strategy  in  order  to  reduce  land  use  in  the 

coming years. 

 

 

 

Supporting the preservation and restoration of biodiversity through the Biodiversity Fund. 

Putting in place framework conditions for increasing collection rates for plastic beverage 
packaging.  

Facilitating the early stages of start-ups with the start-up package. 

  Digitalisation investments in at least 3 000 companies.  

 

Provision of broadband access to 46% of households. 

(10)  The early starter bonus helps acknowledge people who 
start  their  career  at  younger  age  than  common.  It 
replaces 
retirement  pension  without 
deduction. 

the  early 

(11)  Pension  splitting  describes  the  division  of  pension 
credits between parents to compensate  for  time spent 
on childcare by one spouse. 

7 

 
                                                 
 
FURTHER PRIORITIES AHEAD 
FURTHER PRIORITIES AHEAD 

labour 

sustainability, 

Beyond  the  challenges  addressed  by  the 
RRP,  as  outlined  above,  Austria  faces 
additional  challenges  not  sufficiently 
covered  in  the  plan.  These  concern  mainly 
fiscal 
shortages, 
productivity  growth  and  Austria’s  ambitious 
energy  security.  Addressing  these  challenges 
will  help  the  country  make  further  progress 
towards  achieving  relevant  SDG  indicators, 
innovation  and 
notably  SDG  9  (‘industry, 
infrastructure’), 
(‘responsible 
consumption  and  production’)  and  SDG  13 
(‘climate action’) (see Annex 1). 

SDG 

12 

Ensuring the sustainability of 
public finances as the population 
ages 

Austria’s  public  finances  weathered  the 
COVID-19  crisis  relatively  well,  but  they 
now  face  sustainability  challenges.  Key 
fiscal  indicators  are  expected  to  improve 
already in 2022 and fiscal concerns appear to 
be  contained  in  the  coming  years.  However, 
Austria  now  faces  demographic  trends  linked 
to the upcoming retirement of the baby-boom 
generation  and  increasing  life  expectancy. 
These demographic trends will put pressure on 
the  sustainability  of  public  expenditure  for 
pensions,  healthcare  and 
long-term  care, 
making  further  reforms  indispensable (12).  For 
instance,  the  number  of  elderly  Austrians 
(aged 65+) will increase by more than 60% in 
the  next  50  years (13).  The  ratio  of  elderly 

(12)  The  2021  Ageing  Report:  Economic  and  Budgetary 
Projections  for  the  EU  Member  States  (2019-2070) 
presents  projections  showing 
the  economic  and 
budgetary  impact  of  an  ageing  population  over  the 
long-term. 

people  to  the  working-age  population 
is 
expected  to  increase  from  two  pensioners  for 
every  person  in  working  age  to  roughly  three 
pensioners per person in working age over that 
time.  

come 

care  will 

Long-term 
under 
particular  financial  pressure.  The  cost  of 
long-term  care  is  expected  to  soar  by  up  to 
30%  in  the  next  8  years (14).  In  addition  to 
demographic developments, the need for more 
intensive care due to old-age-related illnesses 
is  also  expected  to  play  a  role  in  these 
increased  costs.  A  comprehensive  reform  of 
the  long-term  care  system  was  announced 
already  before  the  pandemic,  but  is  still 
pending. In early 2021, a dedicated task force 
on  long-term  care  has  presented  the  main 
conclusions  from  a  public  consultation  in  the 
form  of  17  objectives  and  63  measures  that 
could be taken to improve adequacy and fiscal 
sustainability (15).  On  fiscal  sustainability,  one 
priority  of  the  reform  will  be  setting  up  a 
coordinated overall control of the system with 
a  clear  assignment  of  responsibilities  across 
levels  of  government  and  transparency  about 
the  origin  and  use  of  funds (16).  Another issue 
is that nursing care in Austria is expected to be 
increasingly  affected  by  staff  shortages. 
76 000  new  persons  are  needed  in  the  acute 
inpatient  and  in  the  long-term  care  sector  by 
2030 (17).  This  number  can  only  partially  be 
reached with the current number of graduates. 
This  underlines  the  need  for  forward-looking, 

(14)  Based on The 2021 Ageing Report 

(15)  See  the  Report  of  the  task  for  on  long-term  care, 
via 

accessible 
https://www.sozialministerium.at/dam/jcr:d7f5ca44-
95d2-43f2-bb0c-
304ed51d50d2/Bericht_TFPflege_fin_.pdf 

(16)  Taskforce  Pflege:  Begleitung  des  Prozesses  zur 
Erarbeitung  von  Zielsetzungen,  Maßnahmen  und 
Strukturen, p. 36.  

(13)  Statistik  Austria  (2021):  Bevölkerungsprognose  2021, 

(17)  BMGSK  (2019):  Pflegepersonal-Bedarfsprognose  für 

base year 2020 

Österreich  

8 

 
 
                                                 
                                                 
 
addition,  spending  reviews  can  help  boost  the 
effectiveness  and 
public 
expenditures  as  they  help  scrutinise  financial 
allocations against policy priorities. 

efficiency  of 

needs-based planning and more attractive job 
conditions.  Two  of  the  ways  to 
improve 
working  conditions  for  nurses  is  to  focus  on 
better  training  and  better  salaries  in  the 
sector. The need to increase salaries in nursing 
has  gained  particular  prominence  during  the 
pandemic.  

The healthcare and pension systems also 
face persistent structural challenges.  The 
healthcare  system  proved  resilient  during  the 
pandemic  but  preventive  and  primary 
healthcare need to be further strengthened as 
too many healthcare services are still provided 
by hospitals. Efficiency gains and cost savings 
can  be  expected  from  the  ongoing  reform  of 
primary  healthcare  and  the  merger  of  social 
insurance  agencies.  The  pension  system 
provides  overall  adequate  pensions.  However, 
raising  the  statutory  retirement  age,  or  at 
least providing incentives to work longer, could 
also help strengthen fiscal sustainability.  

Länder 

and  municipalities 

Austria’s fiscal federalism is complex and 
provides  limited  incentives  for  efficient 
public  spending.  Without  relying  on  tax 
autonomy, budgets of the Länder (Austria is a 
federal  republic  divided  into  nine  regional 
states  known  as  Länder)  are  based  on  a 
complex  system  of  tax  sharing,  transfers  and 
cost  bearing.  In  2022,  40%  of  federal  tax 
revenue  is  expected  to  be  transferred  to  the 
different  subnational  governments,  using  a 
variety of allocation formulas (18). At the same 
time, 
have 
important  expenditure-incurring  tasks  in  the 
area  of  healthcare  and  social  protection.  This 
blurs  the  link  between  the  tax  burden  and 
government  expenditures.  It  also  makes  the 
system  difficult  for  the  administration  to  run 
and  for  the  public  to  understand.  Reforming 
this  framework  has  been  a  priority  of  the 
government for some time but the uncertainty 
underlying  tax  revenues  during  the  pandemic 
hampered  efforts  to  work  out  a  fully-fledged 
reform.  The  negotiations 
the  next 
Intergovernmental  Fiscal  Relations  Act  are 
expected  to  start  in  December  2022  and 
provide  a  new  opportunity  for  reform.  In 

for 

(18)  Federal  Ministry  of  Finances  (2021):  ‘Zahlungsströme 

zwischen den Gebietskörperschaften’. 

9 

 
                                                 
Box 3.1:  Austria’s eco-social tax reform: a step in the right direction  

With the eco-social tax reform, the government delivers on its promise of significant tax relief 
and implements a flagship project of the RRP. Plans for far-reaching relief were already considered 
in the past and follow the tradition to regularly compensate for the cold progression (1) around every five 
years (2016, 2010, 2005). The comprehensive reform reduces labour and corporate income taxes as well 
as social contributions. With the introduction of a CO2 price on fossil fuels that are currently not covered 
by the European Emissions Trading System (ETS) and compensatory measures, the reform also  includes 
an important measure of the Austrian RRP. The main reform measures are: 

 

 

reduction of personal income tax; 

increase  of  tax  credit  ‘Family  bonus 
plus’; 

  a 

on 

bonus 

health 

insurance 
contributions  for  self-employed  low- 
and  middle-income 
(and 
farmers); 

earners 

 

introduction  of  a  price  path  for  CO2 
emissions in non-ETS sectors; * 

  compensation  of  the  CO2  price  for 

households and businesses; * 

 

reduction of corporate income tax. 

* Measure included in the RRP 

These measures address some weaknesses of the tax system (2). Undoubtedly, lowering tax rates 
in the second and third income tax bracket will effectively reduce the tax burden but this merely offsets 
the cold progression accumulated since the last reform in 2015. Moreover, due to the non-indexation of 
tax  brackets,  the  relief  is  set  to  be  temporary  in  light  of  recent  surges  in  inflation.  The  increase  of  the 
Family  bonus  plus  reduces  the  tax  burden  but  its  current  design  might  create  disincentives  to  work  for 
second earners.  

The reform is expected to further boost private consumption, investment and employment. The 
impact of the reform on GDP growth hinges on the extent to which the relief affects savings, which were 
already  high  due  to  missing  consumption  possibilities  related  to  COVID-19  confinement  measures.  Real 
GDP is estimated to increase by 0.8% until 2026 and employment by about 27 000 people (+0.6%).  

The reform has paved the way for CO2 pricing, but the impact will be limited in the beginning. 
The introduction of a CO2 price for sectors that are currently not  covered by the EU ETS is an important 
step forward. The reform sets a national carbon price on fossil fuels, starting at EUR 30 per tonne of CO2 
and  reaching  EUR  55  in  2025,  inspired  by  the  German  example.  The  instrument  will,  therefore,  become 
more  effective  over  time,  with  the  initial  price  having  a  more  limited  impact  on  the  reduction  of  CO2 
emissions, as indicated in recent studies. While the introduction of a CO2 price and related compensatory 
measures were originally conceived as budget-neutral, the overall impact of the eco-social tax reform is 
now assessed to be deficit increasing over the coming years. 

(1) Cold progression, also referred to as tax bracket creep describes the additional tax revenue that arises when 
inflation pushes wages and salaries into higher tax brackets 
(2)  The  assessments  presented  here  are  based  on  comprehensive  analyses  carried  out  by  the  WIFO  Institute: 
‘CO2-Bepreisung in der Steuerreform 2022/2024‘, Research Briefs 13/2021, November 2021, Austrian Institute 
of  Economic  Research,  Vienna  2021.  ‘Steuerreform  2022/2024:  Makroeffekte’,  Monatsberichte  12/2021, 
December  2021,  Austrian 
‘Steuerreform  2022/2024: 
Institute  of  Economic  Research,  Vienna  2021. 
Maßnahmen’,  Monatsberichte  11/2021,  November  2021,  Austrian  Institute  of  Economic  Research,  Vienna 
2021. 

Structural  challenges  remain  in  the  area 
of  taxes.  The  new  eco-social  tax  reform 
provides  major  tax  relief  to  households  and 
businesses and lays the foundation for pricing 
CO2  emissions  (see  Box  3.1  above).  However, 

relevant  challenges  remain (19).  In  particular, 
comparatively  high  non-wage  labour  costs 
creation  and 
continue 

to  hinder 

job 

(19)  See European Commission Country Report Austria 2020, 
Country-specific recommendations 2020, WIFO studies, 
EDRC of the OECD. 

10 

 
                                                 
 
 
 
participation  in  the  labour  market,  especially 
for  second  earners (20).  Moreover,  the  tax 
system  is  characterised  by  a  number  of  tax 
expenditures (i.e.,  special  provisions  in  the tax 
code that reduce taxes through exceptions), as 
well  as  underused  potential  of  relatively 
growth friendly taxes, which can also improve 
the fairness of the tax system (21). 

Tapping into Austria’s labour 
market potential 

the  underused 

The  labour  market  is  recovering,  but 
there  is  scope  to  improve  labour  market 
participation  further.  The  strong  social 
protection  system  and  extensive  policy 
measures have limited the social impact of the 
COVID-19 pandemic. Austria performs well on 
most of the dimensions of the European Pillar 
of  Social  Rights,  but  some  challenges  remain, 
labour  market 
especially 
potential  of  women, 
low-qualified  people, 
older  workers,  and  those  with  a  migrant 
background.  This  is  particularly  problematic 
given  Austria’s  shortage  of  workers.  This 
shortage spans across several sectors (such as 
manufacturing,  tourism,  health  and  long-term 
care)  and  skills  (such  as  IT  workers,  doctors, 
engineers). Due to Austria’s ageing population, 
the number of people of working age between 
20  and  65  is  expected  to  fall  by  almost 
300 000 people by 2040. This means that the 
labour  force  will  shrink  by  5%  below  its 
current 
level.  This  will  further  aggravate 
existing skills shortages.  

The  labour  market  potential  of  women 
remains  underused.  While 
female 
employment  rate 
is  well  above  the  EU 
average,  Austria  ranks  second  highest  in  the 

the 

labour  market.  A 

EU  for  the  part-time  employment  of  women 
(49.9%  of  women  in  work  are  working  part-
time  in  2021),  leaving  considerable  potential 
to  strengthen  the  participation  of  women  in 
limited  supply  of 
the 
affordable,  high-quality  childcare  makes  it 
difficult  for  parents,  notably  mothers,  to 
participate more actively in the labour market. 
Only 21.1% of children under the age of 3 are 
in  formal  childcare,  which  is  well  below  the 
EU’s  33%  Barcelona  target  and  one  of  the 
lowest rates in the EU (see Annex 12 and 13). 
Although  the  Austrian  RRP  allocates  around 
EUR  28  million  to  the  expansion  of  childcare 
facilities, a recent study (22) puts the costs for 
a  full  nationwide  expansion  of  childcare 
facilities at EUR 1.6 billion. Two steps could be 
taken  that  would  improve  this  situation:  (i) 
further  extending  the  supply  of  high-quality 
childcare  with  longer  opening  hours;  and  (ii) 
increase  working 
tackling  disincentives  to 
hours,  such  as  the  relatively  low  salary  of 
women in part-time jobs. These two steps are 
key  to  both  making  the  most  of  women’s 
potential contribution to the labour market and 
helping  divide  childcare  duties  more  equally 
between  parents.  These  measures  would  also 
help  close  Austria’s  high  gender  pay  gap  (see 
Graph  3.1)  and  its  relatively  high  gender 
pension gap.  

There  is  scope  to  improve  the  labour 
market  participation  of  low-skilled  and 
older  workers.  Almost  half  of  the  long-term 
unemployed (23)  in  Austria  have  completed  at 
most  lower  secondary  school  (Pflichtschule). 
This 
since 
educational  outcomes,  job  opportunities  and 
future  income  levels  of  children  tend  to  be 
determined by those of their parents (24). While 

problematic 

especially 

is 

(22)  See  Eco  Austria, 

Ausbaus 
der 
Kurzanalyse, November 2021. 

„Kosten  des 
Kinderbetreuung 

flächendeckenden 
in  Österreich“, 

(20)  In 2021, the tax wedge of a secondary earner (2 earner 
household  without  children,  with  the  average  wage) 
stood  at 47.8% compared  to  an  EU average of 39.7% 
See ECFIN database on taxes and benefits 

(23)  Based on the AT long-term unemployed registered with 
the national PES with two characteristics: long-term job 
(langzeitbeschäftigungslos)  and  unemployed 
less 
is  collected  differently  than  the  statistics 
(which 
provided through the EU labour force survey).  

(21)  Revenues from recurrent property taxes are particularly 
low  in  Austria,  at  0.20%  of  GDP  compared  to  an  EU 
average  of  1.2%  in  2020.  See  also  OECD,  2019 
Economic  Surveys:  Austria,  p.  73.;  EC,  2018,  European 
Semester: Country Report Austria, p. 20. 

(24)  57% of the children of parents with a university degree 
also  have  a  university  degree,  while  only  7%  of  the 
children  of  parents  that  only  completed  compulsory 
school  have  a  university  degree  (Statistik  Austria, 
2018).  

11 

 
                                                 
                                                 
the  employment  rate  of  older  workers  (aged 
55-64)  increased  from  46.3%  in  2015  to 
55.2%  in  2021,  it  is  still  well  below  the  EU 
average  of  60.5%.  Raising  the  skill  levels  of 
workers  of  all  ages  is,  therefore,  essential  to 
ensure  fairness  and  better  working  lives,  in 
line  with  the  ambition  of  the  EU  headline 
targets on employment and skills by 2030. 

Graph 3.1: Unadjusted Gender Pay Gap (in %) 

Source: EUROSTAT 

to 

language  barriers  and 

The labour market participation of people 
with  a  migrant  background  remains  low 
due 
low 
qualifications.  To  break  the  link  between 
intergenerational education outcomes, reforms 
should target different layers of the education 
system.  Firstly,  general  measures  are  needed, 
such  as  greater  availability  of  early  childhood 
education,  all-day  schooling,  strengthened 
teacher training, and increased funding. These 
general  measures  should  be  complemented 
with more targeted policies, such as offers of 
individual  mentoring  for  schools  with  a  high 
percentage of disadvantaged students. On the 
integration of recent migrants (i.e. non-EU born 
residents  living  in  Austria  for  less  than  5 
years),  special  emphasis  should  be  placed  on 
making  German 
language  courses  more 
accessible.  Another  important  measure  is  to 
provide appropriate retraining and improve the 
attractiveness  of  the  apprenticeship  system. 
The  latter  two  points  will  be  particularly 
important  given  the  increasing  numbers  of 
people  fleeing  Ukraine  and  the  need  to 
integrate  them 
labour 
market. 

the  Austrian 

into 

growth  of  companies  that  rely  on  highly 
qualified  professionals,  such  as  IT  experts.  In 
2021,  there  were  24 000  fewer  IT  experts 
than  were  needed  by  Austrian  companies, 
according  to  a  recent  study (25).  One  potential 
short-term  remedy  would  be  to 
increase 
opportunities  for  highly  skilled  talent  from 
abroad  for  positions  that  cannot  be  filled  by 
the 
Austrian  or  EU  workers.  Currently, 
procedures 
in  place  entail  a  significant 
administrative burden on companies, making it 
hard to attract the necessary talent, ultimately 
hindering  productivity  growth.  Austria’s  ‘fast-
track’  scheme  for  skilled  labour  from  non-EU 
countries  (Rot-Weiß-Rot-Karte)  was  recently 
reformed,  but  this  has  led  to  even  fewer 
Further 
approvals  of  working  permits. 
measures  should  be  taken  to  ensure  faster 
and simpler procedures in the future. 

Closing the gap with innovation 
leaders 

to 

leaders.  According 

Productivity  growth  is  far  below  the  EU 
average  and  lagging  behind  the  EU’s 
innovation 
the 
European Innovation Scoreboard 2021, Austria 
is a ‘strong innovator’, but still lags behind the 
most innovative EU Member States (see Annex 
9).  As  a  result,  Austria’s  competitiveness  is 
declining in comparison to the EU’s innovation 
leaders  (see  Graph  3.2.).  According  to  the 
OECD (26),  the  steady  but  modest 
labour 
productivity  gains  of  Austria’s  SME-driven 
economy  are  mostly  due  to  improvements 
within  specific  sectors  rather  than  shifts 
towards  more  productive  high-tech  sectors. 
These  sector-specific  improvements  may  be 
related 
firm-specific 
long-term, 
improvements  in  the  skills  of  workers,  while 
the country’s services sector is trailing behind. 
Restrictive  regulation  remains  an  obstacle  in 
particular  for 
retail  sector  and  for 
exercising  certain  professional  services.  The 

the 

to 

(25)  See 

“IT-Qualifikationen 

die 
Wirtschaft“, IWI-Studie 02/2020, WKO. 

für 

österreichische 

Hiring  highly  skilled  talent  from  abroad 
remains  challenging.  The  increasing  skills 
shortage  (Fachkräftemangel)  is  holding  back 

(26)  See  OECD  Productivity  Statistics  2020,  GDP  per  hour 
worked, average annual growth rate for Austria (2012-
2019). 

