COMMISSION STAFF WORKING DOCUMENT 2023 Country Report - Austria Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of Austria and delivering a Council opinion on the 2023 Stability Programme of Austria
Date: 2023-05-24
Institutions: European Commission, Secretariat-General
Subjects: Austria, economic policy, economic recovery, economic reform, energy policy, fiscal policy, green economy, labour market, stability pact, stability programme

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 24.5.2023  SWD(2023) 620 final  COMMISSION STAFF WORKING DOCUMENT 2023 Country Report - Austria Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of Austria and delivering a Council opinion on the 2023 Stability Programme of Austria {COM(2023) 620 final}  
 
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

Austria’s economy is resilient but 
faces some challenges 

Graph 1.1: Vacancy rate across EU Member 
States, Q3-2022 

(1) Vacancies in industry, construction and services 
(except activities of households as employers and extra-
territorial organisations and bodies) 
Source: Eurostat 

The  Austrian  economy  has  recovered 
strongly  from  the  COVID-19  pandemic 
but  is  now  facing  headwinds.  In  2022,  it 
grew  by  5.0%,  partly  due  to  the  recovery  of 
the 
tourism  sector,  which  had  suffered 
substantially  during  the  COVID-19  pandemic. 
However,  Russia’s  war  of  aggression  against 
Ukraine and the subsequent increase in energy 
prices suppressed growth in the second half of 
2022. In particular, the fall in real  wages due 
to  inflation  has  led  to  reduced  household 
spending.  Looking  ahead,  growth  is  set  to 
benefit from increasing real disposable income 

(i.e.  disposable  income  adjusted  for  inflation) 
as  energy  prices  moderate,  wages  increase, 
and  government  support  for  businesses  and 
households  begins  to  kick  in.  Overall,  the 
economy  is  expected  to  grow  0.4%  in  2023 
and 1.6% in 2024.  

Russia’s  war  of  aggression  against 
Ukraine  and  subsequent  spikes  in  energy 
prices  fuelled  inflation  in  2022.  In  early 
2023,  consumer  prices  had 
increased  by 
11.5%  compared  to  a  year  ago,  which  was 
about  1.5pps  above  the  EU  average.  Looking 
forward,  consumer  prices  are  expected  to 
remain high, as higher energy prices have now 
been  passed  through  to  core  inflation  (the 
change in the cost of goods and services that 
does  not  include  the  more  volatile  food  and 
energy  sectors).  Moreover,  wage  agreements 
in  recent  months  have  resulted  in  wage 
increases  that  are  slightly  above  the  inflation 
rate (1).  However,  a  number  of  measures  to 
cushion  the  economic  and  social  impact  of 
high  energy  prices  on  consumers  and 
businesses  have  recently  been  adopted  (see 
Box 1 for a general overview and Box 2 for a 
detailed  analysis  of  the  electricity 
‘price 
brake’).  

remains  a  pressing 

The  jobs  market  improved  steadily  in 
2021  and  2022,  but  the  shortage  of 
workers 
issue. 
Unemployment  is  expected  to  remain  at  its 
current  low  level  of  around  5%,  although 
regional  differences 
in  different  parts  of 
Austria  are  significant.  At  the  same  time, 
shortages of workers have become more acute 
for both skilled workers (such as IT workers or 
specialists  in  renewable  power  installation) 
and  less  skilled  workers  (such  as  workers  in 
sector).  Austria 
tourism 
Austria’s 

large 

(1)  Additionally, profit margins also increased considerably 
in some sectors in 2022, leading to further upward 
pressure on prices. However, in 2023 increasing unit 
labour costs are expected to lead to the reverse effect.   

2 

0%2%4%6%DenmarkFranceBulgariaSpainRomaniaGreecePolandSlovakiaCroatiaIrelandPortugalLithuaniaItalyEstoniaCyprusFinlandLuxembourgMaltaSwedenHungaryEU 27LatviaSloveniaGermanyCzechiaBelgiumNetherlandsAustriavacancy rateNot available 
 
  
                                                 
Box 1: 

Energy support measures in Austria 

  Austria  adopted  various  support  measures  to  cushion  the  impact  of  energy-price 
inflation on households and businesses. For 2023, the total budgetary costs of these 
measures are projected in the Commission 2023 spring forecast to amount to 1.8% 
of  GDP (2).  Most  measures  do  not  preserve  the  price signal (i.e.  they  do  not  ensure 
that energy is sufficiently expensive to encourage consumers and companies to use 
less  of  it),  although  most  of  them  are  not  significantly  targeted  at  low-income 
Austrians.  

  Notable measures include: (i) the climate bonus; (ii) a lump-sum transfer in 2022 of 
EUR  500  to  every  adult  (EUR  250  for  children);  (iii)  increased  rent  support  for 
vulnerable  households;  and  (iv)  a  payable inflation-tax  allowance  for  people  with  a 
gross monthly income of less than EUR 1 800. Companies of all sizes are also being 
supported by a refund of part of their energy costs above a certain threshold. From 
December 2022 to June 2024, Austria has introduced an electricity ‘price brake’. The 
scheme  compensates  households  for  the  difference  between  the  contract  price  of 
electricity and EUR 0.10 per kWh (but the compensation does not cover any increases 
in the contract price to prices greater than EUR 0.30 per kWh) for a quantity of up to 
2 900 kWh per year. The price signal is thereby somewhat impaired (i.e. the scheme 
means that consumers are shielded from some price increases and are therefore not 
always  encouraged  to  use  less  electricity).  However,  this  impairment  of  the  price 
signal is slightly mitigated  because: (i) the full market  price  has to be paid for  any 
electricity  consumption above 2 900 kWh per year; and  (ii)  the VAT consumers pay 
will  continue  to  be  based  on  the  actual  contract  price,  and  not  the  reduced, 
subsidised  price.  Furthermore,  vulnerable  households  can  receive  support  for  grid 
costs, while all households and companies received a subsidy for the increase in grid 
costs in 2023. 

  Austria applies the EU solidarity tax on the windfall profits of fossil-fuel companies 
that  benefit  from  the  energy-price  spike  in  application  of  Council  Regulation  (EU) 
2022/1854 (3), at a rate of 40% on these extraordinary profits for the second half of 
the 2022 fiscal year and all of the 2023 fiscal year. 

  In 2022, Austria implemented various measures to increase the security of its energy 
supply.  These  measures  include  energy-saving  campaigns  to  reduce  overall  energy 
consumption  and  demand-reduction  ‘auctions’  open  to  industrial  and  large-scale 
consumers  to  reach  the  country’s  binding  target  to  reduce  gross  electricity 
consumption by 5% on average per hour. Austria also introduced EUR 118 million in 
investment support for wind and solar PV installations to accelerate the deployment 
of renewables. On gas storage, Austria has introduced a 20TWh strategic gas reserve 
to be released in the event of emergency. Austria also provided a credit line to Wien 
Energie, an Austrian energy supplier, which was in financial trouble. 

currently  has  the  highest  job  vacancy  rate  in 
the EU (see Graph 1.1).  

(2)  For 2022, the total budgetary costs of these measures 
amounted to 1.5% of GDP. Some of the measures 
outlined in this box were already in place in 2022. 

(3)  i.e. the application of a mandatory, temporary solidarity 
tax at a rate of at least 33% on the extraordinary and 
unexpected profits of businesses active in: (i) the 
extraction of crude petroleum, natural gas and coal; and 

In the past few years, there has been an 
increasing  degree  of  mismatch  in  the 
Austrian labour market. There are currently 
many  open  vacancies  for  which  there  are  not 

(ii) the refinery sector. The solidarity tax is calculated on 
taxable profits (as determined under national tax rules 
in the fiscal year starting in 2022 and/or in 2023) which 
are above a 20% increase on the average yearly 
taxable profits in 2018-2021. 

3 

 
                                                 
 
                                                                        
 
of 

enough  skilled  workers  to  fill  while  the 
available  number  of  workers  also  differs 
significantly  between  Austria’s  regions.  This 
trend further accelerated during the pandemic 
and  is  preventing  Austria  from  achieving  its 
full economic potential. At the same time, the 
employment 
several 
potential 
disadvantaged  groups 
in  Austrian  society 
remains  underused.  These  disadvantaged 
groups  include:  (i)  older  workers;  (ii)  people 
with  low  levels  of  qualifications;  (iii)  people 
with  a  migrant  background;  and 
(iv) 
underrepresented  groups,  such  as  women. 
Addressing  this  long-standing  challenge  is 
important  if  Austria  is  to  implement  the 
European Pillar of Social Rights and achieve its 
national employment-rate target by 2030 (see 
Annex 14).  