12 

12669991010111112121314141414151517172020202020220510152025LUROITBEPLPTSIELCYIEHRESSEMTBGLTHUEU27DKNLFRFILVSKCZDEATEE 
  
                                                 
traditionally  important  tourism  sector  shows 
little potential for major productivity gains.  

Graph 3.2: Productivity growth 2016-2021 

Source: Statistik Austria, European Commission 

in 

the 

ranks  high 

Austria  has  the  third-highest  research 
intensity in the EU, but this does not fully 
translate  into  actual  innovation.  Research 
expenditure  has  been  growing  steadily  and 
Austria 
Innovation 
Scoreboard’s  ‘intellectual  assets’  dimension 
and  in  the  cooperation  of  its  companies  with 
public  research.  Overall  R&D  expenditure  is 
high in Austria’s traditionally  strong industries 
and  companies  but  remains  low  in  the  high-
tech  sector.  These  dynamics  strengthen 
specialisation  in  established  industries  but 
mean  that  Austria  falls  short  in  developing 
new markets or encouraging more early-stage 
innovation,  and  business  creation.  More 
sources  of  funding,  especially  through  grants 
for  applied  research  and  innovative  start-ups, 
could  help  unlock  innovation  and  ultimately 
benefit productivity. 

Structural  problems  remain  with  scaling 
up  start-ups.  In  2021,  Austria  produced  its 
very first ‘unicorn’ company (start-up valued at 
more  than  EUR  1  billion) (27).  This  is  a  very 
positive  development,  as  successful  upscaling 
lead  to 
of  start-up  companies  tends  to 

in 

fast-growing 

network  effects  that  benefit  the  broader 
economy. However, new business creation and 
employment 
innovative 
companies  remain  below  the  EU  average.  In 
addition, Austria was below the EU average for 
venture capital supply in 2021, and significant 
gaps  remain  between  Austria  and  innovation 
leaders  like  Denmark  and  Sweden  (see  Annex 
9).  The  insufficient  supply  of  venture  capital 
may  be  detrimental  to  Austria’s  start-up 
ambitions,  since  suppliers  of  venture  capital 
often  provide  not  only  financing  but  also 
advice  and  support  in  business  development. 
Austria  has  a  significant  share  of  foreign 
venture  capital 
total 
venture capital investment. This indicates that 
there  are  limited  local  funding  options (28).  To 
attract  a  broader  range  of  possible  investors, 
Austria  could  introduce  policies  to  promote 
equity  and  venture  capital  investment  in  the 
country.  Another  issue  faced  by  start-ups  is 
the  administrative  bottlenecks  that  make  it 
difficult  to  hire  skilled  labour  from  non-EU 
countries .Start-up associations say that this is 
a  major  problem  for  high-tech  start-ups  that 
traditionally rely on highly skilled workers from 
abroad (29). 

investment,  out  of 

Reducing dependence on Russian 
fossil fuels through renewables 
and infrastructure  

renewables 

The  geopolitical  developments  triggered 
by  Russia’s  invasion  of  Ukraine  have 
exposed  Austria’s  energy  security  to 
risks. Although Austria has already achieved a 
in  electricity 
high  share  of 
consumption (81% in 2020) and aims to reach 
100% by 2030 (see Annex 5), and dependence 
on  Russian  oil  is  below  EU-average,  major 
challenges remain. Austria is highly dependent 
on  gas  imports  from  Russia  (roughly  80% 
versus  44%  EU  average (30),  and  gas  remains 
a  major  energy  source  for  households  and 

(27)  Amaral-Garcia,  S.,  Compano,  R.,  Domnick,  C.,  Fako,  P., 
Gavigan J and Testa, G. (2022): High Growth Enterprises 
Demographics  &  Finance  with  a  focus  on  venture 
capital:  Factsheet  -  Austria,  European  Commission  – 
Joint Research Centre, Sevilla, Spain, JRC128693 

(28)  Amaral-Garcia et al., 2022. 

(29)  See Austrian Startups Policy Dashboard. 

(30)  Eurostat  (2020),  Russian  imports  of  gas  share  of  total 

extra-EU27 imports of gas.  

13 

1.3 1.5 1.7 1.7 1.7 1.8 2.6 3.7 3.9 5.3 5.4 0123456NLBEFRATITESFIDESELUDK% 
  
                                                 
                                                 
(23%  of 

it  comes 

companies  (see  Graph  3.3).  Gas  accounts  for 
more  than  20%  of  Austria’s  energy  demand, 
mostly  for  heating 
total  gas 
consumption) and industrial use (40% of total 
gas consumption). Diversifying energy supplies 
remains a major challenge for Austria, and will 
require targeted actions. This includes ensuring 
sufficient  capacity  in  interconnectors,  for  gas 
and  electricity,  with  neighbouring  countries, 
especially  when 
to  additional 
flexibility  and  reverse  flow  capacity  for  gas, 
while  ensuring  that  new  investments  into  gas 
infrastructure are future-proof where possible, 
to avoid lock-in effects on the path to climate 
neutrality.  This  diversification  could  also  be 
complemented  by  further  investments  in  the 
including 
production  of  renewable  gases, 
renewable  hydrogen  and  sustainable  bio-
methane. These renewable gases would allow 
Austria  to  replace  natural  gas,  in  particular  in 
sectors  and  regions  that  are  most  vulnerable 
to  supply  disruptions.  Finally,  additional 
sources  of  renewable  energy,  such  as  geo-
thermal  energy,  remain  underused  and  could 
be explored further.  

renewables  by  2030  and 

Lengthy  permitting  procedures  and 
underinvestment  in  the  electricity  grid 
are  key  challenges  for  reaching  the 
renewable  energy  targets.  In  2020,  the 
share  of  renewables  in  Austria’s  gross  final 
energy  consumption  was  36.5%.  The  2021 
reform  of  support  for  renewables,  included  in 
the RRP, has created the necessary framework 
for  increasing  the  share  of  renewable  energy 
in  electricity  consumption  through  adding  27 
TWh  of  yearly  electricity  generation  capacity 
from 
thereby 
contributing  to  reaching  the  100%  target  by 
2030 (from currently 81 % in 2020). However, 
investment  in  renewable  energy  is  hampered 
by  complex  spatial  planning  and  permitting 
procedures  (the  permitting  process  typically 
takes  6.3  years  for  wind  power  projects). 
These  lengthy  procedures  are  partly  due  to 
staffing  problems  and  a  complex  division  of 
powers  between  the  federal  and  regional 
governments.  To  accommodate  the  planned 
expansion  of  renewable  power  generation, 
Austria would need to significantly increase its 
investments in network infrastructure, such as 
storage, 
transmission 
networks.  The  estimated  investment  needs  in 

distribution 

and 

this area amount to EUR 18 billion to make the 
network  fit  for  100%  renewable  electricity 
within a decade (31). 

Graph 3.3: Energy mix and dependence on 
Russia 

Source: Austrian Federal Ministry for Climate Action, 
Environment, Energy, Mobility, Innovation and Technology 
(BMK)European Commission 

Increasing  the  level  of  ambition  for 
energy  efficiency  in  the  building  and 
industry sectors will help reduce reliance 
on  fossil  fuels.  Austria’s  2020  long-term 
renovation  strategy  sets  a  clear 
list  of 
its  planned  80% 
to  achieve 
milestones 
decarbonisation of the building stock between 
now  and  2050.  To  this  end,  the  Austrian  RRP 
will  foster  the  phasing  out  of  fossil  fuel 
boilers, replacing them with renewable heating 
technology  or  district  heating.  However, 
Austria’s  energy  efficiency  targets  for  2030 
are  low  in  ambition  (they  aim  to  reduce 
primary energy consumption from 31.5 million 
tonnes  of  oil  equivalent  in  2020  to  30.8 
million  tonnes  in  2030).  Given  the  sluggish 
pace  at  which  homes  have  been  renovated 
since  2015,  Austria  could  consider  further 
accelerating  its  investment  in:  (i)  the  deep 
renovation of buildings; (ii) renewable heating; 
and 
(iii)  better  management  of  energy 
(e.g.  through  smart  meters). 
consumption 
Further  synergies  can  be  achieved  by  efforts 

(31)  Austrian Energy Agency (2020): Von der Coronakrise zur 
klimaneutralen  Stromzukunft, Wirtschaftsimpulse  durch 
Investitionen in die Elektrizitätswirtschaft (link)  

14 

 
 
                                                 
to  coordinate  the  measures  and  incentives  in 
this  area  between  the  federal  and  regional 
levels. At the same time, energy efficiency and 
the  decarbonisation  of  industrial  processes, 
including through renewable gases, are key to 
helping  reduce  gas  demand  and  protecting 
businesses from price volatility. 

to 

target 

compared 

Austria  is  not  on  track  to  meet  its 
ambitious target of climate neutrality by 
2040.  So  far,  reductions  in  greenhouse  gas 
emissions  are  not  on  a  trajectory  compatible 
reduce 
with  Austria’s  binding 
greenhouse  gas  emissions  in  sectors  outside 
the  EU  Emissions  Trading  System  by  36%  by 
2030 
to  2005.  Even  when 
accounting  for  the  additional  measures (32) 
considered  for  2021-2030,  the  country  still 
risks falling short of this goal by 9 percentage 
points.  Before  2020,  emission  reductions  in 
the  energy  and  industrial  sectors  were  offset 
by  increases  in  final  energy  consumption  by 
buildings and transport, which have significant 
potential  for  emission  reductions  (see  Annex 
5). Currently, Austria serves as a major transit 
country  for  transalpine  road  freight.  Reducing 
transport-related emissions will be particularly 
crucial  for  the  transition  to  carbon  neutrality. 
Although  investment  in  sustainable  mobility 
accounts  for  the  largest  contribution  to  the 
climate  target  in  the  RRP,  developing  further 
mobility  solutions  and  alternatives  to  car  use 
(e.g.  local  buses,  car  sharing,  soft  mobility)  is 
warranted.  This  includes  solutions  aiming  at 
connecting  the  ‘last  mile’  to  public  transport 
networks, especially in remote and rural areas. 
Efforts  to  further  decarbonise  and  electrify 
heavy-duty  vehicles  could  be  also  stepped  up 
to curb emissions.  

(32)  The  additional  measures  do  not  take  into  account 
potential  emission  reductions,  stemming  from  the  of 
introduction of a CO2 price for sectors that are currently 
not covered by the EU ETS (see box 3.1) 

15 

 
 
                                                 
facilities,  as  well  as 
workers and migrants;  

low-skilled,  older 

  facilitating  hiring  processes  for  highly 
skilled  talent  from  abroad  to  address 
immediate  skills  shortages  in  the  labour 
market; 

  increasing  the  level  of  basic  skills  for 
disadvantaged  young  people,  particularly 
for those with a migrant background; 

  reducing its dependence on energy imports 
the  deployment  of 
by  accelerating 
renewable  energy,  in  particular  by  further 
streamlining  permitting  procedures  and 
investing in the required grid infrastructure, 
as well as storage and renewable gases; 

  accelerating  the  phase  out  of  fossil  fuels 
for heating buildings and increasing energy 
efficiency  measures  in  the  industrial  and 
building  sectors  by  supporting  investment 
in energy efficiency measures, and demand 
side management; 

  reducing 

emissions, 
transport-related 
notably by  developing mobility alternatives 
to cars. 

KEY FINDINGS 
KEY FINDINGS 

The  Austrian  RRP  represents  a  wide-
to 
ranging  and  ambitious 
Austria’s structural challenges through: 

response 

  the  introduction  of  a  price  path  for  CO2 
emissions  in  non-ETS  sectors  and  related 
compensation measures; 

  investment 

sustainable  mobility, 
renewable energy, and the phase-out of oil 
and gas heating;  

in 

  investment  in  broadband  that  reaches  half 
of  Austrian  households,  digitalisation  of 
companies, and the further digitalisation of 
public administration; 

  investment  in  digital  equipment  for  pupils, 
high-quality  early  childhood  care,  and 
measures 
learning 
to  compensate  for 
losses during the pandemic; 

  investing 

reskilling 
in  upskilling  and 
measures  and  setting  up  a  one-stop  shop 
to support the long-term unemployed.  

Beyond  the  reforms  and  investments  in 
the RRP, Austria would benefit from: 

  ensuring 

the 

fiscal  sustainability  and 
adequacy  of  its  healthcare  and  long-term 
care system;  

  reducing  complexity 

in  Austria’s  fiscal 
framework  to  make  public  spending  more 
efficient; 

  improving  the  tax  mix  with  a  view  to 

efficiency and fairness; 

  reducing  restrictive  regulation  on  retailers 

and certain professional services; 

  boosting the labour market participation of 
women,  notably  by  enhancing  childcare 

16 

 
 
 
ANNEXES 

 
 
 
LIST OF ANNEXES 

Cross-cutting progress indicators 

Annex 1: Sustainable Development Goals 

Annex 2: Recovery and Resilience Plan implementation 

Annex 3: Other EU instruments for recovery and growth 

Annex 4: Progress in the implementation of country-specific recommendations 

Environmental sustainability 

Annex 5: Green Deal 

Annex 6: Employment and social impact of the green transition 

Productivity 

Annex 7: Resource efficiency and productivity 

Annex 8: Digital transition 

Annex 9: Innovation 

Annex 10: Industry and single market 

Annex 11: Public administration 

Fairness 

Annex 12: Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

Annex 13: Education and skills 

Annex 14: Health and health systems 

Annex 15: Economic and social performance at regional level 

Macroeconomic stability 

Annex 16: Key financial sector developments 

Annex 17: Taxation 

Annex 18: Key economic and financial indicators 

Annex 19: Debt sustainability analysis 

LIST OF TABLES 

Table A2.1: 
Table A4.1: 
Table A5.1: 
Table A7.1: 
Table A8.1: 
Table A9.1: 
Table A10.1: 

Key elements of the Austrian RRP 
Summary table on 2019,2020 and 2021 CSRs 
Indicators underpinning progress on the European Green Deal from a macroeconomic perspective 
Selected resource efficiency indicators 
Key Digital Economy and Society Index Indicators 
Key research, development and innovation indicators 
Key Single Market and Industry Indicators - part 1(1 of 2) 

19 

21 

21 

23 

24 

26 

29 

29 

32 

34 

34 

36 

38 

39 

41 

43 

43 

45 

47 

49 

52 

52 

54 

56 

57 

23 
27 
31 
35 
37 
38 
39 

 
 
 
Table A10.2: 
Table A11.1: 
Table A12.1: 
Table A13.1: 
Table A14.1: 
Table A15.1: 
Table A16.1: 
Table A17.1: 
Table A18.1: 
Table A19.1: 

Key Single Market and Industry Indicators - part 2(2 of 2) 
Public administration indicators – Austria 
Social Scoreboard 
EU-level targets and other contextual indicators under the European Education Area strategic framework 
Key health indicators 
Selected indicators at regional level – Austria 
Financial soundness indicators 
Indicators on taxation 
Key economic and financial indicators 
Debt sustainability for Austria 

LIST OF GRAPHS 

Graph A1.1: 

Progress towards the SDGs in Austria in the last five years 

Graph A2.1: 

Share of RRF funds contributing to each policy pillar 

Graph A3.1: 

2014-2020 European Structural and Investment Funds (ESIF) 2014-2020 total budget by fund 

Graph A3.2: 

Cohesion policy contribution to the SDGs (EUR billion) 

Graph A4.1: 

Austria's progress on the 2019-2020 CSRs (2022 European Semester cycle) 

Graph A5.1: 

Fiscal aspects of the green transition: Taxation and government expenditure on environmental protection 

Graph A5.2: 

Biodiversity:  Terrestrial protected areas and organic farming 

Graph A5.3: 

Energy: Share in energy mix (solids, oil, gas, nuclear, renewables 

Graph A5.4: 

Mobility:  Share of zero emission vehicles (% of new registrations) 

Graph A6.1: 

Fair green transition challenges 

Graph A6.2: 

Energy poverty by income decile 

Graph A7.1: 

Economic importance and expansion of the circular economy: Employment and value added in the Circular Economy 

sectors 

Graph A11.1: 

Performance on the single market public procurement indicator 

Graph A13.1: 

Early leavers from education and training by country of birth, 2020 

Graph A14.1: 

Life expectancy at birth in years 

Graph A14.2: 

Projected increase in public expenditure on healthcare over 2019-2070 (AWG reference scenario) 

Graph A15.1: 

GDP per head (2019) and GDP growth (2010-2019) in Austria 

Graph A15.2: 

Territories most affected by the climate transition in Austria 

Graph A15.3: 

CO2 emissions from fossil fuels per head (2018) 

Graph A15.4: 

Gross value added per worker 

Graph A15.5: 

Excess mortality 2020-2021 by NUTS2 region (%) 

Graph A16.1: 

Issuance of green bonds 

Graph A16.2: 

Evolution of house price index 

Graph A17.1: 

Indicators on tax wedge 

Table A19.2:  

Heat map of fiscal sustainability risks for Austria  

40 
42 
43 
45 
48 
49 
53 
55 
56 
57 

22 

23 

24 

25 

26 

29 

29 

30 

30 

32 

33 

35 

41 

46 

47 

47 

49 

49 

50 

50 

51 

52 

52 

55 

58 

20 

 
 
 
 
CROSS-CUTTING PROGRESS INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

equal  opportunities  in  education,  in  particular  for 
disadvantaged  young  people,  and  also  to  foster 
gender equality and social inclusion (SDG 10). This 
has  been  acknowledged  by  several  measures  of 
the  Austrian  RRP  targeted  at:  (i)  access  to 
education, 
(ii) 
training  and  upskilling;  and 
assistance to socially disadvantaged women. 

Austria  performs  well  or  very  well  on  most 
SDG  indicators  related  to  productivity  (SDGs 
4,  8,  9).  Compared  to  the  EU  average  (54%), 
Austria performs relatively well in digital skills with 
63% of adults having at least basic digital skills in 
2021. Austria also performs well  on ‘Decent work 
and  economic  growth’  (SDG  8)  and  ‘Industry, 
innovation, and infrastructure’ (SDG 9). With 3.2% 
of GDP allocated to R&D in 2020, Austria has one 
of  the  highest  levels  of  R&D  spending  in  the  EU, 
even if this is below the national target of 3.76%. 
The  share  of  R&D  personnel 
in  the  active 
population  rose  from  1.65%  in  2015  to  1.83%  in 
2020 (EU: 1.42% in 2020). Austria’s RRP contains 
in 
several  measures  to  address  bottlenecks 
digitalisation  and  make  significant  investments  in 
strategic  research  and  innovation.  This  should 
ensure further progress on these SDGs.  

Overall,  Austria  performs  well  on  indicators 
related  to  macroeconomic  stability  (SDGs  8 
and  16).  Austria  performs  well  on  SDG  8  and 
notably  increased  its  investment  share  of  GDP 
from  22.7%  in  2015  to  25.3%  in  2020  (EU: 
22.33%  in  2020).  In  addition,  Austria  achieves 
high scores on indicators measuring ‘Peace, justice, 
and strong institutions’ (SDG 16), showing a stable 
and  predictable  environment  for  doing  business. 
The  RRP 
includes  several  targeted  measures 
aimed  at  improving  the  sustainability  of  the 
pension system and the quality of public spending, 
and  is  thus  expected  to  also  contribute  to  some 
extent  to  Austria’s 
long-term  macroeconomic 
stability.  

This  Annex  assesses  Austria’s  progress  on 
the  Sustainable  Development  Goals  (SDGs) 
along  the  four  dimensions  of  competitive 
sustainability.  The  17  SDGs  and  their  related 
indicators  provide  a  policy  framework  under  the 
UN’s  2030  Agenda  for  Sustainable  Development. 
The  aim  is  to  end  all  forms  of  poverty,  fight 
inequalities  and  tackle  climate  change,  while 
ensuring that no one is left behind. The EU and its 
Member  States  are  committed  to  this  historic 
global  framework  agreement  and  to  playing  an 
active  role  in  maximising  progress  on  the  SDGs. 
The graph above is based on the EU SDG indicator 
set  developed  to  monitor  progress  on  SDGs  in  an 
EU context (33). 

in 

SDG 

related 

Austria performs very well or is improving in 
most 
to 
indicators 
environmental  sustainability  (SDGs  2,  6,  9, 
11,  12,  13).  However,  it  still  needs  to  catch 
up  on  some  indicators  (SDG  15).  Austria  has 
historically  performed  very  well  on  the  share  of 
its  gross  final  energy 
renewable  energy 
consumption.  It  was  also  able  to  further  increase 
this share from 33.4% in 2015 to 36.5% in 2020, 
is  well  above  the  European  average 
which 
(22.09%  in  2020).  Various  measures  in  the  RRP 
aim  to  further  contribute  to  general  greenhouse 
gas  emission  savings  and  are  likely  to  positively 
impact  Austria’s  environmental  sustainability. 
These measures include the ‘eco-social tax reform’ 
and 
renewables,  energy 
in 
efficiency, zero-emission mobility and biodiversity.  

investment 

the 

Austria  generally  performs  very  well  or  is 
improving on SDG indicators that assess the 
fairness of society and the economy (SDGs 1, 
2, 3, 4, 5, 8, 10) (34). On ‘Quality education’ (SDG 
4),  Austria 
in  early 
childhood  education  and  care  (for  3-to-5-year-
olds) to 89.9% in 2019 and has steadily increased 
its  share  of  adults  with  a  tertiary  qualification 
from 38.6% in 2015 to 41.4% in 2020. However, 
there  is  still  room  for  improvement  in  ensuring 

increased  participation 

(33)  For  detailed  datasets  on  the  various  SDGs  see  the  annual 
ESTAT  report  ‘Sustainable  development  in  the  European 
Union’, 
https://ec.europa.eu/eurostat/product?code=KS-09-
22-019 

(34)  See  ‘Annex  12  –  Employment,  skills  and  social  policy 
challenges in light of the European Pillar of Social Rights’ for 
further information. 

21 

 
 
                                                 
 
 
 
 
 
 
 
 
Graph A1.1: Progress towards the SDGs in Austria in the last five years 

For detailed datasets on the various SDGs see the annual ESTAT report ‘Sustainable development in the European Union’, 
https://ec.europa.eu/eurostat/web/products-statistical-books/-/KS-03-21-096; Extensive country specific data on the short-term 
progress of Member States can be found here: Key findings - Sustainable development indicators - Eurostat (europa.eu) 
Source: Eurostat, latest update of 28 April 2022. Data mainly refer to 2015-2020 and 2016-2021. 

22 

 
 
ANNEX 2: RECOVERY AND RESILIENCE PLAN IMPLEMENTATION 
ANNEX 2: RECOVERY AND RESILIENCE PLAN IMPLEMENTATION 

The  Recovery  and  Resilience  Facility  (RRF)  is 
the  centrepiece  of  the  EU’s  efforts  to 
support  its  recovery  from  the  COVID-19 
pandemic,  fast  forward  the  twin  transitions 
and  strengthen  resilience  against  future 
shocks.  Austria  submitted 
its  recovery  and 
resilience  plan  (RRP)  on  30  April  2021.  The 
Commission’s positive assessment on 21 June and 
the  Council’s  approval  on  13  July  paved  the  way 
for disbursing EUR 3.46 billion in grants under the 
RRF  in  2021-2026.  The  financing  agreement  was 
signed  on  22  September  2021.  The  key  elements 
of the Austrian RRP are set out in Table A2.1. 

The  progress  made  by  Austria 
in  the 
implementation of its plan is published in the 
Recovery  and  Resilience  Scoreboard.  The 
Scoreboard  also  gives  a  transparent  overview  on 
the  progress  of  Austria’s  implementation  of  the 
RRF as a whole. The share of funds contributing to 
each of the RRF’s six policy pillars is outlined in the 
graph below.  

Table A2.1: Key elements of the Austrian RRP 

(1) See Pfeiffer P., Varga J. and in ’t Veld J. (2021), 
‘Quantifying Spillovers of NGEU investment’, European 
Economy Discussion Papers, No. 144 and Afman et al. (2021), 
‘An overview of the economics of the Recovery and Resilience 
Facility’, Quarterly Report on the Euro Area (QREA), Vol. 20, No. 
3 pp. 7-16.  
Source: European Commission 2022 

Graph A2.1: Share of RRF funds contributing to each policy pillar 

(1) Each measure contributes towards two policy areas of the six pillars. Therefore the total contribution to all pillars displayed on 
this chart amounts to 200% of the estimated cost of the Austrian RRP. The bottom part represents the amount of the primary 
pillar, the top part the amount of the secondary pillar. 
Source: RRF Scoreboard https://ec.europa.eu/economy_finance/recovery-and-resilience-scoreboard/country_overview.html 

23 

Total allocation EUR 3.46 billion in grants (0.87% of 2019 GDP)Investments and Reforms 32 investments and 27 reforms Total number of Milestones and Targets171Estimated macroeconomic impact (1) Raise GDP by 0.4-0.7% by 2026 (0.5% in spillover effects)Pre-financing disbursed EUR 450 million (September 2021) First instalment Austria did not yet submit a first payment request0%10%20%30%40%50%60%Green transitionDigitaltransformationSmart,sustainable andinclusive growthSocial andterritorialcohesionHealth, andeconomic,social andinstitutionalresiliencePolicies for thenext generation 
 
 
  
 
 
 
 
  
ANNEX 3: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 
ANNEX 3: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

The EU’s budget of more than EUR 1.2 trillion 
for  2021-2027  is  the  investment  lever  to 
help  implement  EU  priorities.  Underpinned  by 
an  additional  amount  of  about  EUR  800  billion 
largest 
through  NextGenerationEU  and 
instrument, the Recovery and Resilience Facility, it 
represents  significant  firepower  to  support  the 
recovery and sustainable growth. 

its 

Graph A3.1: 2014-2020 European Structural and 
Investment Funds (ESIF) 2014-2020 total budget 
by fund 

(1) EUR billion in current prices, % of total  
Source: European Commission, Cohesion Open Data  
Note: The data for the EAFRD refer to the period 2014-2022 
and for REACT-EU to the period 2021-22. 

support 

country-specific 

In  2021-2027,  EU  cohesion  policy  funds (35) 
development 
long-term 
will 
objectives  in  Austria  by  investing  EUR  1.29 
billion (36).  This  includes  EUR  135.8  million  from 
the  Just  Transition  Fund  destined  to  support  the 
regions most affected by the green transition and 
alleviate  its  socio-economic  impact  on  them.  The 
2019-2020 
recommendations 
and  investment  guidance  provided  in  the  context 
of  the  European  Semester  informed  the  drafting 
of  the  partnership  agreements  and  programmes 
for  the  2021-2027  Cohesion  funding  period, 
ensuring  synergies  and  complementarities  with 
other  EU  funding.  In  addition,  Austria  will  benefit 
from  EUR  6.1  billion  support  for  the  2023-27 
period from the Common Agricultural Policy, which 
supports  social,  environmental,  and  economic 
sustainability  and  innovation  in  agriculture  and 

(35)  European  Regional  Development  Fund  (ERDF), 

Interreg, 
European  Social  Fund+  (ESF+),  Cohesion  Fund  (CF),  Just 
Transition Fund (JTF) . 

(36) Current prices, source: Cohesion Open Data  

24 

rural  areas,  contributing  to  the  European  Green 
Deal, and ensuring long-term food security. 

In  2014-2020,  the  European  Structural  and 
Investment  Funds  (ESIF)  for  Austria  are  set 
to  have  invested  EUR  6.67  billion (37)  from 
the  EU  budget.  The  total  investment  including 
national  financing  will  have  amounted  to  EUR 
13.91  billion  (Graph  A3.1),  representing  around 
0.53%  of  GDP  for  2014-2020  and  16.76%  of 
public investment (38). By 31 December 2021, 83% 
of the total was allocated to specific projects and 
61%  was  reported  as  spent,  leaving  EUR  5.48 
billion to be spent by the end of 2023 (39). Among 
the 11 ESIF objectives, the most relevant ones for 
cohesion policy funding in Austria are research and 
innovation, the competitiveness of SMEs, and low-
carbon  economy.  By  the  end  of  2020,  cohesion 
policy investments had supported 856 enterprises 
in  Austria  and  had  led  to  the  direct  creation  of 
2 622 full-time equivalent jobs. Originally,  Austria 
had  planned  to  save  218 000  tonnes  of  CO2 
equivalent,  98 836  have  already  been  saved.  In 
total  302 623  tonnes  of  CO2  equivalent  will  be 
saved,  once  the  already  selected  and  ongoing 
projects are finalised. ESIF policy investments also 
supported  more  than  214 000  participants  in 
funded  projects  from  which  more  than  22 000 
gained  a  qualification  and  more  than  9 900  were 
in employment after a social inclusion project. 

(37)  ESIF 

includes  cohesion  policy  Funds  (ERDF,  ESF+,  CF, 
for  Rural 
the  European  Agricultural  Fund 
Interreg), 
Development  (EAFRD)  and  European  Maritime  and  Fisheries 
Fund  (EMFF).  According  to  the 
‘N+3  rule’,  the  funds 
committed for the years 2014-2020 must be spent by 2023 
at  the  latest  (by  2025  for  EAFDR).  Data  source:  Cohesion 
Open  data,  cut-off  date  31.12.2021  for  ERDF,  ESF+,  CF, 
Interreg; cut-off date 31.12.2020 for EAFRD and EMFF.. 

(38)  Public  investment  is  gross  fixed  capital  formation  plus 

capital transfers from the general government. 

(39)  Including 

REACT-EU. 
https://cohesiondata.ec.europa.eu/countries/AT 

ESIF 

data 

on 

10.4775%0.010%2.4618%0.967%EAFRDEMFFERDFESF 
 
  
                                                 
                                                 
 
 
Graph A3.2: Cohesion policy contribution to the 
SDGs (EUR billion) 

Source: European Commission 

policy 

are 
to 

already 
Cohesion 
funds 
the  SDGs 
substantially  contributing 
objectives.  In  Austria,  cohesion  policy  funds  are 
supporting  8  of  the  17  SDGs  with  up  to  97%  of 
cohesion  policy 
country 
spending 
contributing to the attainment of the goals.  

the 

in 

via 

the 

provides 

Technical 

Commission 

The 
tailor-made 
Support 
expertise 
Instrument  (TSI).  The  instrument  will  support 
Austria  in  designing  and  implementing  growth-
enhancing  reforms,  including  for  implementing  its 
RRP.  Since  2018,  Austria  has  received  assistance 
through  29  technical  support  projects  under  the 
TSI and the structural reform support programme. 
TSI-projects  can  have  a  variety  of  aims.  For 
example, TSI projects delivered in Austria in 2021 
aimed  at  (i)  strengthening  evidence-based  policy 
making,  and 
(ii)  digitalising  Austria’s  public 
administration  at  regional  level.  The  Commission 
also  helped  Austria 
implementing  specific 
in 
reforms  and  investments  in  the  RRP,  for  instance 
for  setting  up  primary  healthcare  units.  In  2022, 
new projects will start, including projects to further 
strengthen  the  national  financial  literacy  strategy 
by  setting  up  a  centralised  and  comprehensive 
online platform.  

to 

sources, 

REACT-EU 

instrument 

investments, 

The 
(Recovery 
Assistance  for  Cohesion  and  the  Territories 
of Europe) under NextGenerationEU provided 
EUR  278  million  of  additional  funding  to 
2014-2020  cohesion  policy  allocations  for 
Austria.  The  funding  aims  to  ensure  a  balanced 
recovery,  boost  convergence  and  provide  vital 
support  to  regions  following  the  coronavirus 
outbreak.  REACT-EU  helped  Austria 
(i) 
strengthen  research  and  innovation  capacities:  (ii) 
support  enterprise 
in  particular 
innovative,  green  and  digital  projects:  and  (iii) 
the  use  of 
increase  energy  efficiency  and 
in 
energy 
renewable 
companies.  Austria  will  also  use  REACT-EU  funds 
to  counteract  the  negative  long  term  social  and 
labour  market  consequences  of  the  pandemic, 
lower 
such  as  drop-outs 
employment  prospects 
(re)integrating 
unemployed into the labour market and (ii) training 
and upskilling of people, particularly in the health, 
care  and  ICT  sector.  The  funds  will  improve  the 
training  prospects  of  young  people  and  adults 
particularly affected by the Covid-19 pandemic (i) 
by  developing  and  implementing  care,  assistance 
and support measures in the school  sector and in 
the  transition  from  school  to  job,  (ii)  preventing 
early  drop-outs  from  education  and  vocational 
(iii) 
training  as  well  as  unemployment,  and 
training 
extending 
opportunities. 

in  education  or 

essentially 

continuing 

vocational 

(i)  by 

Austria  also  benefits 
from  other  EU 
programmes,  such  as  the  Connecting  Europe 
Facility,  which  allocated  EU  funding  of  EUR  962.3 
million  to  specific  projects  on  strategic  transport 
networks,  and  Horizon  2020,  which  allocated  EU 
funding of EUR 1.92 billion. 

25 

0.000.000.030.110.190.270.440.521.260.00.51.01.5SDG 15 Life on landSDG 11 Sustainable cities and…SDG 3 Good health and well beingSDG 13 Climate actionSDG 7 Affordable and clean energySDG 1 No povertySDG 4 Quality educationSDG 9 Industry, innovation,…SDG 8 Decent work and economic… 
  
 
ANNEX 4: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
ANNEX 4: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMENDATIONS 
RECOMMENDATIONS 

Graph A4.1: Austria's progress on the 2019-2020 
CSRs (2022 European Semester cycle) 

The  Commission  assessed  the  2019-2021 
country-specific  recommendations  (CSRs) (40) 
addressed  to  Austria  in  the  context  of  the 
European  Semester.  The  assessment  takes  into 
account  the  policy  action  taken  by  Austria  to 
date (41),  as  well  as  the  commitments  in  the 
recovery and resilience plan (RRP) (42). At this early 
stage  of  the  RRP  implementation,  overall  67%  of 
the CSRs focusing on structural issues in 2019 and 
2020  have  recorded  at  least  “some  progress”, 
while  33%  recorded  “limited”  (see  Graph  A4.1). 
Considerable  additional  progress  in  addressing 
structural  CSRs  is  expected  in  the  years  to  come 
with the further implementation of the RRP.  

Source: European Commission 

(40)  2021 

CSRs: 

https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX%3A32021H0729%2820%29&qi
d=1627675454457  
2020 
https://data.consilium.europa.eu/doc/document/ST-8439-
2020-INIT/en/pdf  
2019 
https://data.consilium.europa.eu/doc/document/ST-10173-
2019-INIT/en/pdf  

CSRs: 

CSRs: 

(41)  Incl.  policy  actions 

reported 

in  the  National  Reform 
Programme,  as  well  as  in  the  RRF  reporting  (bi-annual 
reporting on the progress with implementation of milestones 
and  targets  and  resulting  from  the  payment  request 
assessment). 

relevant 

subset  of 

(42)  Member  States  were  asked  to  effectively  address  all  or  a 
significant 
country-specific 
the 
recommendations issued by the Council in 2019 and 2020 in 
their  RRPs.  The  CSR  assessment  presented  here  takes  into 
account  the  degree  of  implementation  of  the  measures 
included in the RRP and of those done outside of the RRP at 
the time of assessment. Measures foreseen in the annex of 
the adopted Council Implementing Decision on the approval 
of the assessment of the RRP which are not yet adopted nor 
implemented  but  considered  as  credibly  announced,  in  line 
with  the  CSR  assessment  methodology,  warrant  “limited 
progress”.  Once  implemented,  these  measures  can  lead  to 
“some/substantial  progress”  or 
implementation”, 
depending on their relevance. 

“full 

26 

Limited Progress33%Some Progress63%Substantial Progress4% 
 
                                                 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table A4.1: Summary table on 2019,2020 and 2021 CSRs 

(Continued on the next page) 

27 

AustriaAssessment in May 2022*RRP coverage of CSRs until 20262019 CSR1Limited ProgressEnsure the sustainability of the health, Some ProgressRelevant RRP measures  planned as of 2021, 2022 and 2023. long-term care, Limited ProgressRelevant RRP measures  planned as of 2021. and pension systems, including by adjusting the statutory retirement age in view of expected gains in life expectancy. Limited ProgressRelevant RRP measures planned as of 2020 and 2022.Simplifyandrationalisefiscalrelationsandresponsibilitiesacrosslayersofgovernmentandalignfinancingandspendingresponsibilities.Limited ProgressRelevant RRP measures planned as of 2022. 2019 CSR 2Limited ProgressShift taxes away from labour to sources less detrimental to inclusive and sustainable growth. Some ProgressRelevant RRP measures planned as of 2021. Support full-time employment among women, including by improving childcare services, Limited ProgressRelevant RRP measures planned as of 2023.and boost labour market outcomes for the low skilled in continued cooperation with the social partners. Limited ProgressRelevant RRP measures planned as of 2020.Raise the levels of basic skills for disadvantaged groups, including people with a migrant background.Limited ProgressRelevant RRP measures planned as of 2021 and 2025. 2019 CSR 3Some ProgressFocus investment-related economic policy on research and development,  innovation, Some ProgressRelevant RRP measures planned as of 2021, 2022 and 2024.digitalisation,Some ProgressRelevant RRP measures planned as of 2021 and 2022.  and sustainability, taking into account regional disparities. Some ProgressRelevant RRP measures planned as of 2020, 2021, 2022, 2023 and 2024. Support productivity growth by stimulating digitalisation of businesses  and company growthSome ProgressRelevant RRP measures planned as of 2021 and 2022.  and by reducing regulatory barriers in the service sector.Limited ProgressRelevant RRP measures planned as of 2021. 2020 CSR1Some ProgressTakeallnecessarymeasures,inlinewiththegeneralescapeclauseoftheStabilityandGrowthPact,toeffectivelyaddresstheCOVID-19pandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuring debt sustainability, while enhancing investment. Not relevant anymoreNot applicableImprovetheresilienceofthehealthsystembystrengtheningpublichealth and primary care. Some ProgressRelevant RRP measures planned as of 2021, 2022 and 2023.  
 
 
 
 
 
  
 
Table (continued) 

* See footnote 42. 
Source: European Commission 

28 

2020 CSR2Limited ProgressEnsure equal opportunities in educationLimited ProgressRelevant RRP measures planned as of 2021 and 2025. and increased digital learning. Some ProgressRelevant RRP measures planned as of 2020 and 2021. 2020 CSR 3Some ProgressEnsure an effective implementation of liquidity and support measures, in particular for small and medium-sized enterprises,Substantial ProgressRelevant RRP measures planned as of 2022.  and reduce administrative and regulatory burden.Some ProgressRelevant RRP measures planned as of 2021.  Front-load mature public investment projects Some ProgressRelevant RRP measures planned as of 2022. and promote private investment to foster the economic recovery. Some ProgressRelevant RRP measures planned as of 2021. Focusinvestmentonthegreenanddigitaltransition,inparticularonbasic and applied research, as well as innovation,Some ProgressRelevant RRP measures planned as of 2021,2022 and 2024.sustainable transport, Some ProgressRelevant RRP measures planned as of 2020, 2021 and 2022.clean and efficient production and use of energy. Some ProgressRelevant RRP measures planned as of 2021 and 2022.  2020 CSR 4Some ProgressMake the tax mix more efficient and more supportive to inclusive and sustainable growth. Some ProgressRelevant RRP measures planned as of 2021. 2021 CSR1Some ProgressIn2022,maintainasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilienceFacility,andpreservenationallyfinancedinvestment.Keepthegrowthofnationallyfinanced current expenditure under control.Full ImplementationNot applicableWheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainability in the medium term. Some ProgressNot applicableAt the same time, enhance investment to boost growth potential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenanddigitaltransition.Some ProgressNot applicableGiveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainabilityofhealthand social protection systems for all.Limited ProgressNot applicable 
 
 
 
 
  
 
ENVIRONMENTAL SUSTAINABILITY 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 5: GREEN DEAL 
ANNEX 5: GREEN DEAL 

intends 

The  European  Green  Deal 
to 
transform  the  EU  into  a  modern,  resource-
efficient  and  competitive  economy  where 
there  are  no  net  emissions  of  greenhouse 
gases  (GHG)  in  2050  and  where  economic 
growth  is  decoupled  from  resource  use.  This 
annex  offers  a  snapshot  of  the  most  significant 
and economically relevant developments in Austria 
in  the  respective  building  blocks  of  the  European 
Green Deal. It is complemented by Annex 6 on the 
employment  and  social  impact  of  the  green 
transition  and  Annex  7  for  circular  economy 
aspects of the Green Deal.  