Productivity  growth  in  Austria  is  below 
the EU average. Austria’s economy is driven 
by  small  and  medium-sized  enterprises 
(SMEs),  mainly  operating  in  low-to-medium-
tech  sectors.  However,  the  country  is  missing 
out  on  the  productivity  gains  that  typically 
follow  in  countries  with  a  stronger  role  for 
high-tech  sectors,  which  typically  spend  more 
money  on  research  and  development  (R&D). 
Furthermore,  in  those  Austrian  industries  with 
high levels of investment in R&D, this does not 
consistently  translate  into  more  innovation. 
Better access to risk capital for Austrian start-
the  birth  of  new 
ups  could  strengthen 
innovative 
Low 
in  Austria. 
companies 
competition  in  business  services  affects  the 
business  environment  in  the  country,  leading 
to  an  overall  decline  in  business  dynamism. 
Regulatory 
for 
certain  professional  services,  also  remains 
high. (See Annex 12 on the single market and 
industry and Annex 11 on innovation.) 

restrictiveness,  particularly 

The  housing  market  is  overheated  but  is 
now  showing  signs  of  cooling  down.  The 
persistent upward trend in residential property 
prices  over  the  past  few  years  continued  in 
2022,  but  in  the  fourth  quarter  of  2022  the 
rate  of  price  growth  finally  began  to  slow 
down, as interest rates rose, lending standards 
tightened,  and  real  incomes  (i.e.  incomes 
fell.  Construction 
adjusted 
activity  has  also  slowed.  This  slowdown  is 
partially  due  to  an  oversupply  of  new  houses 
completed,  which  in  2022  stood  at  30 000 

inflation) 

for 

4 

houses  (according  to  figures  from  Austria’s 
central  bank).  Overall,  the  risk  to  financial 
stability posed by the housing market appears 
limited,  partly  thanks  to  the  relatively  low 
levels of household indebtedness and the low 
exposure  of  Austrians  to  variable  interest 
rates.  (See  Annex  23  on  the  financial  sector 
and  Annex  5  on 
financial  globalisation 
capacities.) 

The  financial  sector 
is  robust,  but 
exposure  to  Russia  remains  a  concern. 
Austrian  banks  are  well  capitalised,  and  the 
share  of  non-performing 
loans  decreased 
further  in  2022.  Although  the  exposure  of 
Austrian companies to Russia has substantially 
decreased over the last year, the subsidiary of 
a  major  Austrian  bank  remains  active  in  the 
country. However, there are no signs that this 
could  seriously  affect  the  stability  of  the 
financial  sector  in  Austria.  (See  Annex  23  on 
the financial sector.) 

energy 

diversifying 

Austria  remains  dependent  on  Russian 
gas  but  has  taken  some  measures  to 
speed  up  the  green  transition  in  2022. 
Before the Russian aggression against Ukraine, 
Austria  imported  80%  of  its  gas  from  Russia. 
Although  gas  imports  from  Russia  in  general 
decreased  in  2022,  the  share  of  gas  imports 
from  Russia  remains  high  (at  around  57%). 
supplies 
Therefore, 
remains  a  priority  for  the  upcoming  winters. 
Although  some  key  green-transition  projects 
are  included  in  the  Austrian  recovery  and 
(RRP),  a  EUR 4.5  billion 
resilience  plan 
investment and reform plan, Austria’s ongoing 
efforts are not at present sufficient to ensure 
energy  security  in  case  of  further  geopolitical 
disruptions.  Several  issues  are  holding  back 
Austria’s  plans  for  energy  security.  These 
issues 
include  shortages  of  workers  and 
lengthy  permitting  procedures  for  renewable 
energy projects. However, Austria has recently 
taken  some  steps  in  the  right  direction  (see 
‘Further  Priorities  Ahead’  section  and  Annex 
12)  to  address  these  challenges.  On  energy 
efficiency,  there  has  been  progress.  However, 
the  delay  of  important  legislation  and  the 
sluggish  pace  at  which  homes  are  being 
renovated  mean  that  Austria  has  to  do  more 
to  reach  its  energy-efficiency  targets.  These 
reducing  primary  energy 
targets 

include 

 
consumption  from  31.5  million  tonnes  of  oil 
equivalent  in  2020  to  30.8  million  tonnes  in 
2030. Speeding up the green transition is also 
expected to help Austria to reach its ambitious 
goals  to  reduce  emissions  of  greenhouse 

gases in sectors outside the EU Emissions  

Trading  System  by  36%  by  2030  compared 
with  2005  and  reaching  climate  neutrality  by 
2040,  respectively,  both  of  which  the  country 

Box 2: 

The distributional impact of the Austrian electricity ‘price brake’ 

In  October  2022,  the  Austrian  parliament  adopted  a  price-based  electricity  support  model  for 
households  called  the  electricity  ‘price  brake’  (Strompreisbremse)  (see  Box  1).  The  price  brake 
subsidises  electricity  consumption  for  all  households.  The  European  Commission’s  Joint 
Research Centre (JRC) has estimated the direct impact of the electricity price brake on households. The 
JRC’s analysis uses  2022  as  its  baseline  year,  and simulates the  recent  inflationary  shock  based  on 
the increase in consumer prices as forecasted in the Commission’s 2023 Winter Interim Forecast. The 
JRC then simulated: (i) the original price cap (as described above); and (ii) a more targeted price cap 
for low-income households. 

Graph 1.2: Additional burden on household 
expenditure (as a percentage of baseline 
disposable income) by income deciles (price 
cap to poorest two quintiles) 

In general, the impact of inflation, which in 2022 
was  strongly  driven  by  high  energy  prices,  is 
much  more  pronounced 
low-income 
households, which typically spend proportionally 
more  of  their income  on  energy  compared  with 
high-income households.  

for 

the  poorest  households 

In  their  simulation,  the  JRC  found  that  the 
electricity price brake helped to offset the 
increase  in  expenditures  caused  by  high 
inflation  for  all  households.  The  price  cap 
the  most, 
helped 
although  its  effect  was  not  enough  to  reverse 
the  regressive  nature  of  the  inflationary  shock 
discussed  in  the  paragraph  above.  Targeting 
low-income 
the 
households  would  lead  to  less  regressive 
outcomes,  but  at  the  cost  of  making 
middle-income  groups  among  the  main 
losers,  making  the  implementation  of  such  a 
policy  difficult 
from  a  political-economy 
perspective. 

towards 

price 

cap 

Source: European Commission’s Joint Research Centre, 
calculations based on the EUROMOD model, version I5.0+ 
and its Indirect Tax Tool extension (ITTv4). 

Overall,  there  are  two  clear  advantages  of  a 
more  targeted  electricity  price  brake.  First, 
these  measures  would  only  focus  on  income 
groups  that  are  much  more  exposed  to 
inflation and less able to cope with the increase in prices on their own. Second, the negative impact 
on  public  finances  would  be  lower  using  a  more  targeted  approach.  The  budgetary  estimates 
indicate  that  the  current  version  of  the  electricity  price  brake  will  cost  about  EUR  2.7  bn,  and  that 
targeting  the  electricity  price  brake  towards  low-income  households  would  reduce  the  cost  by  59%. 
Furthermore,  price  caps  in  general  may  harm  competition,  as  energy  companies  are  less 
incentivised  to  lower  their  prices  to  attract  new  customers,  thus  making  the  case  for  a 
more  targeted  approach.  Consumers  might  also  be  less  incentivised  to  reduce  their 
consumption  by  such  schemes,  and  this  might  be  a  significant  problem  for  energy-saving 
efforts. 

5 

SubsidyInflation shockPrice cap for low income households02468101212345678910Percentage of baseline disposable incomeIncome decilePrice brake for all households 
     
 
 
is currently not on track to meet. 

to 

related 

Austria scores well on the United Nations 
Sustainable  Development  Goals  (SDGs). 
Despite lagging behind its ambitious target of 
climate  neutrality  by  2040,  Austria  performs 
well  –  or  is  improving  –  on  most  SDG 
indicators 
environmental 
sustainability  (SDGs  2,  6,  9,  11,  12,  13,  14). 
However, it is moving away from the target on 
life  on  land  (SDG  15).  In  particular,  emissions 
in  the  transport  sector  remain  high.  On 
fairness,  Austria  performs  generally  well  on 
SDG 1 (no poverty) due to its well-functioning 
safety net and support policies, and on SDG 3 
(good health and well- being). However, it still 
needs  to  catch  up  on  the  SDGs  for  quality 
education  (SDG  4)  and  partnerships  for  the 
goals  (SDG  17).  Austria  also  performs  very 
well 
to 
institutional  stability, 
macroeconomic  and 
including  its  investment  share  of  GDP  (see 
Annex 1). 

indicators 

related 

SDG 

on 

Government support measures 
stabilised the economy during 
challenging times 

since 

Strong government support protected the 
economy during the energy and COVID-19 
crises.  Austria  has  provided  far-reaching 
support  to  households,  businesses,  and  public 
Income-support 
2020. 
services 
measures,  grant  schemes,  and  a  large-scale 
short-time  work  scheme  provided  a  strong 
safety  net  to  households  and  companies. 
Following  Russia’s  aggression  against  Ukraine 
and the subsequent energy crisis, the Austrian 
government  once  again  adopted  large-scale 
support  measures,  aiming  to  stabilise  real 
inflation.  The 
incomes 
Austrian  RRP 
support 
measures,  and 
towards 
supporting  the  economic  recovery  in  line  with 
the green and digital transitions.  

delivers 
further 
is  also  geared 

in  times  of  high 

Public finances are under strain from the 
economic  fallout  of  Russia’s  aggression 
against  Ukraine  and  the  cost  of  further 
After 
necessary 

support  measures. 