Graph A5.1: Fiscal aspects of the green transition: 
Taxation and government expenditure on 
environmental protection 

carbon  from  land  management  by  2030.  The 
integrated  national  energy  and  climate  plan 
(NECP)  sets  out  an  approach  for  mitigating  GHG 
emissions  and  adapting  to  a  changing  climate. 
However,  the  NECP  still 
intends  to  achieve 
significantly  fewer  reductions  than  are  set  out  in 
Austria’s  current  2030  target  under  EU  law. 
Austria  allocates  nearly  60%  of  the  current 
financial  allocation  under  its  RRP  to  climate 
objectives  and  Austria’s  RRP  also  outlines  crucial 
reforms  and  investments  to  further  enhance  the 
green  transition.  These  reforms  and  investments 
will  help  to  reduce  GHG  emissions  and  move 
towards  Austria’s  emissions  reduction  gap  by  the 
2030 target. 

Graph A5.2: Biodiversity:  
Terrestrial protected areas and organic farming 

Source: Eurostat 

A  significant  gap  remains  for  Austria  to 
reach  its  European  and  national  targets  for 
reducing  greenhouse  gas  emissions.  Austria 
has  committed  in  its  government  programme  to 
reaching climate neutrality by 2040. By 2020, the 
country’s  total  greenhouse  gas  emissions  were 
only  slightly  below  1990  levels,  even  though  the 
sum  of  the  sectors  not  covered  by  the  EU 
Emissions  Trading  System  (ETS) (43)  had  reached 
the  EU  2020  target.  Emissions  in  the  transport 
sector  have  increased  roughly  by  50%  between 
1990  and  2020.  Austria  is  putting  in  place 
climate 
additional 
adaptation  measures.  However,  these  do  not 
appear to  be  sufficient to  reach the  agreed  2030 
target for sectors not covered by the ETS, let alone 
the  more  ambitious  targets  proposed  in  line  with 
the  ambitions  under  the  European  Green  Deal. 
Under current land management practices, Austria 
is  projected  to  see  decreasing  net  removals  of 

climate  mitigation 

and 

Notes: For terrestrial protected areas, data for 2018 and data 
for the EU average (2016, 2017) is lacking.  
Source: EEA (terrestrial protected areas) and Eurostat 
(organic farming). Data on organic farming not available for 
2020. 

Austria’s fiscal indicators suggest that there 
is  space  for more  focus  on  the  environment. 
Austria  collects  less  revenue  from  environmental 
taxes (covering energy, the environment, resources 
and  pollution)  than  the  EU  average,  both  as  a 
percentage  of  GDP  and  as  a  percentage  of  total 
taxation (44).  Moreover,  the  Austrian  government 
spends a much smaller share of its expenditure on 
environmental  protection  than  the  EU  average. 
Planned reforms to Austria's tax  system target (i) 
the  pricing  of  GHG  emissions,  (ii)  incentives  for 
climate  friendly  technologies  and  (iii)  preferential 
tax  rates  for  low-emission  or  zero-  emission 
products.  Meanwhile,  the  climate  risk  to  public 
finances  due  to  uninsured  assets  is  considered 
low/moderate.  

(43)  Buildings, road and domestic maritime transport, agriculture, 

waste and small industries. 

(44)  For more information on taxation see Annex 17 

29 

0.01.02.03.04.05.06.0Environmental taxes (% ofGDP)Environmental taxes (% oftotal taxation)Government expenditureon environmentalprotection (% of totalexpenditure)AT (2020)EU27 (2020)0102030402016201720192020ATTerrestrial protected areas (% total area)Area under organic farming (% total utilised agricultural area)EU27 (terrestrial)EU27 (organic) 
 
 
  
                                                 
  
                                                 
 
 
particulate  matter  in  2020.  Austria  will  likely  not 
meet  its  commitments  for  ammonia  for  2020-
2029  and  for  ammonia  and  nitrogen  oxides  for 
2030  onwards.  On  the  pollution  of  ground  water 
with nitrates, the situation continues to slowly but 
steadily improve.  

Graph A5.4: Mobility:  
Share of zero emission vehicles (% of new 
registrations) 

of 

100% 

investment 

to 
renewable 

Austria  is  leading  in  renewable  energy.  81% 
of  its  electricity  mix  is  composed  of  renewables, 
mainly from hydropower. Nonetheless, Austria still 
reach 
requires  significant 
its 
objective 
electricity 
consumption  by  2030.  The  share  of  renewables 
(including  biofuels)  in  Austria’s  energy  mix  is 
34.9%,  followed  by  fossil  fuels  such  as  oil 
(34.7%), natural gas (22.7%) and solid fossil fuels 
like  coal  (7.7%).  Austria  has  no  nuclear  power  as 
this  is  barred  by  law  and  the  country  has  been 
coal-free  in  electricity  production  since  2020.  To 
ensure  the  effective  deployment  of  renewables, 
including  those  investments  already  foreseen  in 
the  RRP,  Austria  could  tackle  administrative  and 
procedural  bottlenecks 
lengthy 
permitting procedures. 

cause 

that 

Graph A5.3: Energy: 
Share in energy mix (solids, oil, gas, nuclear, 
renewables 

Notes: Zero emission vehicles (passenger cars) include battery 
and fuel cell electric vehicles (BEV, FCEV).  
Source: European Alternative Fuels Observatory.  

Emissions  in  the  transport  sector  have  been 
increasing 
in  recent  years.  After  1990, 
emissions in road transport significantly increased, 
peaking in 2005. After a gradual reduction up until 
2012,  road  transport  saw  again  a  systematic 
increase  in  emissions  prior  to  2020  (when  it 
witnessed  a  steep  decline  due  to  the  COVID  19 
pandemic).  The  country  has  been  working  to  shift 
these  transport  volumes  to  rail  by  offering 
incentives.  Austria  performs  above  EU  average  in 
electrifying  road  transport  and  in  the  share  of 
electrified 
The  market 
development  for  zero-emission  road  vehicles  is 
also  growing  rapidly.  The  investment  and  reform 
measures  included  in  the  RRP  will  help  to  further 
decarbonise  the  transport  sector.  Nevertheless, 
more  efforts  are  needed  to  significantly  reduce 
GHG emissions. 

kilometres. 

railway 

Notes: The energy mix is based on gross inland consumption, 
and excludes heat and electricity. The share of renewables 
includes biofuels and non-renewable waste.  
Source: Eurostat.  

On  biodiversity  and  ecosystem  health, 
Austria presents a mixed picture. With 25% of 
its utilised agricultural area under organic farming, 
it  is  the  EU’s  frontrunner  in  this  area.  However, 
many protected habitats and species remain in an 
unfavourable  conservation  status,  with  further 
recent  declines  despite  evident  improvements  in 
the  level  of  conservation  and  restoration  efforts 
over  the  recent  decades.  In  addition,  there  have 
been  significant  declines 
the  share  of 
biodiversity-rich  agricultural  areas.  Whereas 
populations  of  birds  mostly  appear  to  be  faring 
better  than  Habitats  Directive  species,  some 
species decreased or went extinct recently.  

in 

is 
On  pollution,  air  quality 
generally 
No 
exceedances  above  the  EU’s  air  quality  standards 
were  registered  for  nitrogen  dioxide  or  fine 

good  with 

in  Austria 

exceptions. 

30 

020406080100200520102015201820192020ATSolid fossil fuels, peat and oil shaleOilGasNuclearRenewables0.02.04.06.08.010.012.014.0201620172018201920202021% of new registrationsATEU27 
  
  
 
Table A5.1: Indicators underpinning progress on the European Green Deal from a macroeconomic 
perspective 

(1) The 2030 non-ETS GHG target is based on the Effort Sharing Regulation. The FF55 targets are based on the COM proposal to 
increase EU's climate ambition by 2030. Renewables and energy efficiency targets and national contributions under the 
Governance Regulation (Regulation (EU) 2018/1999). (2) Distance to target is the gap between Member States’ 2030 target under 
the Effort Sharing Regulation and projected emissions, with existing measures (WEM) and with additional measures (WAM) 
respectively, as a percentage of 2005 base year emissions. (3) Percentage of total revenues from taxes and social contributions 
(excluding imputed social contributions). Revenues from the ETS are included in environmental tax revenues (in 2017 they 
amounted to 1.5% of total environmental tax revenues at the EU level). (4) Covers expenditure on gross fixed capital formation to 
be used for the production of environmental protection services (i.e. abatement and prevention of pollution) covering all sectors, 
i.e. government, industry and specialised providers. (5) The climate protection gap indicator is part of the European adaptation 
strategy (February 2021), and is defined as the share of non-insured economic losses caused by climate-related disasters. (6) 
Sulphur oxides (SO2 equivalent), ammonia, particulates < 10µm, nitrogen oxides in total economy (divided by GDP). (7) 
Transportation and storage (NACE Section H). (8) Zero emission vehicles include battery electric vehicles (BEV) and fuel cell 
electric vehicles (FCEV). (9) European Commission Report (2019) 'Benchmarking smart metering deployment in the EU-28'. (10) 
European Commission (2021). Each year the digital economy and society index is recalculated for all countries for previous years 
to reflect any possible change in the choice of indicators and corrections to the underlying data. Country scores and rankings may 
thus differ compared with previous publications. 
Source: Eurostat, JRC, European Commission, EEA, EAFO 

31 

TargetTarget2005201920202030WEMWAM2030WEMWAMNon-ETS GHG emission reduction target (1)MTCO2 eq; %; pp (2)56.3-12%-18%-36%-19-9-48%-31-21200520162017201820192020Share of energy from renewable sources in gross final consumption of energy (1)%24%33%33%34%34%37%46-50%Energy efficiency: primary energy consumption (1)Mtoe32.732.032.831.832.329.728,7-30,8Energy efficiency: final energy consumption (1)Mtoe27.928.128.527.828.326.124,0-25,6201520162017201820192020201820192020Environmental taxes (% of GDP)% of GDP2.42.32.42.32.32.12.42.42.2Environmental taxes (% of total taxation)% of taxation (3)5.55.65.75.45.45.06.05.95.6Government expenditure on environmental protection% of total exp.0.790.750.730.760.810.691.661.701.61Investment in environmental protection% of GDP (4) 0.200.210.220.25--0.420.380.41Fossil fuel subsidiesEUR2020bn0.330.340.310.310.30-56.8755.70-Climate protection gap (5)score 1-4Net GHG emissions1990 = 10010010110610210494797669GHG emissions intensity of the economykg/EUR'100.230.230.230.220.220.210.320.310.30Energy intensity of the economykgoe/EUR'100.110.110.110.100.100.100.120.110.11Final energy consumption (FEC)2015=100100.0102.1103.7101.2103.094.8103.5102.994.6FEC in residential building sector2015=100100.0104.2104.998.5100.7100.8101.9101.3101.3FEC in services building sector2015=100100.098.2106.4104.1106.8103.7102.4100.194.4Smog-precursor emission intensity (to GDP) (4)tonne/EUR'10 (6)0.490.460.460.440.46-0.990.93-Years of life lost caused due to air pollution by PM2.5per 100.000 inh.702598635738606-863762-Years of life lost due to air pollution by NO2per 100.000 inh.1421201209565-12099-Nitrate in ground watermg NO3/litre23.622.822.521.921.8-21.720.7-Terrestrial protected areas% of total-27.728.1-28.128.8-25.725.7Marine protected areas% of total-------10.7-Organic farming% of total utilised agricultural area20.321.323.424.125.3-8.08.59.100-0606-1212-18Net land takeper 10,000 km213.011.05.0201520162017201820192020201820192020GHG emissions intensity of transport (to GVA) (7)kg/EUR'100.400.390.450.450.580.370.890.870.83Share of zero emission vehicles (8)% in new registrations0.51.21.52.02.86.41.01.95.489791298812Share of electrified railways%71.271.971.871.972.1-55.656.0-27.127.227.227.227.1-28.928.8-YearATEUShare of smart meters in total metering points (9) - electricity% of total201811.835.8Share of smart meters in total metering points (9) - gas% of total20180.013.1ICT used for environmental sustainability (10)%202169.665.9EnergyProgress to policy targetsAUSTRIAEUFiscal and financialindicators2 out of 4 (slight increase from historical level of 1,5). This is a low/medium risk category (4 being a high risk).ClimateMobilityDigitalNumber of plug-in electric vehicles per charging pointCongestion (average number of hours spent in road congestion per year by a representative commuting driver)'Fit for 55'DistanceDistanceNational contribution to 2030 EU targetPollutionBiodiversity2000-20062006-20122012-20189.16.38.0 
 
  
 
ANNEX 6: EMPLOYMENT AND SOCIAL IMPACT OF THE GREEN TRANSITION 
ANNEX 6: EMPLOYMENT AND SOCIAL IMPACT OF THE GREEN TRANSITION 

The  green  transition  not  only  encompasses 
environmental 
to 
improvements 
sustainability, but also includes a significant 
social  dimension. While  measures  in this  regard 
include the opportunity for sustainable growth and 
job creation, it must also be ensured that no one is 
left behind and all groups of society benefit from 
the  transition.  Austria’s  green  transition  benefits 
from  (i)  already  having  a  strong  green  economy 
compared  to  the  EU  average;  (ii)  positive  trends 
and  (iii)  promising  recent  policy  measures.  At  the 
same  time,  the  country’s  energy-intensive  sectors 
are sizeable and lower-income groups are likely to 
face challenges in the green transition.  

Graph A6.1: Fair green transition challenges 

Source: World Inequality Database 

to  help 

Austria’s  RRP  outlines  crucial  reforms  and 
investments  for  a  fair  green  transition.  The 
country  has  already  launched  an  ‘eco-social  tax 
reform’ that is set to combat  climate change in a 
socially  fair  way.  A  ‘climate  ticket’  for  public 
transport  in  the  form  of  a  flat-rate  season  ticket 
is  valid  across  the  Austrian  regions 
that 
is 
expected 
travel  costs  and 
reduce 
incentivise  the  use  of  public  transport.  Moreover, 
the  Renewable  Heating  Law  will  create  the 
framework conditions for replacing outdated fossil 
fuelled heating systems with renewable energy or 
district  heating,  including  through  a  common 
platform,  in  cooperation  with  the  Länder  and  civil 
society organisations. The Renewable Heating Law 
will  also  coordinate  accompanying  measures  to 
fight  energy  poverty,  including  through  funding 
and 
low-income 
services 
households.  Austria’s  allocation  under  the  Just 
Transition Fund (EUR 135.8 million; current prices) 
will  also  help  mitigate  the  social  impact  of  the 
transition in the most affected regions. In addition, 
the  European  Social  Fund  Plus  (ESF+)  is  expected 
to  support  the  green  transition  (e.g.  the  circular 

consultancy 

for 

economy)  through  individual  projects,  and  will 
support the development of digital skills. Austria’s 
national  energy  and  climate  plan  (NECP)  of 
18 December  2019  proposes  an  ad  hoc  definition 
of  energy  poverty,  reporting  on  the  number  of 
energy poor households identified. It analyses the 
interplay  between  energy  poverty,  skills  and 
income  distribution.  The  NECP  also  develops  an 
approach for addressing energy poverty, including 
a number of support measures. However, the NECP 
does not set a specific target for reducing energy 
poverty (45).  

key 

energy-intensive 

The  carbon  footprint  of  Austria’s  economy 
has  slightly  decreased  in  recent  years  and 
sectors 
although 
is 
remain  sizeable,  the  green  economy 
relatively  large  and  provides  potential  for 
job  creation.  The  intensity  of  greenhouse  gas 
(GHG) emissions in the Austrian economy (relative 
to  gross  value  added)  decreased  slightly between 
2015  and  2020  and  stands  30%  below  the  EU 
average,  with  the  average  carbon  footprint  per 
worker  at  11.99  tons  of  GHG  emissions  (13.61 in 
the EU) (see Graph A6.1). No declining sectors (i.e. 
sectors  that  will  have  to  be  phased  out)  in  the 
context  of 
transition  have  been 
identified (46).  However,  ‘transforming  industries’ 
(such  as  Austria’s  energy-intensive 
industry), 
including the production of metals, chemicals and 
paper (47),  provide  jobs  for  3%  of  the  total 
employed  workforce.  Thus,  upskilling-  and 
reskilling  will  be  important  for  workers  in  these 
industries  (see  Annex  12).  The  environmental 
goods and services sector already provides jobs to 
a  comparatively  large  share  of  the  employed 
population (4% versus 2.1% in the EU) (48). Austria 
also  has  considerable  wind  and  solar  energy 
potential,  while  energy  efficiency  improvements 

the  green 

(45)  SWD(2020) 919 final: Assessment of the final national 

energy and climate plan of Austria 

(46)  SWD(2021) 275 final: on the territorial just transition plans  

(47)  2020 European Semester: Overview of Investment Guidance 
on the Just Transition Fund 2021-2027 per Member State 
(Annex D) 

(48)  There is currently no common EU-wide definition of green 
jobs. The environmental goods and services sector (EGSS) 
accounts only report on an economic sector that generates 
environmental products, i.e. goods and services produced for 
environmental protection or resource management. 

32 

0.000.200.400.600.801.001.20GHG tonnes per Euroof gross added value(MS/EU)GHG tonnes perworker (MS/EU)Employment share inenergy-intensiveindustries (MS/EU)Share of populationin rural areas at riskof poverty (MS/EU)Energy poverty(MS/EU)Carbon inequality(MS/EU)AustriaEU 2020Austria 2015 
 
     
                                                 
 
offer  further  opportunities  for  creating  green 
jobs (49). 

Graph A6.2: Energy poverty by income decile 

2020 (2.24% in the EU). The labour tax wedge for 
low-income  earners (52)  decreased  from  40.5%  to 
38.6%  from  2015  to  2019  (with  a  further 
decrease of 1.4 ppt by 2021), compared to 31.9% 
in  the  EU  in  2021  (see  Annex  17).  As  part  of  the 
eco-social  tax  reform  Austria  adopted  a  regional 
climate  bonus  in  October  2021  in  the  form  of  a 
yearly  benefit  (up  to  EUR  200  per  person, 
residence) (53). 
their  place  of 
depending  on 
Furthermore,  the  Austrian  Parliament  adopted  a 
‘clean  heating  offensive’  in  2021  with  some 
funding  earmarked  for  low-income  households. 
The  clean  heating  offensive  seeks  to  promote  (i) 
the shift away from oil and gas; (ii) the exchange 
of  oil  and  gas  boilers  and 
thermal 
regeneration. 

(iii) 

HH050: Ability to keep home adequately warm; 
HY020: Total disposable household income 
Source: Eurostat 

On  the  social  dimension  of  the  green 
transition,  ensuring  access  to  essential 
transport and energy services appears to be 
less  of  an  overall  challenge  in  Austria 
compared to other Member States. A relatively 
low  but  stable  share  of  the  population  in  rural 
areas lives at risk of poverty (9.2% versus 18.7% 
in the EU) (50). The share of the population unable 
to  keep  their  homes  adequately  warm  decreased 
from  2.6%  in  2015  to  1.5%  in  2020,  which  is 
below  the  EU  average  (8.2%).  Lower-income 
groups are particularly affected by energy poverty 
(see  Graph  A6.2).  Consumption  patterns  vary 
across 
the  average  carbon 
footprint  of  the  top  10%  of  emitters  in  the 
population is about 6 times higher than that of the 
bottom 50% of the population (the EU average is 
5.3 times higher). 

the  population: 

Tax  systems  are  key  to  ensuring  a  fair 
transition  towards  climate  neutrality (51). 
Austria’s total revenues from environmental taxes 
decreased slightly from 2.38% of GDP in 2015 to 
2.28%  in  2019,  and  declined  further  to  2.1%  in 

(49)

https://publications.jrc.ec.europa.eu/repository/handle/J

RC126047 

(50)  Based on COM (2021) 568 final (Annex I) as a proxy for 

potential transport challenges in the context of the green 
transition (e.g. due to vulnerability to fuel prices). 

(51)  COM(2021) 801 final: Council Recommendation on ensuring 

(52)  Tax wedge for a single earner at 50% of the national 
average wage (Tax and benefits database, European 
Commission/OECD). 

a fair transition towards climate neutrality 

(53)  Bundesgesetzblatt I Nr. 11/2022: Klimabonusgesetz. 

33 

0%5%10%15%20%25%12345678910Unable to keep home adequately warm (per income decile)Income decileAustriaEuropean Union 
     
                                                 
 
 
                                                 
PRODUCTIVITY 
PRODUCTIVITY 
ANNEX 7: RESOURCE EFFICIENCY AND PRODUCTIVITY 
ANNEX 7: RESOURCE EFFICIENCY AND PRODUCTIVITY 

Moreover, 
the  amount  of  municipal  waste 
produced  per  person  has  moderately  increased  in 
recent years.  

industrial 

solutions, 

leading  position 

Further  measures  can  help  Austria  maintain 
its 
in  environmental 
technology.  This  includes  sustainable  product 
design,  resource  efficient  production  processes, 
digital 
symbiosis, 
remanufacturing 
in  key  value  chains,  and 
alternatives  to  unsustainable  extraction  of  raw 
materials, and new circular business models. There 
is  also  scope  to  shift  reusable  and  recyclable 
waste  away  from  incineration,  including  through 
economic  instruments,  to  ensure  that  the  post-
2020  recycling  targets,  in  particular  on  plastics, 
are met.  

while 

minimising 

The  efficient  use  of  resources  is  key  to 
ensuring  competitiveness  and open strategic 
autonomy, 
the 
environmental  impact.  The  green  transition 
presents  a  major  opportunity  for  European 
industry 
clean 
creating  markets 
technologies  and  products.  It  will  have  an  impact 
across  the  entire  value  chains  in  sectors  such  as 
energy and transport, construction and renovation, 
food  and  electronics,  helping  create  sustainable, 
local and well-paid jobs across Europe.  

for 

by 

Austria  has  made  some  progress  in  circular 
secondary-material  usage  over  the  past 
decade. Austria managed to reduce its gap to the 
EU  average,  but  it  is  still  far  behind  the  EU’s  top 
performers. The Austrian RRP includes investments 
and reforms supporting recycling, reuse, repair and 
better  waste  management.  A  new  take-back 
system in the retail sector will be combined with a 
new  legal  framework  for  single-use  plastic  and 
metal  beverage  packaging.  The  modernisation 
investment in plastic waste sorting facilities will be 
underpinned  by  a  reform  of  the  law  on  waste 
management. 

Austria’s resource productivity is in line with 
the EU average. Resource productivity expresses 
how  efficiently 
the  economy  uses  material 
resources  to  produce  wealth.  Improving  resource 
productivity can help to minimise negative impacts 
on  the  environment  and  reduce  dependence  on 
volatile 
Resource 
raw  material  markets. 
productivity  in  Austria  has  remained  more  or  less 
stable at around the EU average in recent years. 

Austria’s  economic  growth 
is  not  yet 
decoupled  from  the  generation  of  waste. 
Austria’s  municipal  waste  recycling  rate  is  around 
58%,  well  above  the  EU  average  of  around  48%, 
and above the 2020 and 2025 EU targets of 50% 
and  55%  respectively.  This  comparatively  high 
score  illustrates  the  advanced  level  of  waste 
management 
in  Austria.  However,  Austria 
produced  the  eighth  highest  amount  in  kg  of 
municipal waste (54) per person in the EU in 2020. 

(54)  Municipal waste consists of waste collected by or on behalf 
of  municipal  authorities,  or  directly  by  the  private  sector 
(business  or  private  non-profit  institutions)  not  on  behalf  of 
municipalities. 

34 

 
 
 
                                                 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Graph A7.1: Economic importance and expansion of the circular economy: 
Employment and value added in the Circular Economy sectors 

Source:  

Table A7.1: Selected resource efficiency indicators 

Source: Eurostat 

35 

1.50%1.49%1.51%1.44%1.03%1.04%1.12%0.98%1.72%1.73%1.75%1.71%0.94%0.94%0.96%0.97%0.0%0.2%0.4%0.6%0.8%1.0%1.2%1.4%1.6%1.8%2.0%2015201620172018Persons employed in the circular economy, AT (% of total employment)Value added at factor cost, AT (% of GDP )Persons employed in the circular economy, EU27 (% of total employment)Value added at factor cost, EU27 (% of GDP )SUB-POLICY AREA201520162017201820192020EU27 CircularityResource Productivity (Purchasing power standard (PPS) per kilogram)1.91.92.02.02.11.92.22020Material Intensity (kg/EUR)0.50.50.50.50.50.50.42020Circular Material Use Rate (%)10.711.211.411.111.512.012.82020Material footprint (Tones/capita)24.425.425.124.524.4-14.62019Waste Waste generation (kg/capita, total waste)-7,008-7,428--5,2342018Landfilling (% of total waste treated)-45.9-45.6--38.52018Recycling rate (% of municipal waste)56.957.657.757.758.2-47.82020Hazardous waste (% of municipal waste)-2.1-2.0--4.32018CompetitivenessGross value added in environmental goods and services sector (% of GDP)3.63.74.34.34.2-2.322019Private investment in circular economy (% of GDP)0.10.10.10.1--0.122018Key indicators - AustriaLatest year EU 27 
 
 
  
 
  
 
Austria’s  performance  in  the  integration  of 
digital  technology  is  mixed.  The  percentage  of 
SMEs with at least a basic level of digital intensity 
is above the EU average (64% compared to 55%). 
However,  one  main  challenge  is  that  Austrian 
companies are not yet taking full advantage of the 
use  of  all  the  digital  technologies  that  are 
available.  For  example,  the  use  of  artificial 
intelligence  among  Austrian  companies  is  above 
the EU average, but the use of cloud services and 
big data is well below the EU average. 

Digital  public  services  is  the  DESI  dimension 
in which Austria performs in line with the EU 
average.  The  country  has  traditionally  been  a 
frontrunner  in  e-government  services.  It  scores 
slightly  above  the  EU  average  in  providing  digital 
public services for the public and slightly below in 
providing digital public services to businesses. 

ANNEX 8: DIGITAL TRANSITION 
ANNEX 8: DIGITAL TRANSITION 

The Digital Economy and Society Index (DESI) 
monitors EU Member States’ digital progress. 
The Digital Decade comprises four cardinal points: 
human  capital,  connectivity,  integration  of  digital 
technology  and  digital  public  services (55).  This 
Annex describes Austria’s DESI performance. 

Digitalisation  plays  an  important  role  in  the 
Austrian  RRP,  which  has  one  of  the  highest 
shares  of  its  allocation  dedicated  to  the 
digital  transformation  of  any  EU  country 
(53%) (56).  Austria’s  RRP  invests  in  a  wide  range 
of  digital  areas,  especially  in  connectivity  and 
human  capital,  with  a  focus  on  digitalisation  in 
education  and  the  upskilling  and  reskilling  of 
vulnerable groups. 

in 

The  lack  of  information  and  communication 
technology 
is  a  key 
(ICT)  specialists 
challenge  for  Austria  in  the  DESI  dimension 
on human capital. The country scores well above 
the  EU  average 
the  percentage  of  the 
population with at least basic digital skills, and the 
percentage  of  ICT  specialists  is  at  EU  average. 
Nevertheless,  the  lack  of  ICT  specialists  is  a  key 
challenge: the share of enterprises reporting hard-
to-fill  vacancies  for  jobs  requiring  ICT  specialist 
skills  is  well  above  the  EU  average  (74.3% 
compared to 55.4%) (57).  

it  still 

the  EU  average 

Austria  has  a  mixed  performance  in  digital 
connectivity.  The  country  scores  above  the  EU 
average  in  5G  coverage  (77%  versus  the  EU 
ranks 
average  of  66%).  However, 
considerably  below 
the 
percentage  of  households  with  access  to  fixed 
very  high-capacity  network  coverage  including 
fibre to the premises (45% versus 70% in the EU). 
Recent  significant  improvements  were  due  to  the 
one-off  effect  of  upgrading  already  existing 
networks mostly in urban areas. However, Austria’s 
RRP  has  ambitious  measures 
improve 
to 
connectivity with a focus on rural areas. 

in 

(55)  2030  Digital  Compass:  the  European  Way  for  the  Digital 

Decade Communication, COM (2021) 118 final. 

(56)  The  share  of  financial  allocation  contributing  to  digital 
objectives  has  been  calculated  using  Annex  VII  of  the  RRF 
Regulation. 

(57)  Source: Eurostat – European Union Survey on ICT Usage and 

eCommerce in Enterprises. 

36 

 
 
                                                 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table A8.1: Key Digital Economy and Society Index Indicators 

* The 5G coverage indicator does not measure users’ experience, which may be affected by a variety of factors such as the type 
of device used, environmental conditions, number of concurrent users and network capacity. 5G coverage refers to the percentage 
of populated areas as reported by operators and national regulatory authorities. 
Source: Digital Economy and Society Index 

37 

EUEU top-performanceHuman capitalDESI 2020DESI 2021DESI 2022DESI 2022DESI 2022At least basic digital skillsNANA63%54%79%% individuals202120212021ICT specialists4.3%4.5%4.5%4.5%8.0%% individuals in employment aged 15-7420192020202120212021Female ICT specialists20%20%19%19%28%% ICT specialists20192020202120212021ConnectivityFixed Very High Capacity Network (VHCN) coverage14%39%45%70%100%% households201920202021202120215G coverage*NA50%77%66%99.7%% populated areas2020202120212021Integration of digital technologySMEs with at least a basic level of digital intensityNANA64%55%86%% SMEs202120212021Big data6%9%9%14%31%% enterprises20182020202020202020CloudNANA29%34%69%% enterprises202120212021Artificial IntelligenceNANA9%8%24%% enterprises202120212021Digital public servicesDigital public services for citizensNANA7675100Score (0 to 100)202120212021Digital public services for businessesNANA8182100Score (0 to 100)202120212021Austria 
 
 
  
 
ANNEX 9: INNOVATION 
ANNEX 9: INNOVATION 

This  Annex  provides  a  general  overview  of 
the  performance  of  Austria’s  research  and 
innovation (R&I) system.  

Austria  is  among  Europe’s  strong  innovators 
according  to  the  2021  edition  of  the 
European Innovation Scoreboard (see note in 
table), but it struggles to reduce its gap with 
the  EU’s  innovation  leaders.  R&D  intensity  in 
Austria  has  surpassed  3%  of  GDP  since  2014, 
reaching 3.2% of GDP in 2020.  

Over  the  last  decade,  R&D  investments  in 
Austria continued to increase, thanks mainly 
to  the  private  sector.  Business  expenditure  on 
R&D (BERD) is one of the highest in the EU (2.22% 
of  GDP  in  2020,  well  above  the  EU  average  of 
1.53%),  rising  faster  than  public  expenditure.  The 
government  supports  BERD  mainly  through  tax 
incentives,  and 
the  country’s  R&D  premium 
increased  from  3%  in  2002  to  14%  in  2018. 
Austria  is  one  of  the  most  generous  countries  in 
supporting business R&D as a percentage of GDP, 

equivalent to 0.29% of GDP in 2019. 

the 

significant 

translating 

However,  there  is  room  to  improve  the 
overall  effectiveness  of  the  R&I  system  by 
R&D 
better 
investments into innovation outcomes. Austria 
is lagging behind in terms of employment in fast-
top  50%  most 
in 
growing  enterprises 
innovative  sectors 
(3.3%  of  Austrians  were 
employed in this top 50% in 2019 against the EU 
average  of  5.5%).  Linked  to  this  is  the  relatively 
low availability of equity funding, including venture 
capital, for innovative start-ups and scale-ups. The 
RRP  includes  as  one  of  its  main  reforms  a  new 
2030  Research  Technology  and 
Innovation 
Strategy. This strategy is aimed at addressing the 
weaknesses  of  the  Austrian  R&I  system 
in 
translating its R&D efforts into stronger innovation 
outcomes. 

Table A9.1: Key research, development and innovation indicators 

(1) 2021 European Innovation Scoreboard, Country profile: Austria https://ec.europa.eu/docsroom/documents/45904. 
Source: Source: DG Research and Innovation - Common R&I Strategy and Foresight Service - Chief Economist Unit 
Data: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical database), Invest Europe 

38 

CompoundEUannual growthaverage2010-20R&D Intensity (GERD as % of GDP)2.733.053.093.133.201.62.32Public expenditure on R&D as % of GDP0.850.860.910.910.961.30.78Business enterprise expenditure on R&D (BERD) as % of GDP1.872.182.162.202.221.81.53Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 10.910.810.7::-0.39.9PCT patent applications per billion GDP (in PPS)4.84.94.7::-0.3 3.5Public-private scientific co-publications as % of total publications13.914.315.115.614.80.69.05New graduates in science & engineering per thousand pop. aged 25-3415.518.318.718.9:0.216.3Total public sector support for BERD as % of GDP:0.288:0.293:2.90.196R&D tax incentives: foregone revenues as % of GDP0.1110.1460.1850.191:6.20.100Share of environment-related patents in total patent applications filed under PCT (%) 17.113.2 14.0 : :-2.512.8 Venture Capital (market statistics) as % of GDP0.0200.0230.0230.0240.0231.30.054Employment in fast-growing enterprises in 50% most innovative sectors2.91.93.03.31.65.5Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation Finance for innovation and Economic renewalKey indicators Austria20102015201820192020 
 
 
 
 
 
  
 
ANNEX 10: INDUSTRY AND SINGLE MARKET 
ANNEX 10: INDUSTRY AND SINGLE MARKET 

prosperity,  well-being 

Productivity  growth  is  a  critical  driver  of 
economic 
and 
convergence over the long run. A major source 
of  productivity  for  the  EU  economy  is  a  well-
functioning single market, where fair and effective 
competition  and  a  business-friendly  environment 
in  which  small  and  medium 
are  ensured, 
enterprises  (SMEs)  can  operate  and  innovate 
without  difficulty.  Businesses  and  industry  rely 
heavily  on  robust  supply  chains  and  are  facing 
bottlenecks that bear a negative impact on firms’ 
productivity 
levels,  employment,  turnover  and 
entry/exit  rates.  This  may  impact  the  Member 
States’  capacity  to  deliver  on  Europe’s  green  and 
digital transformation. 

is 

for 

there 

is  some  scope 

favourable  and  barriers 

The Austrian economy is well integrated into 
the  single  market.  Although 
the  business 
to 
environment 
investment  in  the  country  are  relatively  modest 
overall, 
further 
improvement.  The  high  administrative  burden  in 
Austria  discourages  investment  by  SMEs  in  the 
regulatory 
services 
restrictiveness 
certain 
for 
professional 
such  as  accounting, 
architecture,  engineering,  real  estate  services  and 
retail.  This  restrictiveness  represents  an  effective 
entry  barrier.  As  a  result,  Austria’s  productivity 
growth in services has been one of the weakest in 
the  EU  and  below  peer  countries  over  the  past 
includes  several 
decade.  The  Austrian  RRP 

addition, 
high 

services, 

remains 

sector. 

In 

measures  to  improve  the  business  environment 
and  address  certain  regulatory  barriers.  For 
example,  it  will implement  the  ‘once-only’  reform, 
whereby  businesses  will  only  have  to  report 
certain data once rather than report the same data 
several times to different regulatory departments. 
This  will  reduce  bureaucracy  for  businesses  and 
compliance  costs  caused  by 
IT 
systems.  Furthermore, the  plan  contains  a  reform 
introducing  a  new  legal  status  for  companies  to 
support  growth-oriented  start-ups  and  innovative 
SMEs.  This  new  status  will  make  it  possible  to 
investors  and 
flexibly  allocate 
employees to attract skilled workers. 

incompatible 

shares 

to 

loan 

supported 

guarantees) 

Liquidity support to businesses (tax deferrals 
the 
and 
resilience  and  recovery  of  the  economy  and 
limited  job  losses  and  bankruptcies  during 
the COVID-19 pandemic. Helped by this support, 
the  level  of  economic  activity  in  Austria  had 
already  surpassed  its  pre-pandemic  levels  in  the 
summer of 2021. However, the small and volatile 
market  for  equity  capital  (notably  risk  capital)  is 
still  a  bottleneck  to  the  scaling  up  of  innovative, 
growth-oriented  firms.  In  2020,  total  venture 
capital  investments  represented  just  0.03%  of 
Austrian  GDP,  below  peer  countries  and  the  EU 
average.  

The  competitiveness  of  public  procurement 
deteriorated in recent years, according to the 
Single  Market  Scoreboard.  Although 
the 
in  public  procurement 
participation  of  SMEs 

Table A10.1: Key Single Market and Industry Indicators - part 1(1 of 2) 

Source: See above in the table the respective source for each indicator in the column “description”. 

39 

SUB-POLICY AREAINDICATOR NAMEDESCRIPTION20212020201920182017Growth ratesEU27 average*Value added by source (domestic)VA that depends on domestic intermediate inputs, % [source: OECD (TiVA), 2018]65.0562.6%Value added by source (EU)VA imported from the rest of the EU, % [source: OECD (TiVA), 2018]21.1819.7%Value added by source (extra-EU)% VA imported from the rest of the world, % [source: OECD (TiVA), 2018]13.817.6%Cost competitivenessProducer energy price (industry)Index (2015=100) [source: Eurostat, sts_inppd_a]10994.599.910196.213.3%127.3Material Shortage using survey dataAverage (across sectors) of firms facing constraints, % [source: ECFIN CBS]24610128200%26%Labour Shortage using survey dataAverage (across sectors) of firms facing constraints, % [source: ECFIN CBS]12614151020%14%Sectoral producer pricesAverage (across sectors), 2021 compared to 2020 and 2019, index [source:Eurostat]3.5%5.4%Concentration in selected raw materialsImport concentration a basket of critical raw materials, index [source: COMEXT]0.170.160.20.230.25-32%17%Installed renewables electricity capacity Share of renewable electricity to total capacity, % [source:Eurostat, nrg_inf_epc]80.8080.6078.1077.205%47.8%Net Private investmentsChange in private capital stock, net of depreciation, % GDP [source: Ameco]4.76.15.65.1-7.8%2.6%Net Public investmentsChange in public capital stock, net of depreciation, % GDP [source: Ameco]0.60.60.50.60%0.4%Investment dynamicsHEADLINE INDICATORSEconomic structureRESILIENCEShortages/supply chain disruptionsStrategic dependencies 
 
 
 
 
  
 
Table A10.2: Key Single Market and Industry Indicators - part 2(2 of 2) 

Source: See above in the table the respective source for each indicator in the column “description”. 

procedures  is  increasing  (both  contractors  and 
bids),  Austria  nonetheless  scores  below  the  EU 
average  in  some  important  indicators  such  as:  (i) 
the  proportion  of  contracts  awarded  to  a  single 
bidder;  (ii)  the  percentage  of  procedures  without 
any  call  for  bids;  and  (iii)  the  publication  rate. 
Furthermore,  the  capacity  of  the  Austrian  public 
administration  to  apply  EU  rules  on  the  single 
market  could  be  improved  by  strengthening  the 
staffing of national SOLVIT centres, which provide 
solutions related to problems in applying EU rights. 

Global  supply-chain  disruptions,  bottlenecks, 
and rising raw material and transport prices 
have  affected  Austrian  enterprises.  This  is 
especially  problematic  given  their  prominent  role 
as  suppliers  in  the  automotive  industry.  A  recent 
report  published  by  the  Central  Bank  of  Austria 
(OeNB) estimates that supply bottlenecks caused a 
shortfall of around 0.3-0.4 pps of GDP in 2021. 