6 

reaching  its  all-time  high  of  8.3%  of  GDP  in 
2020, the deficit decreased to 3.2% of GDP in 
2022.  Improvements  in  public  finances  were 
largely driven by the strong economic recovery 
following the relaxation of COVID-19 lockdown 
measures  in  2021  and  the  sharp  rise  in 
revenues from income-based and value added 
taxes.  Despite  continued  government  support 
measures aimed at cushioning households and 
businesses  from  inflation  and  high  energy 
prices  (see  Box  1  for  a  general  overview), 
including the electricity ‘price brake’ (see Box 2 
for a detailed analysis), some improvements in 
the deficit are expected. Austria’s debt-to-GDP 
ratio is set to improve in the years ahead, but 
this  outcome  remains  dependent  on  both 
energy-price  developments  and  economic 
growth.  

Graph 1.3: General government budget balance 
and gross debt 

Source: European Commission Spring Forecast 2023 

Although  fiscal-sustainability  risks  are 
limited,  ageing-related  costs  will  be  a 
burden on public finances. Large cohorts of 
the  population  are  now  reaching  retirement 
age,  and  life-expectancy  is  also  increasing. 
These  developments  will  increase  the  burden 
on  public  finances,  even  after  taking  into 
account migration and any possible increase in 
the  share  of  women  and  older  people  in 
employment.  Austria’s  old-age-related  costs 
as a percentage of GDP are expected to be the 
third  highest  in  the  EU  by  2030  (see  the 
chapter  on  key  further  challenges).  This  is 
particularly relevant for the pension and long-
term-care  systems,  both  of  which  should  be 
further  adapted  to  address  adequacy  and 
fiscal-sustainability  risks.  At  the  same  time, 

0102030405060708090100-12-10-8-6-4-20246815161718192021222324% of GDPGross debt (rhs)Budget balance (lhs)forecast% of GDP 
   
the  investments  needed  to  meet  emission 
targets  or  stepped-up  purchases  of  CO2 
certificates  may  result  in  additional  pressure 
on public finances in the long-term.  

same 

sustainable  and 

The  RRP  has  contributed  to  the  country’s 
reform  agenda,  but  further  reforms  are 
needed.  As  the  first  batch  of  reforms  and 
investments  under  the  RRP  have  now  been 
successfully  completed,  the  Commission  has 
started  to  disburse  funds  following  the  first 
payment  request  by  Austria.  The  projects  in 
the  plan  address  a  wide  range  of  reforms, 
such  as  the  green  and  digital  transitions 
(including the eco-social tax reform (see Annex 
19) as a flagship project), business dynamism, 
inclusive  growth. 
and 
However,  there  remain  areas  where  structural 
reforms  could  help  to  increase  efficiency  and 
create  much  needed  budgetary  space.  The 
national fiscal-governance framework plays an 
important  role  in  providing  public  goods  and 
boosting  progress  towards  climate  goals.  At 
the 
lacks 
the 
transparency,  for  example  in  the  area  of 
environmentally harmful subsidies. In addition, 
taxing  and  spending  responsibilities  are  not 
government, 
levels 
aligned 
hampering  efficient  government  spending.  In 
the sphere of taxation, the successful adoption 
of  two  relevant  reforms (4)  recently  proved 
is  capable  of  successfully 
that  Austria 
implementing  large  reforms  within  a  short 
period of time. And there still remains scope to 
reduce environmentally harmful subsidies and 
further  improve  the  tax  mix.  For  example, 
relatively  growth-friendly 
taxes,  such  as 
environmental  taxes  or taxes  on  property  and 
tobacco remain underused. On labour taxation, 
Austria’s  persistently  high  and  above-EU-
average  tax  ‘wedge’  (the  taxation  of  earnings 
from work) including the high non-wage labour 
costs paid by employers, remains an issue (5). 

framework 

across 

time, 

of 

(4)  Recent tax reforms include the eco-social tax reform, 

introducing a CO2 price, and the abolition of ‘tax bracket 
creep’ (see tax-Annex). 

(5)  The recent abolishment of the tax-bracket creep 

prevents further growth in Austria's already high tax 
wedge and cushions the effects of inflation on workers 
(see Annex 19 and ‘Further priorities ahead’ section). 

7 

 
 
                                                 
 
 
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY 

Austria’s RRP aims to: (i) address the key 
challenges  related  to  the  green  and 
digital  transitions;  and  (ii)  strengthen 
economic  and  social  resilience.  It  includes 
reforms  and  investments  in  crucial  areas  like 
education,  skills,  healthcare,  the  business 
environment,  and  research  and  innovation.  It 
consists  of  27  reforms  and  32  investments 
that  are  supported  by  EUR 3.751 billion  in 
grants, representing 0.93 % of GDP (see Annex 
3 for more details).  

The implementation of Austria’s recovery 
and  resilience  plan  is  well  underway. 
Austria  submitted  one  payment 
request, 
corresponding to 44 milestones and targets in 
in  an  overall 
resulting 
the  plan  and 
disbursement  of  EUR  700  million  on  20  April 
2023.  Beyond  the  first  payment  request,  the 
implementation of the plan is on track. Austria 
is  expected  to  submit  a  request  to  modify  a 
few measures due to objective circumstances, 
such  as  price  increases  and  supply  chain 
shortages.  The  preparation  of  a  new 
REPowerEU  chapter  is  also  underway  and  the 
authorities  are  working  closely  with  the 
Commission  services  to  submit  it  shortly.  The 
swift inclusion of the new REPowerEU chapter 
in  the  recovery  and  resilience  plan  will  allow 
additional  reforms  and  investments  to  be 
financed  in  support  of  Austria’s  strategic 
objectives in the field of energy and the green 
transition.  

The  following,  more  detailed 
review  of 
measures being implemented under the RRP in 
no way implies formal Commission approval or 
rejection of any payment requests. 

The  Commission  has  started  to  disburse 
funds  following  the  implementation  of  a 
number  of  reforms  and  investments  set 
out  in  the  Austrian  RRP (6).  By  April  2023, 

(6)  The Austrian RRP is a plan for EUR 4.5 billion in 
investment, a significant part of which will be 

the Commission had disbursed EUR 1.15 billion 
in  funds  to  Austria,  including  EUR  450  million 
of  pre-financing.  Austria  submitted  its  first 
payment  request  in  December  2022.  The 
Commission  disbursed  EUR 700 million  on  20 
the  satisfactory 
April  2023,  based  on 
fulfilment of 44 milestones and targets in the 
Austrian  RRP.  These  investments  and  reforms 
are  in  several  areas,  notably  the  green  and 
digital transitions. 

(i) 

the 

include: 

Reforms  and  investments  related  to  the 
green  transition  are  well  underway.  As 
part  of  the  first  set  of  milestones  already 
fulfilled,  Austria  adopted  several  key  reforms. 
These 
renewable-energy 
expansion law that lays down new framework 
conditions for supporting electricity generation 
from renewable sources; and (ii) the first steps 
of the eco-social tax reform, which introduces 
national  carbon  pricing.  The  government  also 
introduced  a  ‘climate  ticket’  that  incentivises 
the use of public transport and adopted a new 
mobility  masterplan  to  reduce  CO₂  emissions 
in  the  transport  sector.  In  addition,  Austria 
achieved  its  target  of  implementing  6 360 
projects  to  support  the  replacement  of  fossil-
in  residential  buildings  with 
fuel  heaters 
the 
renewable 
authorities  successfully  achieved  several 
the 
crucial  milestones 
construction  of  new 
the 
procurement  of  zero-emission  utility  vehicles; 
(iii) 
in  the  decarbonisation  of 
industry; and (iv) the ecological transformation 
of  businesses.  In  the  sphere  of  hydrogen,  the 
projects 
government 
supporting 
the  development  of  hydrogen 
infrastructure.  Lastly,  Austria  amended  its 

technologies.  Moreover, 

to: 
railways; 

investment 

selected 

national 

related 

(i) 
(ii) 

supporting the green and digital transition. It is currently 
supported by EUR 3.46 billion in funds from the 
Recovery and Resilience Facility (RRF), the EU’s 
instrument for recovery from the COVID-19 pandemic. 
The RRP also contains plans for major reforms. 