40 

Single Market integrationIntra-EU tradeRatio of Intra-EU trade to Extra-EU trade, index [source: Ameco]2.912.682.582.612.5912%1.59Professional services restrictivenessRegulatory restrictiveness indicatorRestrictiveness of access to and exercise of regulated professions (professions with above median restrictiveness, out of the 7 professions analysed in SWD (2021)185 [source: SWD (2021)185; SWD(2016)436 final])5   50%3.37Professional qualifications recognitionRecognition decisions w/o compensationProfessionals qualified in another EU MS applying to host MS, % over total decisions taken by host MS [source: Regulated professions database]38.745%Transposition - overall5 sub-indicators, sum of scores [source: Single Market Scoreboard]Below averageAboveBelowOn averageInfringements - overall4 sub-indicators, sum of scores [source: Single Market Scoreboard]Below averageBelow averageOn averageOn averageInvestment protectionConfidence in investment protectionCompanies confident that their investment is protected by the law and courts of MS if something goes wrong, % of all firms surveyed [source: Flash Eurobarometer 504]0.7356%BankruptciesIndex (2015=100) [source: Eurostat, sts_rb_a]n.a.n.a.n.a.n.a.n.a.n.a.70.1Business registrationsIndex (2015=100) [source: Eurostat, sts_rb_a]n.a.n.a.n.a.n.a.n.a.n.a.105.6Late paymentsShare of SMEs experiencing late payments in past 6 months, % [source: SAFE]30.430.438.2n.a.n.a.-21%45%EIF Access to finance index - LoanComposite: SME external financing over last 6 months, index from 0 to 1 (the higher the better) [source: EIF SME Access to Finance Index]0.80.810.810.782.6%0.56EIF Access to finance index - EquityComposite: VC/GDP, IPO/GDP, SMEs using equity, index from 0 to 1 (the higher the better) [source: EIF SME Access to Finance Index]0.080.150.080.41-79.7%0.18% of rejected or refused loansSMEs whose bank loans’ applications were refused or rejected, % [source: SAFE]1.45.12.41.54.9-71.7%12.4%SME contractorsContractors which are SMEs, % of total [source: Single Market Scoreboard]5450404228.6%63%SME bidsBids from SMEs, % of total [source: Single Market Scoreboard]747060697%70.8%(*) latest availableBusiness demographyAccess to financeBUSINESS ENVIRONMENT - SMEsPublic procurement SINGLE MARKETCompliance - cooperation EC and MS 
 
 
  
 
system  is  good.  Digital  tools  are  broadly  used  in 
courts.  As  for  judicial  independence,  no  systemic 
deficiencies have been reported (59).  

Graph A11.1: Performance on the single market 
public procurement indicator 

Notes: The competition and transparency indicators are triple-
weighted, whereas the efficiency and quality indicators have 
unitary weights. All others receive a 1/3 weighting in the SMS 
composite indicator. 
Source: Single market scoreboard 2020 data 

in 

civil 

selected 

Performance 
service 
indicators  is  relatively  good.  The  participation 
of Austrian public sector workers in adult learning 
(19.8% in 2021) is above the EU average (18.6 in 
2021).  Gaps  in  analytical  capabilities,  however, 
continue  to  pose  challenges  to  the  quality  of 
policies (60). The share of civil servants aged 55+ is 
at the EU average. Moreover, Austria has improved 
gender  parity  in  senior  civil  service  management 
positions since 2017.  

ANNEX 11: PUBLIC ADMINISTRATION 
ANNEX 11: PUBLIC ADMINISTRATION 

capacity 

administrative 

Good 
enables 
economic  prosperity,  social  progress  and 
fairness. Public administrations at all government 
levels deliver crisis response, ensure the provision 
of  public  services  and  contribute  to  building 
resilience  for  the  sustainable  development  of  the 
EU economy.  

Overall,  Austria’s  public  administration  is 
among the most effective in the EU27 (58). The 
regulatory  system 
is  well-developed.  Austria’s 
evidence-based policy making indicators are above 
the  EU  average  (1.9  versus.  1.7  for  the  EU). 
Government  decisions  and  ex-ante  and  ex-post 
evaluations  of  legislation  are  publicly  available. 
Recent 
improving  public 
consultations  by  allowing  public  input  to  all 
legislative  proposals 
the  entire 
legislative process. However, weak inter-ministerial 
coordination  and  the  fragmented  allocation  of 
of 
responsibilities 
government  prevents  further  improvements  of 
government effectiveness. 

reforms  aimed  at 

throughout 

different 

across 

levels 

Austria’s  performance  in  the  Single  Market 
Scoreboard’s  public  procurement  indicator 
has  deteriorated  steadily  over  the  past  few 
years. Data for 2020 show the country ranking at 
the  bottom  of the  EU  ranking,  due  to  poor  scores 
in  measures  of  transparency  and  competition, 
quality of information as well as the participation 
of SMEs in procurement processes (Table A11.1).  

internet  for 

Austria has advanced in the digitalisation of 
its  public  administration  and  the  delivery  of 
digital services. In 2021, 79% of Austrians used 
the 
interacting  with  the  public 
authorities versus 71% on average in the EU. The 
reforms  and 
RRP  sets  out 
to 
federal 
the  digitalisation  of 
accelerate 
administration  and  support  Austria’s  digital 
transition.  These  are  expected  to  reduce  the 
administrative  burden  for  companies  and  to 
increase  the  efficiency  and  citizen-orientation  of 
services.  

investments 
the 

The  justice  system  performs  efficiently.  The 
duration of administrative cases in Austria remains 
relatively lengthy (388 days in the first instance in 
2020),  but  the  clearance  rate  in  this  area  has 
improved visibly. The overall quality of the justice 

(59)  For  more  detailed  analysis  of  the  performance  of  the  justice 
system in Austria, see the EU Justice Scoreboard and the 2022 
country-specific chapter for Austria  of the Rule of Law Report 
(forthcoming).  

(60)  OECD,  Regulatory 

Impact  Assessment  and  Regulatory 

(58)  Worldwide Governance Indicators, 2020.  

Oversight in Austria, 2020, Paris 

41 

 
 
                                                 
 
                                                 
 
Table A11.1: Public administration indicators – Austria 

Source: Source: ICT use survey, Eurostat (# 1); E-government benchmark report (# 2); Open data maturity report (# 3); Fiscal 
Governance Database (# 4, 9, 10); Labour Force Survey, Eurostat (# 5, 6, 8), European Institute for Gender Equality (# 7), Single 
Market Scoreboard public procurement composite indicator (# 11); OECD Indicators of Regulatory Policy and Governance (# 12).  

42 

AT20172018201920202021EU27170.075.079.081.079.070.82nananana76.370.93nananana92.181.1483.683.683.683.6na56.8532.836.938.138.038.955.3619.819.119.514.319.818.6725.424.620.622.019.021.8819.222.522.522.021.421.390.670.670.670.67na0.72101.41.41.41.4na1.511-0.7-1.0-3.3-6.3na-0.7121.89nana1.86na1.7Index of regulatory policy and governance practices in the areas of stakeholder engagement, Regulatory Impact Assessment (RIA) and ex post evaluation of legislation Educational attainment level, adult learning, gender parity and ageingOpen government and independent fiscal institutionsParticipation rate of public administration employees in adult learning (3)Gender parity in senior civil service positions (4)Share of public sector workers between 55 and 74 years (3)(1) High values stand for good performance barring indicators # 7 and 8.(2) Measures the user centricity (including for cross-border services) and transparency of digital public services as well as the existence of key enablers for the provision of those services.(3) Break in the series in 2021.(4) Defined as the absolute value of the difference between the share of men and women in senior civil service positions. E-government Public Financial Management Evidence-based policy makingIndicator (1)Medium term budgetary framework indexStrength of fiscal rules indexPublic procurement composite indicatorShare of individuals who used internet within the last year to interact with public authorities (%)2021 e-government benchmark´s overall score (2) 2021 open data maturity indexScope Index of Fiscal InstitutionsShare of public administration employees with tertiary education, levels 5-8  (3) 
 
 
 
 
  
 
FAIRNESS 
FAIRNESS 
ANNEX 12: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
ANNEX 12: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  

Table A12.1: Social Scoreboard 

The European Pillar of Social Rights provides 
for  upward  convergence 
the  compass 
towards better working and living conditions 
in the EU. The implementation of its 20 principles 
on  equal  opportunities  and  access  to  the  labour 
market,  fair  working  conditions,  social  protection 
and inclusion, supported by the 2030 EU headline 
targets  on  employment,  skills  and  poverty 
reduction, will strengthen the EU’s drive towards a 
digital,  green  and  fair  transitions.  This  annex 
provides  an  overview  of  Austria’s  progress  in 
achieving  the  goals  under  the  European  Pillar  of 
Social Rights. 

Although the labour market is recovering, the 
labour  market  potential  of  women,  the  low-
skilled,  older  workers,  and  people  with  a 
migrant  background  remains  underused.  The 
employment rate of women in Austria stood above 
the  EU  average  in  2021  (71.3%  versus  67.7%). 
However,  Austria  had  one  of  the  highest  rates  of 
female part-time workers in the EU, with 49.9% of 
Austrian women in employment working part-time 
in  2021  (against  an  EU  average  of  28.3%). 
Moreover,  the  gender  pay  gap  in  Austria  remains 
one of the highest in the EU (18.9% versus 13.0% 
in  2020).  Participation  in  formal  childcare  of 
children  under  the  age  of  3  decreased  slightly 
(-1.6 pps) to 21.1% in 2020 and is well below the 
EU  average  of  32.3%.  The  Austrian  RRP  has 
committed funding to increasing the availability of 
early childhood education and care facilities, which 
should also benefit the labour market participation 
of women. The employment rate of older workers 
(aged  55-64)  was  55.2%  in  2021,  still  below  the 
EU  average  of  60.5%.  The 
labour  market 
participation of people with a migrant background 
also remains low, with an employment gap of 12.7 
pps  in  2020  between  non-EU-born  and  Austrian-
born  residents.  Also,  the  employment  rate  of 
residents 
recent  migrants 
established  in  Austria  for  less  than  5  years) 
increased from 47.7% in 2020 to 50.8% in 2021. 
The  ‘Promoting  reskilling and  upskilling’ measures 
of  the  RRP  will  address  these  challenges  by 
supporting  training  for  the  low-skilled  and  the 
long-term  unemployed.  The  EU  cohesion  policy 
funds  will  also  support  upskilling  and  reskilling 
measures. 
bring 
unemployed  people  into  the  workforce  and  help 
Austria  contribute  to  achieving  the  EU  headline 
target on employment and skills by 2030.  

These  measures 

(i.e.  non-EU-born 

should 

Note: Update of 29 April 2022. Members States are classified 
on the Social Scoreboard according to a statistical 
methodology agreed with the EMCO and SPC Committees. It 
looks jointly at levels and changes of the indicators in 
comparison with the respective EU averages and classifies 
Member States in seven categories. For methodological 
details, please consult the Joint Employment Report 2022. 
Due to changes in the definition of the individuals' level of 
digital skills in 2021, exceptionally only levels are used in the 
assessment of this indicator; NEET: neither in employment nor 
in education and training; GDHI: gross disposable household 
income. 
Source: European Commission 

Having  a  disadvantaged  socioeconomic  or 
migrant  background  damages  education  and 
labour market outcomes. Rates of early leaving 
from  education  and  training  by  people  with  a 
migrant  background  in  Austria  has  substantially 
worsened  in  recent  years,  and  the  gap  between 
Austrian-born  and  non-EU-born  pupils  on  this 
measure remains significant (5.7% versus 24.0%). 
This  impacts  educational  outcomes  and  labour 
market  participation  for  these  groups,  particularly 
given  the  ongoing  green  and  digital  transitions 
(see  also  Annex  13).  The share  of  Austrian  adults 
(aged  25-64)  participating  in  learning  over  the 
past  4  weeks  is  above  the  EU  average  (14.6% 

43 

8.063.09.48.64.1175.66.2297.1116.721.941.120.56.321.10.1Critical situationTo watchWeak but improvingGood but to monitorOn averageSelf-reported unmet need for medical care (% of population 16+) (2020)Disability employment gap (ratio) (2020)Housing cost overburden (% of population) (2020)Equal opportunities and access to the labour marketDynamic labour markets and fair working conditionsSocial protection and inclusionIndividuals' level of digital skills (% of population 16-74) (2021) Social Scoreboard for AUSTRIABest performersBetter than averageEarly leavers from education and training(% of population aged 18-24) (2021)Youth NEET(% of total population aged 15-29) (2021)Gender employment gap (percentage points) (2021)Income quintile ratio (S80/S20) (2020) At risk of poverty or social exclusion (in %) (2020)Employment rate(% population aged 20-64) (2021)Unemployment rate(% population aged 15-74) (2021)Long term unemployment(% population aged 15-74) (2021)GDHI per capita growth (2008=100) (2020)At risk of poverty or social exclusion for children (in %) (2020)Impact of social transfers (other than pensions) on poverty reduction (% reduction of AROP) (2020)Children aged less than 3 years in formal childcare (% of under 3-years-olds) (2020) 
 
 
 
  
 
 
 
versus 10.8.% in 2021). The share of the Austrian 
population with at least basic digital skills, at 63%, 
is  well  above 
the  EU  average  of  54%. 
Nevertheless,  in  2020,  74.3%  of  enterprises  in 
Austria  that  recruited  or  tried  to  recruit personnel 
reported  that  vacancies  for  jobs  requiring  ICT 
specialist skills were hard to fill. However, there is 
scope  for  further  strengthening  the  level  of  basic 
skills  for  disadvantaged  groups,  including  people 
is  also 
with  a  migrant  background.  Austria 
experiencing  continued  skills  shortages,  with  the 
2019  OECD  Economic  Survey  reporting  that  81% 
of  Austrian  companies  of  all  sizes  refrained  from 
investment due to a lack of skilled staff. Measures 
included  in  the  RRP  to  support  upskilling  and 
reskilling  have  the  potential  to  further  support 
Austria’s  contribution  to  reaching  the  2030  EU 
headline targets on skills and employment. 

A  strong  social  protection  system  and 
extensive  policy  measures  have  limited  the 
social impact of the COVID-19 pandemic. The 
share  of  people  at  risk  of  poverty  or  social 
exclusion  increased  slightly  in  Austria  in  2020  to 
16.7%  (up  from  16.5%  in  2019),  but  with  a 
greater  increase  for  children  (21.9%,  up  from 
20.1% 
in  2019).  At  the  same  time,  gross 
disposable  household  income  per  capita  declined 
in 2020 to 97.11 down from 99.32 in 2019, and is 
below the 2008 level (100). Social transfers (other 
than pensions) continue to have a high impact on 
Investments  to 
poverty  reduction 
combat energy poverty are set out under the RRP. 
Also,  the  Austrian  operational  programme  on  the 
European Social  Fund Plus (ESF+), currently under 
negotiations,  is  expected  to  develop  measures  to 
address poverty. The many people with disabilities 
that  are living  in institutions  remains  a  challenge, 
calling  for  an  effective  deinstitutionalisation 
strategy. This deinstitutionalisation strategy should 
include 
fostering 
inclusive  education,  employment  and  independent 
living facilities. 

community-based 

in  Austria. 

services 

44 

 
 
ANNEX 13: EDUCATION AND SKILLS 
ANNEX 13: EDUCATION AND SKILLS 

children. 

This  annex  outlines  the  main  challenges  for 
Austria’s  education  and  training  system  in 
light of the EU-level targets of the European 
Education  Area  strategic  framework  and 
other  contextual  indicators,  based  on  the 
analysis  from  the  2021  Education  and 
Training  Monitor.  Austria’s  education  and 
training  system  struggles  with  equity  challenges 
that  risk  worsening  due  to  the  pandemic.  Austria 
lags  behind  the  EU  average  and  the  EU-level 
in  early  childhood 
targets 
education.  

for  participation 

Participation  in  early  childhood  education 
and  care  (ECEC)  has  slightly  decreased 
recently. This is the case for both over-3-year old 
and  under-3-year  old  children.  (See  Table  A13.1 
and  also  Annex  12.)  The  shortage  of  places  on 
ECEC  and  the  lack  of  a  compulsory  quality 
framework hold back the positive development of 

Socioeconomically 

Austrians’  basic  skills  have  not  improved 
over  time  and  socio-economic  and  migrant 
background  continue  to  affect  education 
outcomes. Between 2015 and 2018, the share of 
underachieving  pupils,  as  measured  for  15-year-
olds by  PISA increased for reading (+1.1 pps) and 
science (+1.1 pps), but decreased for mathematics 
(-0.7  pps),  with  all  values  at  around  the  EU 
average. 
disadvantaged 
students and students with a migrant background 
are  particularly  likely  to  underachieve  on  these 
measures.  The  performance  gap  between  more 
disadvantaged  students  and  more  advantaged 
students  stands  at  around  the  EU  average. 
However, the gap comparing pupils born in Austria 
with those born abroad is larger than in other EU 
countries,  amounting  to  1.5  years  of  schooling. 
Socioeconomically disadvantaged pupils in Austria 
are  academically 
those 
elsewhere in the EU. Learning losses expected due 

resilient 

than 

less 

Table A13.1: EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Source: Eurostat (UOE, LFS); OECD (PISA). Notes: The 2018 EU average on PISA reading performance does not include ES; u = low 
reliability; Data is not yet available for the remaining EU-level targets under the European Education Area strategic framework, 
covering underachievement in digital skills, exposure of vocational educational training graduates to work based learning and 
participation of adults in learning. 

45 

96%88.1%91.9%89.9%201992.8%2019Reading< 15%22.5% 20.4%23.6%201822.5%2018Mathematics< 15%21.8% 22.2%21.1%201822.9%2018Science< 15%20.8% 21.1%21.9%201822.3%2018< 9 %7.3%11.0%8.0%9.7%Men7.8%12.5%9.6%11.4%Women6.8%9.4%6.3% 7.9%Cities9.7%9.6%9.5% 8.7%Rural areas4.2%12.2%5.5%10.0%Native5.5%10.0%5.6%8.5%EU-born12.1%u20.7%21.0% 21.4%Non EU-born24.3%23.4%19.1% 21.6%45%38.6%36.5%42.4%41.2%Men35.8%31.2%38.2%35.7%Women41.5%41.8%46.8%46.8%Cities48.5%46.2%52.5%51.4%Rural areas31.6%26.9%34.1%29.6%Native40.4%37.7%43.0%42.1%EU-born41.4%32.7%48.6%40.7%Non EU-born28.1%27.0%34.5%34.7%43.3% 38.3%43.5%201938.9%2019Low achieving 15-year-olds in:Early leavers from education and training (age 18-24)TotalBy genderBy degree of urbanisationBy country of birthTertiary educational attainment (age 25-34)TotalBy genderBy degree of urbanisationBy country of birthShare of school teachers (ISCED 1-3) who are 50 years or overParticipation in early childhood education (age 3+)IndicatorTargetAustriaEU27AustriaEU27 
 
 
 
 
 
  
 
to  the  pandemic  risk  further  aggravating  the 
situation. Young people with a migrant background 
in  Austria  are  more  likely  to  leave  education  and 
training  prematurely.  Of  young  people  in  Austria 
that  were  born  elsewhere  in  the  EU,  21.0%  leave 
education  early,  while  24.0%  of  young  people  in 
Austria  born  outside  the  EU  leave  education  and 
training  prematurely.  This  compares  to  only  5.6% 
of  Austrian-born  children  who  leave  education 
early.  