8 

 
 
                                                 
 
                                                                        
Box 3: 

Key deliverables under the RRP in 2023-2024 

 

 

 

 

 

 

 

 

 

 

 

 

 

Completion of renovation projects to help insulate the homes of low-income households 

Construction of new railways and electrification of regional railways 

Entry  into  force  of  the  implementing  regulation  to  increase  the  collection  rates  for  plastic 
beverage packaging 

Companies in the retail sector have purchased at least 5 000 new ‘reverse vending machines’ 
(i.e. machines that enable consumers to return empty beverage bottles and cans and receive a 
deposit back in return) or updated existing ones 

At least 200 000 electrical or electronical devices have been repaired or renewed as part of the 
repair bonus  

Provision of digital devices for the first grade of lower secondary school has been completed 

Digital investment in companies and completion of the KMU digital projects 

Completion of the funding projects to digitalise the public administration 

Setting up the technical connections for the ‘once only’ principle (i.e. the principle that users of 
an online service – especially a government service – should only be asked to enter the same 
information once) 

At least 94 000 people have benefited from reskilling and upskilling measures 

At least 50 projects related to primary healthcare will be funded 

The national roll-out of early aid for socially disadvantaged pregnant women 

Construction has begun on Austria’s new Institute for Precision Medicine 

Waste  Management  Act  to 
collection rates for beverage packaging. 

increase  the 

supposed to deliver more digital devices to the 
first grade of lower secondary school until the 
end of 2024. 

In 

thus 

Several reform and investment measures 
related  to  the  digital  transition  have 
been implemented.  As part  of investment in 
citizen-centred, service-oriented e-government 
services,  the  Austrian  government  set  up  a 
Digitalisation  Fund  to  finance  digitalisation 
projects  at  the  federal  government  level. 
Authorities  have  also  amended  the  Business 
reduced 
Service  Portal  Act  and 
bureaucracy  for  business  operators  and  the 
public. 
government 
successfully  began  implementing  projects  to 
infrastructure  and 
support  both  digital 
research 
technologies.  The 
country  also  relaunched  a  new  investment 
scheme  to  help  digitalise  small  and  medium-
sized  enterprises.  National  projects  supporting 
the 
innovative 
microelectronics  and  connectivity  technologies 
were  selected.  Lastly,  Austria  achieved  its 
target of delivering digital devices to all pupils 
in  the  5th  and  6th  grade  at  lower  secondary 
level  in  the  2021/2022  school  year  and  is 

into  quantum 

development 

addition, 

the 

of 

further 

Austria has reached several milestones in 
the  areas  of  skills,  education,  social 
policy,  and 
labour-market  policy.  The 
government  has  set  up  a  one-stop  shop  to 
provide  targeted  support  for  the  long-term 
unemployed,  facilitating  their  return  into  the 
jobs market. The Unemployment Insurance Act 
was  amended,  to  provide  for  an  education 
bonus  scheme,  which 
increases 
incentives for the unemployed to participate in 
training.  Having 
scheme, 
authorities  achieved  their  target  of  disbursing 
the education bonus to a first group of 40 000 
recipients. Two initiatives were also adopted to 
improve  access  to  health  services  for  the 
population,  in  particular  in  rural  areas:  (i)  the 
creation  of  a  network  of  community  nurses; 
and 
launch  of  a  new  funding 
framework  for  new  primary  healthcare  units. 
These  measures  are  set  to  strengthen  the 
sustainability  and  resilience  of  the  healthcare 
system.  To  improve  financial  literacy  among 

launched 

the 

the 

(ii) 

9 

 
 
 
the population, Austria has also drawn up and 
published a national financial-literacy strategy. 

businesses. 

two  art  museums: 

Several milestones and targets related to 
smart,  sustainable,  and  inclusive  growth 
have  also  been 
implemented.  Austria 
published its fourth report on building culture, 
as  well  as  two  feasibility  studies  on  the 
the 
renovation  of 
Volkskundemuseum  (ethnographic  museum) 
and  the  Prater  Ateliers  (studios  for  sculptors). 
In  addition,  the  Austrian  government  adopted 
funding  guidelines  for  its investment  fund  for 
climate-friendly 
To 
cultural 
support  businesses’  equity  position,  a  reform 
measure has entered into force. It consists of 
loans, 
converting 
which were used to bridge liquidity bottlenecks 
during  the  COVID-19  crisis,  into  equity  or 
equity-like 
the 
government  has  adopted  an  amendment  to 
the  occasional  transport  act,  abolishing  the 
binding tariff for ride-sharing services ordered 
the 
via  mobile 
government has issued a decree that exempts 
recharging  points  for  electric  motor  vehicles 
in  commercial 
and  photovoltaic  systems 
to  be 
from  a 
installations 
authorised before they are installed. 

instruments.  Furthermore, 

government-guaranteed 

requirement 

Additionally, 

phones. 

10 

 
FURTHER PRIORITIES AHEAD 

faces  additional 

Beyond  the  challenges  addressed  by  the  RRP, 
challenges  not 
Austria 
sufficiently covered in the plan. These concern 
fiscal  sustainability,  labour  shortages,  energy 
security  and  the  green  transition.  Addressing 
these  challenges  will  help  the  country  further 
improve  relevant  SDG  indicators,  notably  SDG 
9 (industry, innovation and infrastructure), SDG 
12  (responsible  consumption  and  production) 
and SDG 13 (climate action) (see Annex 1). 

Ensuring the sustainability of 
public finances in a time of change 

Government  spending  has  helped  to 
stabilise  the  economy,  but  Austria  still 
faces  challenges  such  as  demographic 
change  and  systemic  inefficiencies.  Key 
fiscal  indicators  are  expected  to  continue  to 
improve,  and  concerns  over  government 
finances  are  likely  to  be  contained  in  the 
coming years. However, the public finances will 
continue  to  be  affected  by  demographic 
change, systemic inefficiencies, increased debt 
related  to  the  COVID-19  pandemic,  and 
Russia’s  aggression  against  Ukraine.  On 
ageing,  it  is  currently  estimated  that  Austria 
will  have  the  third  highest  old-age  related 
costs  in  the  European  Union  as  a  percentage 
of  GDP  by  2030  (see  Graph  3.1) (7).  This 
demographic trend of an older population will 
mean  that  spending  on  pensions,  healthcare 
and long-term care will put pressure on public 
reforms 
expenditure,  making 
indispensable,  including  reforms  of  the  way 
tax  is  raised  and  spent  by  both  Austria’s 
central  federal  government  and  its  regions. 

further 

(7)  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.  

11 

Both the costs of additional investments in the 
green  transition  and  higher  debt-servicing 
costs will add to this burden. 

Graph 3.1: Old-age related costs as a 
percentage of GDP by 2030 

Source: AWG-report 2021 

in  Austria’s  government 
Federalism 
finances  currently  relies  on  complex 
intergovernmental 
transfers  between 
federal  and  regional  levels  and  provides 
limited  incentives  for  efficient  public 
spending. A lack of tax  autonomy makes the 
budgets  of  the  Länder 
(Austria’s  federal 
states)  and  municipalities  dependent  on  a 
complex  system  directed  from  Vienna.  In 
2021,  almost  half  of  all  tax  revenues  were 
transferred  to  different  subnational  levels, 
using  a  variety  of  allocation  mechanisms (8). 
Simultaneously,  many  vital  tasks,  such  as 
healthcare,  childcare  or  investment  in  public 
transport,  depend  in  part  on  expenditures  by 
the  Länder  and  municipalities.  Demographic 
change  and  the  green  transition  will  put 
increasing  cost  pressures  on  these  services. 
The current system blurs the link between the 

(8)  See Mitterer & Pichler (2023).  