Graph A13.1: Early leavers from education and 
training by country of birth, 2020 

Source: European Commission 

for  Austria’s  education 

The  education  system  faces  significant 
challenges.  The  OECD (61)  highlights  significant 
challenges 
system, 
including  in  access  to  early  childhood  education, 
the  level  of  resources  in  focal  schools  –  schools 
with  a  disproportionate  share  of  children  from 
disadvantaged  backgrounds  −  and  the  need  to 
attract and train sufficient staff and teachers. The 
limited number of places in ECEC and the lack of a 
compulsory  quality  framework  hold  back  the 
positive  development  of  children.  Austria 
is 
experiencing growth in its school-aged population, 
and  more  and  more  ‘all  day’-schools  (where 
children are looked after until  6pm)  are being set 
up.  In  addition,  a  high  share  of  teachers  are 
retiring  soon.  All  these  trends  mean  that  Austria 

needs  to  attract  more  applicants  to  teacher 
education. Continued professional development for 
teachers  needs  to  be  made  more  relevant. 
Moreover,  both  initial  and  continued  training  in 
digital  education  needs  to  be  strengthened  after 
the  experiences  of  the  pandemic.  Before  the 
pandemic,  Austrian 
least 
prepared  of  any  teachers  in  the  EU  to  use  ICT  in 
the  classroom (62).  Disadvantaged  schools 
in 
particular  require  adequate  resources  to  improve 
the 
low 
learning  outcomes  of  pupils  with 
socioeconomic or migrant backgrounds. 

teachers 

felt 

the 

Participation  rates  in  higher  education  in 
Austria  are  above  the  EU  average,  but  have 
not yet reached the European Education Area 
(EEA)  target  of  45%.  More  women  than  men 
graduate from university (a difference of 8.4 pps), 
making this gap twice as large as a decade ago. In 
Austrian  cities,  there  are  about  one  third  more 
higher education graduates than in rural areas (as 
a share of population). While the share of tertiary 
attainment  among  25-to-34-year  olds  born 
elsewhere in the EU exceeds the share of tertiary 
attainment  among  Austrians  of  the  same  age 
cohort by 5.6 pps, non EU-born trail 8.5 pps behind 
the  share  of  Austrian  graduates 
(48.6%  of 
graduates  for  those  born  elsewhere  in  the  EU, 
43%  for  those  born in  Austria  and  only  34.5%  of 
graduates  born  outside  the  EU).  The  fact  that 
Austria  has  a  comparatively  high  share  of 
graduates  from  abroad  is  in  contrast  to  the 
average  situation  with  the  EU,  and  indicates  that 
Austria successfully attracts foreign talent to help 
reducing existing skills gaps.  

The reforms and investment measures under 
the RRP will go some way to helping Austria 
address  these  longstanding  challenges.  Key 
support  in  the  RRP  focuses  on  digitalisation  in 
education, increasing places in ECEC, and providing 
for  some  COVID-19 
related  compensational 
support  measures  to  students.  However,  more 
effort  is  needed  to  substantially  address  the 
persisting challenges. 

(61)  OECD  Review  of  School  Resources  Austria,  OECD  School 

Education during COVID-19 Country Note Austria.  

(62)  OECD (2018): TALIS study 

46 

0%5%10%15%20%25%EU27ATNon EU-bornAllNative 
 
  
                                                 
 
                                                 
model  and  a  very  hospital-centric  health  system. 
Austria  spends  substantially  more  than  most 
countries  on  hospital  (inpatient)  care  (1 287  EUR 
PPP per person in 2019, against an EU average of 
1 010 EUR). This phenomenon is partly reflected in 
the high number of hospital beds by EU standards. 
The  number  of  physicians  and  nurses  per  1 000 
people 
is  above  the  EU  average.  However, 
challenges  remain,  in particular  that  of  an  ageing 
physician workforce. 

Graph A14.2: Projected increase in public 
expenditure on healthcare over 2019-2070 (AWG 
reference scenario) 

Source: European Commission/EPC (2021) 

The  RRP  foresees  investments  in  Austrian 
healthcare  of  EUR  254  million. 
This 
corresponds to 5.6% of total RRP spending, which 
is  dedicated  to:  (i)  improving  primary  care;  (ii) 
supporting  the  development  of  an  electronic 
mother-child-pass  platform;  (iii)  rolling  out  “early 
childhood  intervention”  for  pregnant  women,  their 
young  children  and  families  in  stressful  life 
situations; 
(iv)  setting  up  community  nurses 
scheme; and (v) creating an Institute for Precision 
Medicine.  

ANNEX 14: HEALTH AND HEALTH SYSTEMS 
ANNEX 14: HEALTH AND HEALTH SYSTEMS 

Especially  relevant  in  light  of  the  ongoing 
COVID-19 pandemic, resilient healthcare is a 
prerequisite  for  a  sustainable  economy  and 
society.  This  annex  provides  a  snapshot  of  the 
healthcare sector in Austria. 

Life expectancy in Austria is higher than the 
EU  average,  but  fell  by  more  than  8 months 
in  2020  due  to  deaths  from  COVID-19.  As  of 
17  April  2022,  Austria  reported  1.82  cumulative 
COVID-19  deaths  per  1 000  inhabitants  and  462 
confirmed  cumulative  COVID-19  cases  per  1 000 
inhabitants. Deaths from COVID-19 had a negative 
impact  on  life  expectancy,  but,  even  before  the 
pandemic,  the  increase  in  life  expectancy  had 
slowed  down  considerably  between  2010  and 
(mortality 
2019.  Treatable  mortality 
avoidable  through  optimal  quality  healthcare)  are 
lower than the EU average, as are cancer mortality 
rates.  

rates 

Graph A14.1: Life expectancy at birth in years 

Source: Eurostat database 

Austria’s  total  health  expenditure  amounted 
to 10.4% of GDP in 2019, slightly above the 
EU  average  of  9.9%.  Three  quarters  of  total 
health  expenditure  is  publicly  funded,  a  lower 
share  than  in  the  EU  overall.  Direct  out-of-pocket 
spending  as  a  share  of  total  health  expenditures 
by  households  is  higher  than  the  EU  average. 
Public  expenditure  on  health  is  projected  to 
increase by 1.2 pps of GDP by 2070 (compared to 
0.9 pps of GDP for the EU), raising long-term fiscal 
sustainability  concerns  (see  the  Commission’s 
2021 Ageing Report). 

Although 
system 
the  Austrian  health 
generally  provides  good  access  to  high 
quality  care,  some  structural  challenges 
challenges 
persist. 
the 
These 
the  health-service  delivery 
fragmentation  of 

include 

47 

80.580.980.981.81.380.481.381.881.781.882.081.3201520162017201820192020EUAustria6.66.90.91.20246810EUAustria% of GDP20192070increase 
 
  
  
 
Table A14.1: Key health indicators 

(1) Doctors' density data refer to practising doctors in all countries except FI, EL, PT (licensed to practice) and SK (professionally 
active). Nurses' density data refer to practising nurses in all countries (imputation from year 2014 for FI) except IE, FR, PT, SK 
(professionally active) and EL (nurses working in hospitals only). More information: https://ec.europa.eu/health/state-health-
eu/country-health-profiles_en  
Source: Data sources: Eurostat Database; except: * Eurostat Database and OECD, ** ECDC.  

48 

20162017201820192020EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)77.876.275.273.292.1 (2017)Cancer mortality per 100 000 population237.2234.3234.0229.6252.5 (2017)Current expenditure on health, % GDP 10.410.410.310.49.9 (2019)Public share of health expenditure, % of current health expenditure74.074.074.875.279.5 (2018)Spending on prevention, % of current health expenditure 2.12.12.12.12.8 (2018)Acute care beds per 100 000 population558.8548.7538.9531.3387.4 (2019)Doctors per 1 000 population *5.15.25.25.33.8 (2018)Nurses per 1 000 population *6.86.96.910.48.2 (2018)Consumption of antibacterials for systemic use in the community, daily defined dose per 1 000 inhabitants per day **11.411.910.49.27.114.5 (2020) 
 
 
  
 
ANNEX 15: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 
ANNEX 15: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

is  an 

The  regional  dimension 
important 
factor  when  assessing  economic  and  social 
developments  in  Member  States.  Taking  into 
account  this  dimension  enables  a  well-calibrated 
and targeted policy response that fosters cohesion 
and  ensures  sustainable  and  resilient  economic 
development  across  all  regions.  With  an  average 
of 126%, almost  all Austrian regions are situated 
above the EU average in terms of GDP per capita 
(PPS),  with  only  one  region,  Burgenland,  falling 
behind  with  a  GDP  per  capita  that  is  89%  of  the 
EU  average.  These  disparities  have  steadily 
decreased in  the  past  decade  and  are  among  the 
lowest in the EU, next to its neighbour Germany.  

Graph A15.1: GDP per head (2019) and GDP growth 
(2010-2019) in Austria 

touristic regions in western Austria (Tirol  – 136%, 
Vorarlberg  –  137%).  The  mainly  rural  and 
peripheral  Burgenland  is  at  only  89%  of  EU’s 
average  GDP  per  capita.  However,  Burgenland  is 
on a good path to catch up with the other regions, 
forming part of the country’s leaders in growth of 
GDP per capita between 2010 and 2019 (when it 
grew  at  +1.31%  per  year),  right  after  Upper 
Austria,  Styria  and  Vorarlberg.  Overall,  growth  in 
real  GDP  per  capita  was  lower  in  Austria  than  on 
average  in  the  EU  (+0.96%  versus  +1.39%  per 
year  from  2010  to  2019).  In  Vienna,  a  negative 
trend  can  even  be  observed  (with  the  GDP  per 
capita  falling  by  -0.8%  per  year  in  this  period) 
related 
the  city’s 
population. 

to  a  strong 

increase 

in 

Graph A15.2: Territories most affected by the 
climate transition in Austria 

Source: European Commission 

Although  overall  economic  disparities  are 
low, relatively strong disparities persist on a 
regional  level.  Data  from  2019  show  that  GDP 
per capita as a percentage of the EU average was 
highest  in  territories  with  strong  urban  centres 
(Vienna  –  149%,  Salzburg  –  151%),  but  also 

Source: European Commission 
Notes: JTF has not yet been formally resubmitted by AT. 

Disparities  in  Austria’s  labour  productivity 
have  shrunk.  In  2018,  productivity  measured  as 
gross  value  added  per  person  employed  was 
above  the  EU  average  (at  116.76%).  At  the 
region  of 
regional 

level,  Austria’s  weakest 

Table A15.1: Selected indicators at regional level – Austria 

Source: EUROSTAT 

49 

-0.50.00.51.01.52.07090110130150170Annual real GDP per head growth 2010-2019GDP (PPS) per head in 2010 (EU = 100)Capital regionOther NUTS2 regionsNational averageEU27EU27=100, 2019EU27=100, 2018Avg % change on preceding year, 2010-2019Avg % change on preceding year, 2010-2019Total % change, 2011-2019Total % change, 2011-2019% of active population, 2020% of GDP, 2017% of total employment, 2020tCO2 equivalent, 2018European Union1001001.001.391.82.27.12.194.57.2Österreich126116.760.480.966.256.005.403.144.09Burgenland891000.421.313.56.94.20.852.47.7Niederösterreich1041130.500.984.65.94.21.802.99.4Wien149126-0.33-0.0812.110.410.63.607.23.7Kärnten1081081.001.260.82.84.72.944.68.9Steiermark1151050.761.423.34.44.44.873.812.0Oberösterreich1301171.021.455.74.73.93.463.415.0Salzburg1511240.891.285.74.13.01.592.86.5Tirol1361160.461.107.15.13.02.883.66.9Vorarlberg1371330.781.437.54.63.61.752.15.6 
 
  
 
 
 
 
  
 
Burgenland  matched  the  EU  average  in  2018, 
while  productivity  levels  in  other  regions  ranged 
from  105%  in  Styria  to  133%  in  Vorarlberg. 
Vienna  is  situated  in  between  these  two  poles, 
with  a  productivity 
level  of  126%.  Labour 
productivity  has  slowly  converged  internally  since 
2010  (i.e.  differences  in  productivity  between 
regions  have  decreased),  after  a  previous  decade 
of slow increases in disparities. Between 2010 and 
2019,  annual  productivity  grew  by  1.0%  in  Upper 
Austria  and  Carinthia  (greater  than  the  national 
average  of  0.5%,  but  less  than  the  EU  average). 
On the other hand, labour productivity has declined 
in the region of Vienna. Overall, productivity levels 
in  Austria  have  been  stagnating  in  recent  years. 

Graph A15.3: CO2 emissions from fossil fuels per 
head (2018) 

Source: European Commission 

Greenhouse gas emission intensity per capita 
in  Austrian  regions  hovers  around  the  EU 
average  (7.2  tCO2)  except  in  Styria  and  Upper 
Austria,  where  it  reaches  12  and  15  tCO²  per 
capita  respectively.  The  last  coal-fuelled  electric 
power plant closed in the spring of 2020. Close to 
80% of Austria’s electricity comes from renewable 
sources.  Austria  plans  to  become  climate  neutral 
its  entire  energy  production 
by  2040  with 
stemming  from  renewables  by  2030.  The  bulk  of 
emissions in Austria stem from a number of GHG-
intensive  sectors  dominated  by  SMEs  or  small 
mid-caps  active  in the  sectors  of  (i)  basic metals: 
(ii)  paper  and  paper  products:  (iii)  chemicals  and 
chemical  products: 
(iv)  petrol  and  petroleum 
products  and  (v)  cement  and  are  concentrated  in 
Upper Austria, Styria, Lower Austria, and Carinthia. 
Austria  intends  to  focus  support  from  the  Just 
Transition  Fund  on  regions  that  face  strong 
transition  pressure  due  to  their  ambitious  climate 

neutrality roadmap and regions that have a highly 
vulnerable  labour  market,  due  to  the  high  shares 
of GHG-intensive industries that will be shut down 
in the transition to a climate-neutral economy.  

the  EU 

At  national  level,  R&D  investments  have 
continuously increased in recent years, driven 
by  the  public  and  private  sectors.  R&D 
intensity in Austria has surpassed 3% of GDP since 
2014  and  surpassed 
research  and 
innovation  (R&I)  investment  target  since  2018. 
However,  Austria  has  not  yet  reached  its  own 
national  target  of  3.76  %  of  GDP  for  2020. 
Significant  differences  can  be  seen  at  regional 
level, with Styria (R&I at 4.9% of GDP in 2017) in 
the  lead  and  Burgenland  (R&I  at  0.85%  in  2017) 
at  the  bottom.  Although  Austria  has  a  good 
innovation  performance  compared  to  the  EU 
average,  digital  technologies  are  still  not  widely 
used,  particularly  in  smaller  businesses.  To  make 
matters worse, restrictive service sector regulation 
is  hampering  investment.  Austria’s  share  of  high-
tech,  medium-high-tech  and  knowledge  intensive 
services is lower than the EU average and that of 
most  strong  innovators.  Regional  disparities  were 
also  striking  in  the  high-technology  sectors  in 
2020, with the highest being in Vienna (7.2%) and 
Carinthia (4.6%), with considerably lower values in 
Salzburg (2.8%) and Vorarlberg (2.1%). 

Graph A15.4: Gross value added per worker 

Source: European Commission 

The  declining  trends  in  unemployment  and 
labour  slack  reversed  in  all  regions  in  2020. 
The  unemployment  rate  increased  by  more  than 
1.4 pps  in  Vienna,  while  the  increases  in  less 
(maximum 
developed  regions  were  moderate 

50 

 
 
 
 
 
 
 
+0.5 pps 
in  Lower  Austria  and  Burgenland). 
Likewise,  labour  market  slack  increased  in  all 
regions,  notably 
it 
increased  by  the  least  in  Burgenland  and  Lower 
Austria (+2.0 pps and 2.2 pps, respectively). 

in  Vienna  (+3.1 pps),  but 

Graph A15.5: Excess mortality 2020-2021 by 
NUTS2 region (%) 

Source: European Commission 
Note: Mortality from 2020/week 9 to 2021/week 38 
compared to average mortality in the same weeks of years 
2015 to 2019 

The  COVID-19  pandemic  affected  Austria 
strongly,  with  an  excess  mortality  rate  of 
10% in 2020. The excess mortality was lowest in 
Burgenland  (8%),  while  it  hit  12%  in  Salzburg, 
Vorarlberg  and  Styria  (Graph  A15.4).  All  regional 
labour  markets  deteriorated  as  the  COVID-19 
pandemic  restrained  economic  growth  in  2020. 
Overall, real GDP shrank by 6.7% in 2020.  

51 

 
 
 
 
 
MACROECONOMIC STABILITY 
MACROECONOMIC STABILITY 
ANNEX 16: KEY FINANCIAL SECTOR DEVELOPMENTS 
ANNEX 16: KEY FINANCIAL SECTOR DEVELOPMENTS 

in  2020,  profitability  of  Austrian  banks  remained 
resilient  and  further  improved  in  Q2-2021.  The 
cost-to-income  ratio  has  declined  on  the  back  of 
the  efforts  made  by  banks  to  increase  efficiency. 
All banks have liquidity coverage ratios well above 
the 
regulatory  minimum.  Banks  have  also 
benefitted  from  abundant  central  bank  liquidity, 
which  stood  at  roughly  10%  of  total  liabilities  in 
Q2-2021. 

The  buoyant  real  estate  market  has  shown 
increasing  signs  of  overheating  following 
several  years  of  increases  in  house  prices. 
Supported by  state  guarantees on loans, credit to 
the private sector expanded since the onset of the 
pandemic, with housing loans growing particularly 
strongly  since  2019.  Private  debt  climbed  to 
131.2% of GDP in 2020. 

Graph A16.2: Evolution of house price index 

Source: Eurostat, The data are expressed as quarterly index 
(2015=100) 

sector 

Austrian 

This  annex  provides  an  overview  of  key 
developments  in  Austria’s  financial  sector. 
The 
remains 
financial 
predominantly  bank-based.  Total  banking  sector 
assets  stood  at  245%  of  GDP  at  the  end  of  Q2-
2021. Of these assets, the five largest banks had 
a share of 38.5% at the end of 2020, higher than 
is 
in  previous  years.  The  banking  sector 
domestically  owned  to  a  large  extent,  albeit  by 
complex ownership structures. The loan-to-deposit 
ratio  has  been  on  a  declining  path  since  2019, 
mainly  due  to  the  strong  and  strengthening 
deposit franchise of banks.  

Non-financial  corporations  rely  strongly  on 
bank  loans  for  external  financing,  as  the 
market-funding  ratio  was  rather  low  at 
34.2% in 2020. The issuance of green bonds has 
gained  momentum  since  2018,  but  green 
financing 
to  EU 
is  still  subdued  compared 
frontrunners in this area. 

Graph A16.1: Issuance of green bonds 

(1) Last Data: Q3 2021  
Source: Bloomberg 

increased 

its 
The  banking  sector  has 
resilience 
in  recent  years.  Supported  by 
regulatory  developments  and  retained  earnings, 
the solvency ratio increased to 19.5% in 2020 and 
remained  flat  in  H1-2021.  Nevertheless,  Austria’s 
largest  banks  still  have  catching  up  potential 
compared  to  their  euro  area  peers.  Asset  quality 
has improved for both corporates and households. 
Both  benefited  from  the  public  support  measures 
since  the  onset  of  the  pandemic,  with  the  non-
performing  loans  ratio  declining  to  1.9%  in  Q2-
2021. Despite the increase in loan-loss provisions 

52 

0.00.20.40.60.81.01.21.401002003004005006002015201620172018201920202021All bonds cumulative (lhs)green bonds issued to all bonds (rhs)bn EUR%5075100125150175-10-505101520253003Q404Q405Q406Q407Q408Q409Q410Q411Q412Q413Q414Q415Q416Q417Q418Q419Q420Q421Q42015=100Rate of change y-o-y (%)MFI loans for house purchase (y-o-y growth rate)Real House Price Index (y-o-y growth rate)Real House Price Index (2015=100), right axis 
 
 
  
  
 
 
 
Table A16.1: Financial soundness indicators 

Source: ECB, Eurostat, Refinitiv. 
Note: Last data: Q3 2021 

53 

20172018201920202021Total assets of the banking sector (% of GDP)219.5217.8219.4254.1248.2Share (total assets) of the five largest banks (%)36.136.036.038.5-Share (total assets) of domestic credit institutions (%)176.377.482.483.084.5Financial soundness indicators:1- non-performing loans (% of total loans)3.52.62.22.01.8- capital adequacy ratio (%)18.918.618.719.518.9- return on equity (%)8.78.67.84.18.3NFC credit growth (year-on-year % change)6.99.37.05.08.7HH credit growth (year-on-year % change)3.03.64.34.56.1Cost-to-income ratio (%)165.563.863.160.857.5Loan-to-deposit ratio (%)197.898.8100.990.488.2Central bank liquidity as % of liabilities3.13.02.58.310.0Private sector debt (% of GDP)122.3122.7121.5131.2-Long-term interest rate spread versus Bund (basis points)26.529.131.628.528.6Market funding ratio (%)35.033.832.534.2-Green bond issuance (bn EUR)0.30.51.41.42.5 
 
 
  
 
average  at  various  income  levels,  i.e.  for  single 
persons at the average wage (100%) as well as at 
50%,  67%  and  167%  of  the  average  wage. 
Second  earners  at  a  wage  level  of  67%  of  the 
average  wage,  whose  spouse  earns  the  average 
wage,  also  face  a  higher  tax  wedge  compared  to 
the EU average, although they are not taxed more 
heavily  than  single  persons  at  the  same  wage 
level. On the other hand, the tax system effectively 
addresses  income  inequality.  In  2020,  the  tax-
benefit  system  helped  reduce  income  inequality, 
as measured by the GINI coefficient, by more than 
the EU average. 

Austria 
is  doing  moderately  well  on 
digitalisation  of  the  tax  administration, 
which can help reduce tax arrears as well as 
cut  compliance  costs.  Outstanding  tax  arrears 
have  declined  slightly  by  0.3  pp.  to  7.6%  of  total 
revenue in 2019. This is significantly below the EU 
average of 31.8%, though that average is inflated 
by very large values in a few Member States. The 
EU  Annual  Report  on  Taxation  2021  highlights 
scope for improvement in the rate of tax return e-
filing  in  Austria. (64)  The  VAT  gap  (an  indicator  of 
the  effectiveness  of  VAT  enforcement  and 
compliance)  has  remained  relatively  stable  in 
Austria at 8.7%, below the EU-wide gap of 10.5%. 
Moreover,  the  average  forward-looking  effective 
corporate  income  tax  rates  were  considerably 
above the EU average in 2020.  

ANNEX 17: TAXATION 
ANNEX 17: TAXATION 

This  annex  provides  an 
indicator-based 
overview  of  Austria’s  tax  system.  It  includes 
information  on  the  tax  structure,  i.e.  the  types  of 
tax  that  Austria  derives  most  revenue  from,  the 
tax  burden  for  workers,  and  the  progressivity  and 
redistributive  effect  of  the  tax  system.  It  also 
provides 
tax  collection  and 
compliance  and  on  the  risks  of  aggressive  tax 
planning activity. 

information  on 

Tax  revenues  in  Austria  are  high  in  relation 
to GDP, and the tax system relies heavily on 
labour  taxation  while  growth-friendly  tax 
bases appear to be underused. Despite a series 
of  tax  reforms  (2005,  2010,  2015),  Austria 
remains a high-tax country with a tax-to-GDP ratio 
above  the  EU  average.  To  address  this  challenge, 
the  eco-social  tax  reform,  which  was  adopted  in 
February  2022,  provides  significant  tax  relief  to 
households  and  businesses.  With  the  introduction 
of  a  price  path  for  CO2  emissions  in  sectors 
currently  not  covered  by  the  European  Emissions 
Trading  System,  the  eco-social  tax  reform  also 
includes  an  important  project  from  the  RRP  (see 
Box  3.1  in  Section  3  for  more  details).  However, 
reducing  the  labour  tax  burden  further,  especially 
for low-income earners, and making greater use of 
growth-friendly taxes (e.g. recurrent property taxes 
or inheritance and gift taxes), have the potential to 
boost  economic  growth  in  addition  to  increasing 
the fairness of the tax system. In 2020, labour tax 
revenues as a percentage of GDP were among the 
highest  in  the  EU.  By  contrast,  consumption  tax 
revenues  as  a  percentage  of  GDP  were  only 
slightly 
average,  while 
environmental tax revenues were slightly below it. 
Recurrent taxes on property in Austria were among 
the  lowest  in  the  EU,  also  because  the  cadastral 
values  which  serve  as  their  tax  base  are  largely 
outdated.  Moreover,  Austria  has  no  inheritance  or 
gift taxes. 

above 

the 

EU 

Austria’s labour tax burden is relatively high 
at various wage levels. In 2021, the labour tax 
wedge (63)  was  substantially  higher  than  the  EU 

(63)  The  tax  wedge  is  defined  as  the  sum  of  personal  income 
taxes  and  employee  and  employer  social  security 
contributions  net  of  family  allowances,  expressed  as  a 
percentage of total labour costs (the sum of the gross wage 
and  social security contributions  paid by the employer). It is 
calculated  for  specific  types  of  tax  payers  in  terms  of 
household  composition  and  income  level  expressed  as  a 
percentage of the average wage. Data on tax wedges can be 
consulted  in  the  ‘Tax  and  benefit  database’  by  ECFIN 
https://europa.eu/economy_finance/db_indicators/tab/.  

(64)  European  Commission,  Directorate-General  for  Taxation  and 
Customs  Union,  Annual  Report  on  Taxation  2021:  review  of 
taxation  policies  in  the  EU  Member  States,  Publications 
Office,  2021,  https://data.europa.eu/doi/10.2778/294944, 
see section 2.1.4 Improving tax administration of the Annual 
Report on Taxation 2021 for further details. 

54 

 
 
                                                 
                                                 
 
Table A17.1: Indicators on taxation 

(1) Forward-looking Effective Tax Rate (OECD) 
(*) EU27 simple average, as no aggregated EU27 value 
Source: European Commission and OECD. 

Graph A17.1: Indicators on tax wedge 

(1) The second earner average tax wedge measures how much extra personal income tax (PIT) plus employee and employer social 
security contributions (SSCs) the family will have to pay as a result of the second earner entering employment, as a proportion of 
the second earner’s gross earnings plus the employer SSCs due on the second earner’s income. For a more detailed discussion see 
OECD (2016), “Taxing Wages 2016”, OECD Publishing, Paris. http://dx.doi.org/10.1787/tax_wages-2016-en  
(*) EU27 simple average as there is no aggregated EU27 value. 
Source: European Commission 

55 

2010201820192020202120102018201920202021Total taxes (including compulsory actual social contributions) (% of GDP)41.142.342.642.137.940.139.940.1Labour taxes (as % of GDP)23.123.523.724.420.020.720.721.5Consumption taxes (as % of GDP)11.611.411.411.010.811.111.110.8Capital taxes (as % of GDP)6.47.57.66.77.18.28.17.9Total property taxes (as % of GDP)0.70.80.80.91.92.22.22.3Recurrent taxes on immovable property (as % of GDP)0.20.20.20.21.11.21.21.2Environmental taxes as % of GDP2.32.32.32.12.42.42.42.2Tax wedge at 50% of Average Wage (Single person) (*)38.439.038.636.837.233.932.432.031.531.9Tax wedge at 100% of Average Wage (Single person) (*)48.247.647.947.547.841.040.240.139.939.7Corporate Income Tax - Effective Average Tax rates (1) (*)24.024.023.419.819.519.3Difference in GINI coefficient before and after taxes and cash social transfers (pensions excluded from social transfers)10.39.89.79.78.47.97.48.3Outstanding tax arrears: Total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)7.97.631.931.8VAT Gap (% of VTTL)9.48.711.210.5Dividends, Interests and Royalties (paid and received) as a share of GDP (%)7.16.24.910.710.5FDI flows through SPEs (Special Purpose Entities), % of total FDI flows (in and out)47.846.236.7Tax structureProgressivity & fairnessTax administration & complianceFinancial Activity RiskAustriaEU-2737.243.347.851.143.3At 50% of Average Wage (Singleperson)At 67% of Average Wage (Singleperson)At 100% of Average Wage (Singleperson)At 167% of Average Wage (Singleperson)For second earner at 67% of AverageWage (Two earner couple, 1st earner100% of AW) (1)Tax wedge 2021 (%)ATEU-27 (*) 
 
 
  
 
  
 
ANNEX 18: KEY ECONOMIC AND FINANCIAL INDICATORS 
ANNEX 18: KEY ECONOMIC AND FINANCIAL INDICATORS 

Table A18.1: Key economic and financial indicators 

(1) NIIP excluding direct investment and portfolio equity shares. 
(2) Domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches. 
Source: Eurostat and ECB as of 2022-05-02, where available; European Commission for forecast figures (spring forecast 2022) 

56 

2004-072008-122013-1820192020202120222023Real GDP (y-o-y)3.00.61.41.5-6.74.53.91.9Potential growth (y-o-y)2.21.01.11.11.01.21.31.4Private consumption (y-o-y)1.90.90.90.7-8.53.34.12.3Public consumption (y-o-y)2.11.21.11.5-0.56.7-1.20.7Gross fixed capital formation (y-o-y)1.7-0.22.74.8-5.24.03.72.3Exports of goods and services (y-o-y)7.61.23.33.4-10.812.76.33.8Imports of goods and services (y-o-y) 6.21.33.62.0-9.414.54.63.8Contribution to GDP growth:Domestic demand (y-o-y)1.90.71.31.8-5.84.12.81.9Inventories (y-o-y)0.4-0.10.1-1.20.10.50.10.0Net exports (y-o-y)0.90.0-0.10.9-1.1-0.51.00.0Contribution to potential GDP growth:Total Labour (hours) (y-o-y)0.30.00.40.40.50.60.70.6Capital accumulation (y-o-y)0.70.50.50.70.50.60.60.6Total factor productivity (y-o-y)1.20.50.20.10.00.00.10.1Output gap0.0-0.5-0.42.1-5.7-2.7-0.20.3Unemployment rate5.75.15.94.86.06.25.04.8GDP deflator (y-o-y)2.11.71.81.62.31.83.43.2Harmonised index of consumer prices (HICP, y-o-y)2.02.31.61.51.42.86.03.0Nominal compensation per employee (y-o-y)2.52.22.22.81.73.41.52.6Labour productivity (real, hours worked, y-o-y)2.40.60.7-0.12.1-0.6-1.30.5Unit labour costs (ULC, whole economy, y-o-y)0.92.51.82.57.31.00.51.6Real unit labour costs (y-o-y)-1.20.80.00.84.8-0.7-2.8-1.5Real effective exchange rate (ULC, y-o-y)0.00.00.9-1.0....Real effective exchange rate (HICP, y-o-y)-0.3-0.71.0-1.02.00.2..Net savings rate of households (net saving as percentage of net disposable income)11.210.07.48.514.4...Private credit flow, consolidated (% of GDP)5.92.22.65.04.7...Private sector debt, consolidated (% of GDP)124.1129.7124.0121.5131.2...of which household debt, consolidated (% of GDP)50.953.150.749.653.2...of which non-financial corporate debt, consolidated (% of GDP)73.276.673.472.078.0...Gross non-performing debt (% of total debt instruments and total loans and advances) (2).3.44.21.91.8...Corporations, net lending (+) or net borrowing (-) (% of GDP)0.01.90.7-1.34.14.02.71.8Corporations, gross operating surplus (% of GDP)26.925.324.223.824.724.423.724.0Households, net lending (+) or net borrowing (-) (% of GDP)5.24.02.32.86.01.6-0.4-1.0Deflated house price index (y-o-y)0.72.93.54.06.2...Residential investment (% of GDP)4.44.34.44.75.15.2..Current account balance (% of GDP), balance of payments2.92.61.92.11.9-0.5-1.1-0.9Trade balance (% of GDP), balance of payments3.83.23.23.32.90.2..Terms of trade of goods and services (y-o-y)-0.7-0.70.4-0.60.9-2.5-2.40.6Capital account balance (% of GDP)-0.1-0.1-0.30.0-0.10.0..Net international investment position (% of GDP)-12.8-5.13.513.59.314.7..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (1)-9.8-11.3-9.0-1.4-5.6-4.8..IIP liabilities excluding non-defaultable instruments (% of GDP) (1)175.9193.7162.7145.9159.0155.5..Export performance vs. advanced countries (% change over 5 years)14.7-3.7-6.3-0.85.7...Export market share, goods and services (y-o-y)-0.5-4.80.8-0.50.62.51.6-0.5Net FDI flows (% of GDP)1.42.80.61.42.31.5..General government balance (% of GDP)-2.8-3.2-1.30.6-8.0-5.9-3.1-1.5Structural budget balance (% of GDP)..-0.7-0.6-4.8-4.4-3.0-1.6General government gross debt (% of GDP)66.579.180.970.683.382.880.077.5forecast 
 
 
 
 
  
 
ANNEX 19: DEBT SUSTAINABILITY ANALYSIS 
ANNEX 19: DEBT SUSTAINABILITY ANALYSIS 

scenario  assumes  that  the  structural  primary 
balance (SPB) gradually returns to its past average 
level.  In  the  ‘lower  SPB’  scenario,  the  SPB  is 
permanently  weaker  than  in  the  baseline.  The 
‘adverse interest-growth rate’ scenario assumes a 
in  the 
less  favourable  snowball  effect  than 
baseline.  In  the  ‘financial  stress’  scenario,  the 
country  temporarily  faces  higher  market  interest 
rates in 2022.  

Graph 2 shows the outcome of the stochastic 
projections.  These  projections  show  the  impact 
on  debt  of  2  000  different  shocks  affecting  the 
government’s 
economic 
growth,  interest  rates  and  exchange  rates.  The 
cone covers 80% of all the simulated debt paths, 
therefore excluding tail events. 

budgetary 

position, 

Table  2  shows  the  S1  and  S2  fiscal 
sustainability 
indicators  and  their  main 
drivers.  S1  measures  the  consolidation  effort 
needed to bring debt to 60% of GDP in 15 years. 
S2  measures  the  consolidation  effort  required  to 

This  annex  assesses  fiscal  sustainability 
risks for Austria over the short, medium and 
long term. It follows the same multi-dimensional 
approach as the 2021 Fiscal Sustainability Report, 
updated  on  the  basis  of  the  Commission  2022 
spring forecast. 

Table  1  presents 
the  baseline  debt 
projections.  It  shows  the  projected  government 
debt  and  its  breakdown  into  the  primary  balance, 
the  snowball  effect  (the  combined  impact  of 
interest payments and nominal GDP growth on the 
debt  dynamics)  and  the  stock-flow  adjustment. 
These projections assume that no new fiscal policy 
measures  are  taken  after  2023,  and  include  the 
expected  positive  impact  of  investments  under 
Next Generation EU.  

Graph  1  shows  four  alternative  scenarios 
around  the  baseline, to  illustrate the  impact 
of changes in assumptions. The ‘historical SPB’ 

Table A19.1: Debt sustainability for Austria 

Source: European Commission 

57 

Table 1. Baseline debt projections20192020202120222023202420252026202720282029203020312032Gross debt ratio (% of GDP)70.683.382.880.077.576.274.773.672.972.572.372.573.073.5Change in debt-3.512.7-0.5-2.8-2.5-1.4-1.5-1.1-0.7-0.5-0.10.20.50.6of whichPrimary deficit-2.06.74.82.10.50.70.81.01.21.41.61.81.92.1Snowball effect-0.84.7-3.9-4.8-2.9-2.1-2.3-2.1-1.9-1.9-1.7-1.6-1.5-1.5Stock-flow adjustment-0.61.3-1.4-0.1-0.10.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)8.718.713.311.59.910.110.010.010.110.310.410.610.911.2S1S2Overall index (pps. of GDP)1.73.4of whichInitial budgetary position-1.00.8Debt requirement1.4Ageing costs1.32.6of whichPensions0.7-0.1Health care0.31.0Long-term care0.31.6Others-0.10.0                                                                       Table 2. Breakdown of the S1 and S2 sustainability gap indicators45505560657075808590952019202120232025202720292031BaselineHistorical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioGraph 1. Deterministic debt projections (% of GDP)p10-p20p20-p40p40-p60p60-p80p80-p9045556575859520192020202120222023202420252026Graph 2. Stochastic debt projections(% of GDP)MedianBaseline 
 
 
 
 
  
 
Table A19.2: Heat map of fiscal sustainability risks for Austria   

(1) Debt level in 2032: green: below 60% of GDP, yellow: between 60% and 90%, red: above 90%. (2) The debt peak year 
indicates whether debt is projected to increase overall over the next decade. Green: debt peaks early; yellow: peak towards the 
middle of the projection period; red: late peak. (3) Fiscal consolidation space measures the share of past fiscal positions in the 
country that were more stringent than the one assumed in the baseline. Green: high value, i.e. the assumed fiscal position is 
plausible by historical standards and leaves room for corrective measures if needed; yellow: intermediate; red: low. (4) Probability 
of the debt ratio exceeding in 2026 its 2021 level: green: low probability, yellow: intermediate, red: high (also reflecting the initial 
debt level). (5) The difference between the 90th and 10th percentiles measures uncertainty, based on the debt distribution under 
2000 different shocks. Green, yellow and red cells indicate increasing uncertainty.  
Source: European Commission (for further details on the Commission’s multi-dimensional approach, see the 2021 Fiscal 
Sustainability Report). 

stabilise  debt  over  an  infinite  horizon.  The  initial 
budgetary position measures the effort required to 
cover  future  interest  payments,  the  ageing  costs 
component  accounts  for  the  need  to  absorb  the 
projected 
public 
expenditure  such  as  pensions,  health  care  and 
long-term  care,  and 
requirement 
measures  the  additional  adjustment  needed  to 
reach the 60% of GDP debt target. 

in  ageing-related 

the  debt 

change 

risk 

sustainability 

Finally,  the  heat  map  presents  the  overall 
fiscal 
classification 
(Table A19.2).  The  short-term  risk  category  is 
based  on  the  S0  indicator,  an  early-detection 
indicator of fiscal stress in the upcoming year. The 
medium-term  risk  category  is  derived  from  the 
debt  sustainability  analysis  (DSA)  and  the  S1 
indicator.  The  DSA  assesses  risks to  sustainability 
based  on  several  criteria: the  projected  debt level 
in 10 years’ time, the debt trajectory (‘peak year’), 
the plausibility of fiscal assumptions and room for 
tighter  positions  if  needed  (‘fiscal  consolidation 
space’),  the  probability  of  debt  not  stabilising  in 
the  next  5  years  and  the  size  of  uncertainty.  The 
long-term  risk  category  is  based  on  the  S2 
indicator and the DSA.  

decline from 80% of GDP in 2022 to 72% of GDP 
in 2029 before increasing again slightly to 74% in 
2032  (Table 1).  This  debt  path  is  sensitive  to 
possible  shocks  to  fiscal,  macroeconomic  and 
financial  variables,  as  illustrated  by  alternative 
scenarios (one of which pointing to medium risks) 
and  stochastic  simulations  (Table  A19.1  and 
A19.2).  On  the  other  hand,  the  sustainability  gap 
indicator  S1  signals  medium 
risks,  as  an 
adjustment  of  1.7 pps.  of  GDP  of  the  structural 
primary  balance  would  be  needed  to  reduce  debt 
to 60% of GDP in 15 years’ time (Table 2). Overall, 
the  medium  risks  reflect  the  debt  level  and  the 
in  ageing  costs  over  the 
projected 
medium 
to  public 
pensions. 

increase 
term,  especially 

related 

Long-term  risks  to  fiscal  sustainability  are 
medium.  Over  the  long  term,  the  sustainability 
gap  indicator  S2  (at  3.4  pps.  of  GDP)  points  to 
medium  risks,  while  the  DSA  points  to  low  risk, 
leading to an overall medium risk assessment. The 
S2  indicator  suggests  that,  to  stabilise  debt  over 
the  long  term,  it  will  be  necessary  to  address 
budgetary  pressures  stemming  from  population 
ageing, especially those related to long-term care 
and health care (Table 2).  

short-term 

Overall, 
fiscal 
sustainability are low. The Commission’s early-
detection  indicator  (S0)  does  not  signal  major 
short-term fiscal risks (Table A19.2).  

risks 

to 

Medium-term  risks  to  fiscal  sustainability 
are  medium.  On  the  one  hand,  the  debt 
sustainability analysis (DSA) points to low risks. In 
the  baseline,  government  debt  is  projected  to 

58