FRITATFIBEEUPTDEDKESSIELSENLPLSKROHRCZLUHUMTBGLTCYEELVIE27262523222121212019191919191818181817161414141313131212051015202530 
 
                                                 
  
                                                 
tax burden and government expenditure and is 
therefore prone to inefficiencies and a lack of 
transparency. To improve the quality of public 
spending, it will be crucial to better align these 
strengthening 
while 
responsibilities, 
transparency  and  coordination.  In  particular, 
facilitating 
by 
reforming  the  property  tax  system (9)  would 
in  government 
federalism 
improve  both 
finances  and  the  overall  tax  system.  Ongoing 
negotiations  between  the  central  government 
and the  Länder should be used as a platform 
to make progress in this area (10). 

autonomy 

regional 

tax 

Long-term  care 
is  expected  to  put 
pressure on both fiscal sustainability and 
the  labour  market.  It  is  estimated  that  the 
cost  of  government  spending  on  long-term 
care  alone  will  increase  by  0.5  percentage 
points of GDP by 2030 (11).  At the same time, 
shortages of workers in the sector, partly due 
to  low  wages,  add  an  additional  concern  over 
the system’s future sustainability. The recently 
adopted package to reform the long-term care 
system  both 
increases  wages/transfers  to 
people caring for older persons and addresses 
worker shortages in the sector. However, it will 
also  push  up  public  spending  on  long-term 
care. A 2021 report by a dedicated task force 
on  long-term  care  proposed  measures  that 
could  be  taken  to  improve  the  adequacy  of 
financial 
safeguarding 
care  while 
sustainability of the system (12). The measures 
proposed  include  setting  up  a  coordinated 
overall mechanism to control the system with 
a  clear  assignment  of  responsibilities  across 
levels of government. 

the 

There  are  some  concerns  about  the 
sustainability of government spending on 

(9)  Revenues from recurrent property taxes are particularly 
low in Austria, at 0.2% of GDP compared to an EU 
average of 1.6% (2015). This is mainly due to the 
outdated tax base. At the same time, these revenues 
are an important revenue stream for municipalities. See 
European Commission (2018) for more details. 

(10)  This was good practice in the past. Both the Fiscal 

Relations Compact (see BMF (2017)) and the current 
government agreement (see BKA (2020) page 6) set 
out relevant reform priorities. 

(11)  See Budgetdienst (2023). 

(12)  See Sozialministerium (2021). 

the  healthcare  system.  The  healthcare 
system  proved  resilient  during  the  COVID-19 
pandemic.  However,  health  care  spending  is 
projected  to  increase  significantly  until  2070. 
Prevention  measures  and  outpatient  primary 
healthcare  remain  underused,  while  many 
healthcare  services  are  still  provided  by 
hospitals,  which  is  a  costly  way  to  provide 
care.  The  RRP  will  help  to  strengthen  primary 
healthcare, in particular by supporting new and 
existing  primary  healthcare  centres  in  local 
areas.  

As  many  people  reach  retirement  age, 
government  spending  on  pensions  will 
increase.  The  pension  system  provides 
the 
adequate  pensions  overall.  However, 
working-age  population 
to 
is  projected 
decrease  in  the  future,  and  the  numbers  of 
older  people  will  rise  rapidly.  This means  that 
the  worker-to-pensioner  ratio  is  expected  to 
drop from 3 workers per pensioner in 2023 to 
2 workers per pensioner by 2040 (13). This will 
in  turn  translate  into  pension  expenditures  by 
the government that are projected to increase 
by  2  percentage  points  of  GDP  from  2019 
until  the  mid-2030s  stabilising  thereafter (14). 
Although  some  relevant  measures  to  address 
these  costs  are  included  in  the  RRP,  it  will  be 
crucial to take additional measures to alleviate 
pressure  on  government  spending  from  the 
further 
ageing  population.  This 
encouraging and incentivising unemployed and 
underemployed older workers to find work and 
remain  in  work  longer,  while  taking  general 
the  effective 
measures 
retirement age (see sub-chapter on the labour 
market). 

to  further 

includes 

raise 

There  is  scope  to  shift  the  tax  burden 
labour  to  more  growth-
away  from 
friendly  and 
inclusive  taxes.  Tax  on 
workers’ salaries was estimated to account for 
about  one  third  of  gross  tax  revenues  in 
2022 (15).  At  the  same  time,  Austria’s  tax 
wedge  is  the  third  highest  in  the  EU  due  to 
high  social-security  contributions  and  high 

(13)  See Statistics Austria (2022). 

(14)  See Budgetdienst (2023). 

(15)  See OeNB (2023). 

12 

 
                                                 
                                                 
personal  income  taxes (16).  High  non-wage 
labour  costs  (a  tax  paid  by  employers  for 
every  worker  they  employ)  increase  the  costs 
of  labour  for  employers  and  reduce  the  net 
incomes  of  employees.  Therefore,  non-wage 
labour costs are a drag on job creation and on 
participation in the jobs market,  especially for 
low-wage  workers  and  for  couples  where  one 
adult  is  earning  less  than  the  other  adult 
(these  taxes  disincentivise  the  adult  earning 
less  from  remaining  in  work).  However,  other 
sources  of  revenue,  such  as  environmental  or 
remain  underutilised (17). 
taxes, 
property 
Environmentally 
are 
harmful 
substantial  and  hamper  the  green  transition 
(See  Annex  6).  Austria’s  recent  eco-social  tax 
reform provides major tax relief to households 
and  businesses  and  lays  the  foundation  for 
pricing  CO2  emissions (18).  Furthermore,  the 
automatic  indexation  of  personal  income  tax 
to  inflation  is  a  notable  reform  that  strongly 
reduces  the  increase  in  the  personal  income 
tax  burden  faced  by 
through 
‘bracket creep’ (see Annex on taxation) (19).  

taxpayers 

subsidies 

(16)  The tax wedge is the ratio of personal income tax and 
employer and employee social-security contributions 
(SSCs) less family benefits divided by total labour costs. 
In Austria, social contributions account for most of the 
tax wedge. In 2022, the tax wedge of a ‘secondary 
earner’ (in a two-earner household without children, the 
‘secondary earner’ is the lower-earning member of the 
household with the average wage) stood at 47.3% 
compared to an EU average of 39.7%. See EU tax and 
benefits indicator database 
(https://europa.eu/economy_finance/db_indicators/tab). 

(17)  See European Commission (2019). 

(18)  The newly introduced CO2 price is applied to non-ETS 

sectors. It is budget-neutral, as revenues are disbursed 
via lump-sum transfers. 

(19)  ‘Tax-bracket creep’ or ‘fiscal drag’ is the phenomenon 

whereby the marginal tax rate increases due to nominal 
wage growth as earners move into higher tax brackets. 
At the same time, purchasing power grows more slowly, 
stagnates, or drops due to inflation. 

Tapping into underused labour 
market potential to ease 
shortages of workers 

The  jobs market  is  in  a  robust  state,  but 
widespread  shortages  of  workers  are 
preventing  Austria  from  achieving  its 
economic potential. The unemployment rate 
has  now  fallen  back  to  its  pre-COVID-19 
regional  differences  are 
levels,  although 
significant (20).  At  the  same  time,  Austria 
currently  has  the  highest  job-vacancy  rate  in 
the  EU,  almost  double  the  EU  average  (see 
Graph  1.1).  Increasing  shortages  of  workers 
are  starting  to  hamper  growth  momentum. 
After the COVID-19 crisis, mismatches on both 
skill  (the  skill  of  available  workers  does  not 
match  the  skill  needed  for  an  open  job 
position)  and  regional  level  (the  skill  needed 
for an open job position is not available in the 
region  in  which  the  job  is  based)  intensified. 
There are now shortages of workers in several 
sectors 
tourism, 
(such  as  manufacturing, 
health  and  long-term  care)  and  shortage  of 
workers  with  in-demand  skills  (such  as  IT 
workers, doctors and engineers).  

Skills  shortages  hamper 
the  green 
transition.  In  2022,  shortages  of  workers 
were  reported  in  Austria  for  17  occupations 
that  required  specific  skills  or  knowledge  for 
the green transition, including civil-engineering 
and  mechanical 
technicians, 
engineers (21).  The 
rate  has 
increased  across  key  sectors,  such  as 

job-vacancy 

roofers, 

(20)  See Eurostat data on the unemployment rate - 
quarterly data, seasonally adjusted (TIPSUN30). 

(21)  Data on shortages are based on the European Labour 
Authority (2023), EURES Report on labour shortages 
and surpluses 2022. National authorities report through 
a questionnaire, based on administrative data and other 
country-specific sources as submitted by the EURES 
national coordination offices (definitions of shortages 
differ, thus data are not comparable across countries 
and cover a wide variety of sectors). Skills and 
knowledge requirements are based on the ESCO 
(European Skills Competences and Occupations) 
taxonomy of skills for the green transition (for 
occupations at ISCO 4-digit level of which there are 
436 in total). Examples are identified based on their 
ESCO ‘greenness’ score and relevant sectors. 

13 

 
                                                 
                                                 
construction  (from  1.8%  in  2015  to  6.1%  in 
2021) and manufacturing (from 1.2% in 2015 
to  3.0%  in  2021),  with  both  sectors  standing 
above  the  2021  EU  average  of  3.6%  and 
labour 
1.9%, 
shortages  were 
factor 
constraining production in industry (for 21.4% 
of  firms)  and  construction  (for  35.1%  of 
firms) (23) (see Annex 8). 

In  2022, 
reported  as  a 

respectively (22). 

increase 

to  pre-COVID-19 
in 

The COVID-19 crisis has disrupted labour 
market  patterns.  Austria  has  traditionally 
been  heavily  reliant  on  commuters  from 
neighbouring  countries  to  the  east.  Despite  a 
decrease  in  the  number  of  these  commuting 
workers during the first lockdown phase of the 
pandemic  in  2020,  this  flow  of  workers  has 
levels. 
now 
returned 
However,  the  general 
labour-
market  participation  by  older  and  low-skilled 
workers has slowed significantly in the past 3 
years. Additionally, work intensity (the number 
of  people  in  work  who  are  working  full  time) 
has  decreased  for  both  men  and  women  in 
Austria  (see  Graph  3.2.).  It  is  striking  that 
around  28%  of  part-time  workers  actively 
decide  against  full-time  work,  while  32%  of 
(most  of  whom  were  women) 
workers 
indicated  care  responsibilities  as  the  main 
reason  for  their  refusal  to  move  to  full-time 
work. Improving job  satisfaction will be key in 
tackling  this  shift  towards  reduced  working 
hours  (according  to  a  recent  survey  by  the 
Austrian Chamber of Labour, job satisfaction is 
currently  at  an  all-time low).  In  some  sectors, 
such  as  long-term  care,  comparatively  low 
salaries,  long  hours,  and  existing  shortages 
create  a  spiral  of  dissatisfaction  among 
workers  resulting  in  even  more  shortages  of 
workers.  Furthermore,  making  better  use  of 
tax incentives to increase the average number 
of  hours  worked  by  people  could  help  to 
reduce part-time employment. Since shortages 
are  also  related  to  regional  mismatches  (job 
vacancies are often in places where there are 
no  workers  available),  regional  mobility  could 
be  improved,  for  example  through  financial 
benefits for people to move to jobs outside of 
to  overcome 
their 

region.  Another  way 

shortages of workers in the jobs market is by 
attracting  skilled  worker  from  abroad.  This 
could  be  achieved  by  further  expanding 
Austria’s  scheme  for  skilled  labour  migration, 
‘Red-White-Red  Card’,  which  currently 
the 
remains  underused.  A  reform  of  the  scheme, 
which  was  adopted  in  2022,  has  yet  to  take 
effect. 

Graph 3.2: Part-time work in Austria 

Source: Eurostat 

Encouraging  more  women  into  full-time 
employment could help ease shortages of 
workers. In 2021, the rate of women in work 
or  available  to  work  in  Austria  stood  slightly 
above  the  EU  average.  However,  the  share  of 
part-time  employment  among  women  is  the 
second  highest  in  the  EU  and  substantially 
above  the  EU  average (24).  In  light  of  a 
shrinking work force and shortages of workers, 
there is considerable  potential  to increase the 
participation of women in the jobs market. The 
limited  supply  of  affordable,  high-quality 
childcare and all-day schools makes it difficult 
for parents, in particular mothers, to work full-
time,  especially  in  regions  outside  Vienna. 
Despite  government  efforts  to  increase  the 
supply  of  early  childhood  education  and  care 
and  all-day  schools,  Austria  remains  well 
below  the  EU’s  recently  updated  country-
specific  Barcelona  target  of  having  31.9%  of 
all  children  under  the  age  of  3  in  early 
childhood  education  and  care  (see  Annex  14 

(22)  Eurostat (JVS_A_RATE_R2). 

(24)  See Eurostat data on Activity rates by sex 

(23)  European Business and Consumer Survey. 

(TEPSR_WC130). 

14 

0%10%20%30%40%50%2015-Q12015-Q42016-Q32017-Q22018-Q12018-Q42019-Q32020-Q22021-Q12021-Q42022-Q3part-time rateshare of part-time workers(women)share of part-time workers(overall)pre-COVID19 trend 
                                                 
      
                                                 
and  15).  Although  the  Austrian  RRP  allocates 
around  EUR  28  million  to  expanding  childcare 
facilities, a recent study puts the costs of a full 
nationwide  expansion  of  childcare  facilities  at 
EUR  1.6  billion (25).  Further  extending  the 
supply  of  high-quality  childcare  and  schooling 
(especially in rural areas, where opening hours 
are typically limited) could help to enable more 
women  to  move  into  a  full-time  job.  Bringing 
more  women  into  full-time  work  could  also 
help  close  Austria’s  persistently  high  gender 
pay  gap,  as  well  the  resulting  high  gender 
pension gap.  

of 

the 

given 

particularly 

problematic 

To unlock the potential of disadvantaged 
groups, life-long quality education will be 
long-term 
key.  Around  45% 
unemployed  in  Austria  have  completed  no 
more than lower secondary school (see Annex 
14). In 2021, the employment rate of second-
generation  migrants  was  significantly  lower 
than  that  of  first-generation  migrants  and 
natives (26).  Additionally,  the  unemployment 
rate of people with a migration background is 
substantially higher than it is for natives. This 
is 
that 
educational and economic outcomes in Austria 
are  heavily  inherited.  To  break  this  link,  it  is 
necessary  to  make  available:  (i)  more  high-
quality  early  childhood  education;  (ii)  all-day 
schooling;  (iii)  strengthened  teacher  training; 
and (iv) better digital infrastructure. This could 
be 
individual 
mentoring in schools with a high percentage of 
disadvantaged  students.  To  integrate  recent 
migrants (that is, non-EU born residents living 
in  Austria  for  less  than  5  years)  authorities 
should  focus  on  making  German-language 
courses  more  accessible.  To  tackle  these 
challenges  and  to  reach  the  2030  national 
target on participation in adult learning, it will 
be  necessary  to  provide  sufficient  life-long 
learning  opportunities.  To  help  more  people 
into  work,  Austria’s  apprenticeship  system 
could  be  used  more  effectively  and  made 
more attractive.  

complemented  by  better 

(25)  See Eco Austria, Kosten des flächendeckenden Ausbaus 

der Kinderbetreuung in Österreich, Kurzanalyse, 
November 2021. 

(26)  See Eurostat data on activity rates by sex, age, 
migration status, citizenship and educational 
attainment level (LFSA_ARGANEDM). 

15 

it 

long-term 

trend  of 

increasing 
The 
numbers  of  older  workers  has  slowed 
down  significantly.  Due 
to  an  ageing 
population,  the  number  of  people  of  working 
age in Austria (that is, between the ages of 20 
and  65)  is  expected  to  fall  by  almost  268 
000 (27)  by  2040,  reducing  the  supply  of 
potential  workers.  Additionally,  the  rate  of 
older  workers  (i.e.  workers  aged  55-64  years) 
either  working  or  available  for  work  is  5.6 
percentage  points  below  the  EU  average (28). 
To keep the ageing population in the workforce 
is  becoming  more  and  more 
longer, 
important  to  adapt  employees’  tasks  to  their 
work-life  cycle  and  to  the  needs  of  ageing 
workers. In addition, the decision by workers to 
retire early also depends on the incentives set 
by the government. Further efforts to increase 
Austria’s 
effective 
therefore  of  special 
retirement  age  are 
importance. Currently, the effective retirement 
age  is  61.6  for  men  and 59.7 (29)  for  women, 
with  the  legal  retirement  age  at  65  for  men 
and progressively increasing to 65 for women 
until  2033 (30).  Reducing  some  of  the  high 
costs  on  employing  workers  –  in  particular 
older  workers  –  could  create  incentives  for 
older workers to stay in the workforce longer. 

comparatively 

low 

Reducing dependency on Russian 
fossil fuels by speeding up the 
green transition 

Austria  is  not  on  track  to  meet  its 
ambitious target of climate neutrality by 
2040.  In  addition,  reductions  in  greenhouse-
gas  emissions  so  far  are  not  on  a  trajectory 
compatible  with  binding  targets  to  reduce 
greenhouse-gas  emissions  in  sectors  outside 
the  EU  Emissions  Trading  System  by  48%  by 
(see  Annex  6).  Russia’s  war  of 
2030 

(27)  Eurostat (2023); EUROPO 203 – Population projections 

at national level 

(28)  See Eurostat data on Activity rates by age 

(TEPSR_WC160). 

(29)  This number includes pensioners that receive 

“Rehabilitationsgeld”, a rehabilitation allowance 

(30)  Source: Dachverband der Sozialversicherungsträger. 

 
                                                 
                                                 
aggression  in  Ukraine  and  the  energy  crisis 
that followed in 2022 have revealed a number 
of  weaknesses  in  Austria’s  energy-security 
system. Fixing these weaknesses represents a 
unique  opportunity  to  accelerate  the  green 
transition and reduce emissions.  

Graph 3.3: Gas imports from Russia vs. other 
sources 

interconnectors  with 

There  remains  scope  to  diversify  energy 
supplies.  One  of  the  ways  energy  supplies 
could be diversified is by evaluating the scope 
for 
neighbouring 
countries,  especially  for  additional  flexibility, 
reverse  flow  capacity,  and  securing  capacity 
for liquified natural  gas (LNG) transmission in 
neighbouring  countries.  In  addition,  it  will  be 
critically  important  for  Austria  to  support  the 
production  and  transmission  of  renewable 
gases, such as hydrogen, especially for sectors 
and  regions  vulnerable  to  supply  disruptions. 
Furthermore,  additional  sources  of  renewable 
energy,  such  as  geo-thermal  energy,  could  be 
further explored.  

to 

to 

to 

its 

and 

reduce 

companies 

subdued  demand  and 

remain 
Households 
heavily  reliant  on  fossil  fuels.  Austria  has 
managed 
natural-gas 
consumption by almost a fifth since mid-2022 
thanks 
the 
government’s  plan  to  reduce  gas  demand. 
However,  gas  still  remains  a  major  energy 
source  for  households  and  companies  (see 
Graph  3.3).  Gas  also  accounts  for  more  than 
23%  of  Austria’s  energy  consumption  and  is 
mostly  used  for  power  (32%  of  total  gas 
consumption),  heating  (21%  of  total  gas 
consumption)  and  industry  (40%  of  total  gas 
consumption)  (see  Annex  7).  Investment  in 
electrifying 
reduce 
industry  will  help 
reliance  on  fossil  fuels.  Targeted  investments 
in  the  electrification  of  industry  (chemicals, 
foods,  paper, 
textile,  machinery)  where 
equipment  is  commercially  available  (such  as 
boilers and heat pumps) could be accelerated. 
At the same time, the use of renewable gas to 
decarbonise  industrial  processes  that  rely  on 
high-temperature  heat  is  key  to  help  reduce 
gas demand and protect businesses from price 
volatility. While  energy prices have decreased, 
uncertainty  remains  regarding  next  winter, 
which requires continued efforts to structurally 
reduce  gas  demand.  Furthermore,  Austria 
remains  below 
the 
efficiency  of 
Improving 
resource  efficiency  in  general,  and  secondary 
raw-material  use  in  industry  in  particular,  will 
help  to  reduce  the  country’s  overall  resource 
dependency, in particular for fossil-fuel-based 
raw materials (See Annex 9). 

its  material  use. 

the  EU  average 

in 

Source: E-Control Austria, ENTSO-G 

last  winter,  gas  supplies 

The energy crisis has highlighted the need 
to  diversify  energy  supplies  and  reduce 
dependency  on  Russian  gas.  Despite  some 
progress  in  diversification  last  year,  Austria 
still  imported  57% (31)  of  its  gas  from  Russia 
in  2022,  compared  with  80%  in  2021,  while 
overall gas imports also decreased (see Figure 
3.3). Because Austria overshot its gas-storage 
to 
obligations 
households and companies were not at risk. As 
the 
part  of 
government  set 
for 
financial 
companies  to  import  non-Russian  gas  and 
created a strategic gas reserve of 20 terawatt 
hours  (TWh)  in  2022.  However,  significant 
energy-security 
For 
challenges 
example,  increased  gas  flows  from  Norway 
and  overseas  (by  booking  capacity  via  Italy 
and  Germany)  may  not  be  enough  to  end 
dependence  on  Russian  gas.  A  clear  path  for 
progressively phasing out Russian gas over the 
next few years has yet to be outlined. 

its  diversification  efforts, 
incentives 

persist. 

(31)  Source: AT Climate Ministry based on data by the 

regulator E-Control (tbc). 

16 

81798169726344382117387119211931283756627983622982737781100827358439664470102030405060708090100Jan-22Feb-22Mar-22Apr-22May-22Jun-22Jul-22Aug-22Sep-22Oct-22Nov-22Dec-22% of total gas imports in March 2022from Russiafrom other sources 
  
                                                 
Austria  remains  high  and  above  the  EU 
average for many regulated professions, such 
as  civil  engineers  which  are  important  for the 
green  transition 
(see  also  Annex  12  on 
Industry  and  Single  Market).  According  to  the 
Commission’s assessment of restrictiveness in 
selected  professional  services,  these  access 
barriers  and  restrictive  rules  include  specific 
shareholding requirements, extensive reserved 
activities and interdisciplinary restrictions. 

renewable-power 
in  network 

To  accommodate  the  planned  expansion 
generation, 
of 
investment 
infrastructure 
needs  to  be  stepped  up.  The  estimated 
investment  needs  in  this  area  are  EUR 18 
billion  (3.8%  of  GDP) to make the  network  fit 
for  100%  renewable  electricity  by  2030 (33). 
Additional efforts are needed to: (i) accelerate 
the  planning,  permitting  and  implementation 
of  projects  to  upgrade  and  expand  grid 
infrastructure;  and  (ii)  streamline  the  grid-
connection process to avoid the grid becoming 
a bottleneck for the energy transition. 

Energy-efficiency  savings  in  the  building 
sector and  in  industry are  key  to  further 
reduce  reliance  on  fossil  fuels.  Although 
Austria‘s  current  energy-efficiency  targets  for 
2030  fall  short  of  the  country’s  energy 
efficiency objectives under the EU’s ambitious 
‘Fit  for  55’ (34)  plan,  a  new  Energy  Efficiency 
Law  proposed  by  the  government  should 
address this issue. If adopted, the law foresees 
a 
energy 
consumption  by  18%  by  2030,  and  introduce 
other  vital  measures,  such  as  compulsory 
energy  audits  for  some  companies.  As  the 
second-largest  energy  consumer 
the 
country,  Austrian  industry  reduced  its  energy 
intensity  by  only  1.6%  in  2022,  in  line  with  a 
1.2%  reduction  seen  in  the  overall  economy. 
To  support  energy  efficiency,  the  Austrian 

reduction 

binding 

final 

in 

in 

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

(34)  Fit for 55 refers to the EU’s target of reducing net 

greenhouse gas emissions by at least 55% by 2030. 
The proposed package aims to bring EU legislation in 
line with the 2030 goal. One of its goals is also to ts 
main goal is to reduce final energy consumption at EU 
level by 11.7% in 2030. 

length  of  permitting  procedures 
The 
remains  a  stumbling  block  for  Austria’s 
green  transition,  but  initial  steps  to 
address  this  problem  have  been  taken. 
in  the  country 
industries 
Energy-intensive 
benefited from cheap and reliable gas imports 
in the past. However, competitiveness gains in 
the  future  will  come  from  speeding  up  the 
green  transition.  The  2021  Renewable  Energy 
Expansion  Act,  which  is  a  reform  included  in 
the  RRP,  has  strengthened  the  framework  for 
increasing  the  share  of  renewable  energy  in 
electricity  consumption.  The  Act  adds  27 TWh 
of  annual  electricity-generation 
capacity, 
contributing  to  Austria’s  efforts  to  ensure 
100%  renewable  electricity  consumption  by 
2030  (from  81%  in  2021).  There  remains 
scope  to  further  exploit  the  potential  of  wind 
power (which currently accounts for only 10% 
electricity  mix).  However, 
of  Austria’s 
investment  in  renewable  energy  continues  to 
be hampered by complex spatial-planning and 
permitting  procedures.  The  permitting  process 
for  wind  energy  infrastructure  currently  takes 
around  5  years  on  average,  which  is  well 
above  the  2  years  objective  included  in  the 
EU’s  Renewable  Energy  Directive (32).  These 
lengthy  procedures  are  partly  due  to  staffing 
problems  and  the  complex  division  of  powers 
between the federal and regional governments 
(including the lack of sectoral spatial zoning). A 
step  towards  speeding  up  these  procedures 
has  been  taken  through  the  adoption  of  a 
more  streamlined 
law  on  environmental 
impact  assessments.  Renewables  expansion 
would  also  benefit  from  putting  in  place 
dedicated  acceleration  areas  for  renewables 
(notably  for  wind)  with  particularly  short  and 
simple  permitting  procedures,  in  line  with  the 
for  55  package.  To 
Commission’s  Fit 
accelerate  the  transition  to  net-zero  and 
ensure  the  transition  is  fair,  there  are  two 
essential  policy 
(i)  upskilling  and 
reskilling  workers  for  the  green  transition, 
including  those  workers  most  affected  by  it; 
and  (ii)  promoting  inclusive  jobs  markets  (see 
Annex  8).  There  is  also  a  need  to  reduce 
in  professional 
barriers 
to 
in 
services,  as 

competition 
regulatory 

restrictiveness 

levers: 

(32)  EMBER study ‘Ready, Set, Go: Europe’s Race for Wind 

and Solar’ (July 2022). 

17 

 
                                                 
                                                 
replacement  of 

the  RRP  support 

government  included  a  number  of  incentives 
for companies to improve energy efficiency in 
its  various  energy-support  schemes  in  2022. 
Currently, there are around 1.78 million oil and 
gas  heating  systems  still  in  operation  in  the 
country (35). The long-term renovation strategy 
of  2020  aims  to  decarbonise  80%  of  the 
existing  building  stock  by  2050.  Various 
national  energy-efficiency  measures  and 
investments  under 
the 
renovation of buildings, thermal insulation, and 
the 
fossil-fuel  heating 
systems.  Yet  the  current  slow  pace  at  which 
buildings  are  thermically  renovated  will  need 
to  be  levelled  up.  The  proposed  Renewable 
Heating  Law  is  a  key  reform  under  the  RRP 
that  is  expected  to  speed  up  energy  savings 
and the decarbonisation of the building sector, 
and its timely implementation will be  decisive 
for  Austria’s  energy  efficiency  ambitions. 
Better  coordination  of  the  existing  support 
measures at federal and regional levels would 
facilitate  the 
implementation  of  Austria’s 
renovation goals. 

There  remains  further  scope  to  reduce 
emissions  by  promoting  sustainable 
mobility. Before 2020, emission reductions in 
the  energy  and  industrial  sectors  were  offset 
by  increases  in  the  final  energy  consumption 
of  buildings  and  the  transport  sector,  both  of 
which  have  significant  potential  to  reduce 
emissions  (see  Annex  6).  Austria  serves  as  a 
major  transit  country  for  transalpine  road 
freight.  Reducing  transport-related  emissions, 
while  also  tackling  transport  poverty  (see 
Annex  8),  will  be  particularly  crucial  for  the 
transition 
to  carbon  neutrality.  Although 
investment  in  sustainable  mobility  already 
makes  the  largest  contribution  to  the  climate 
target  in  the  RRP,  further  development  of 
mobility  solutions  and  alternatives  to  car  use 
is still warranted (for example local buses, car 
sharing,  and  promoting  cycling  and  walking). 
This  includes  solutions  aiming  at  connecting 
the  ‘last  mile’  to  public  transport  networks, 
especially in remote and rural areas.  

(35)  Impact assessment of the proposal for a law on 

renewable heating (Erneuerbare-Wärme-Gesetz, 2022). 

18 

 
                                                 
  improving  the  tax  mix  with  a  view  to 

increasing efficiency and fairness; 

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

  bringing  more 

low-skilled  people,  older 
workers  and  people  with  a  migrant 
background into employment; 

  increasing  the  level  of  basic  skills  for 
disadvantaged  people,  particularly  those 
with  a migrant background;  and  promoting 
skills needed for the green transition; 

  reducing  its  dependence  on  imports  of 
fossil  fuels,  and  in  particular  of  Russian 
gas,  by  diversifying  towards  non-Russian 
energy supplies; 

  accelerating  the  deployment  of  renewable 
energy, in particular by further streamlining 
permitting  procedures  (especially  for  wind 
power  generation  and  grid  infrastructure), 
and  by 
investing  in  the  required  grid 
upgrades  and  storage;  and  exploiting  the 
potential of renewable gases; 

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

  reducing emissions, notably in the transport 

sector. 

KEY FINDINGS 

The Austrian recovery and resilience plan 
includes measures to address a series of 
structural challenges through: 

  the  introduction  of  a  price  path  for  CO2 
emissions  in  non-ETS  sectors  and  related 
compensation measures in autumn 2022; 

  ongoing 

investments 

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

in 

  ongoing 

investments 

broadband 
infrastructure 
half 
of Austria’s households, the digitalisation of 
companies, and the further digitalisation of 
public administration; 

in 
reaches 

that 

  ongoing  investments  in  digital  equipment 
for pupils, high-quality early childhood care, 
and  measures  to  compensate  for  gaps  in 
learning caused by the pandemic; 

  ongoing investing in upskilling and reskilling 
measures  and  setting  up  a  one-stop  shop 
to  support  the  long-term  unemployed  in 
2022. 

  Austria 

the 

should 

continue 
its 

steady 
implementation  of 
recovery  and 
resilience  plan  and  swiftly  finalise  the 
REPowerEU  chapter  with  a  view  to  rapidly 
starting its implementation. 

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 systems; 

  reducing  the  complexity  of  the  fiscal 
framework  to  make  public  spending  more 
efficient; 

19 

 
 
ANNEXES 

 
 
 
 
 
 
 
 
 
LIST OF ANNEXES 

Cross-cutting indicators 

A1.  Sustainable Development Goals 

A2.  Progress in the implementation of country-specific recommendations 

A3.  Recovery and resilience plan - overview 

A4.  Other EU instruments for recovery and growth 

A5.  Resilience 

Environmental sustainability 

A6.  European Green Deal 

A7.  Energy security and affordability 

A8.  Fair transition to climate neutrality 

Productivity 

A9.  Resource productivity, efficiency and circularity 

A10.  Digital transformation 

A11.  Innovation 

A12.  Industry and single market 

A13.  Public administration 

Fairness 

A14.  Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

A15.  Education and training 

A16.  Health and health systems 

A17.  Economic and social performance at regional level 

Macroeconomic stability 

A18.  Key financial sector developments 

A19.  Taxation 

A20.  Table with economic and financial indicators 

A21.  Debt sustainability analysis 

26 

26 

28 

31 

33 

35 

36 

36 

41 

46 

49 

49 

51 

53 

55 

58 

60 

60 

63 

65 

67 

69 

69 

71 

73 

74 

23 

 
 
 
 
LIST OF TABLES 

Industry and Single Market 

A2.1. 
Summary table on 2019-2022 CSRs 
A3.1. 
Key elements of the Austria’s RRP 
A5.1. 
Resilience indices summarising the situation across RDB dimensions and areas 
A6.1. 
Indicators tracking progress on the European Green Deal from a macroeconomic perspective 
A7.1. 
Key energy indicators 
A8.1. 
Key indicators for a fair transition in Austria 
A9.1. 
Overall and systemic indicators on circularity 
A10.1.  Key Digital Decade targets monitored by DESI indicators 
A11.1.  Key innovation indicators 
A12.1. 
A13.1.  Public administration indicators 
A14.1.  Social Scoreboard for Austria 
A14.2.  Situation of Austria on 2030 employment, skills and poverty reduction targets 
A15.1.  EU-level targets and other contextual indicators under the European Education Area strategic framework 
A16.1.  Key health indicators 
A17.1.  Selected indicators at regional level - Austria 
A18.1.  Financial soundness indicators 
A19.1.  Taxation indicators 
A20.1.  Key economic and financial indicators 
A21.1.  Debt sustainability analysis - Austria 
A21.2.  Heat map of fiscal sustainability risks - Austria 

LIST OF GRAPHS 

Progress towards the SDGs in Austria in the last 5 years 
Austria’s progress on the 2019-2022 CSRs (2023 European Semester) 
Disbursements per pillar 
Total grants disbursed under the RRF 
Fulfilment status of milestones and targets 
Cohesion policy funds 2021-2027 in Austria: budget by fund 
Synergies between Cohesion policy funds and RRF six pillars in Austria 
Cohesion policy funds contribution to the SDGs in 2014-2020 and 2021-2027 in Austria 
Thematic – greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2021 
Energy mix (top) and electricity mix (bottom), 2021 
Thematic – environmental investment needs and current investment, p.a 2014-2020 
Underground storage levels in Austria 
Share of gas consumption per sector, 2021 
Gas consumption per industrial sector, 2021 (% of total industry gas consumption) 
Austria´s retail energy prices for industry (top) and households (bottom) 
Patent families in Energy Union R&I priorities 
Fair transition challenges in Austria 
Distributional impacts of energy prices due to rising energy expenditure (2021-2023) 
Trend in material use 
Treatment of municipal waste 

A1.1. 
A2.1. 
A3.1. 
A3.2. 
A3.3. 
A4.1. 
A4.2. 
A4.3. 
A6.1. 
A6.2. 
A6.3. 
A7.1. 
A7.2. 
A7.3. 
A7.4. 
A7.5. 
A8.1. 
A8.2. 
A9.1. 
A9.2. 
A11.1.  Employment in fast-growing enterprises in the top 50% most innovative sectors 
A12.1.  Real labour productivity per hour at industry level (EU=100) 
A12.2.  Business environment and productivity drivers 
A13.1. 
Indicators of regulatory policy and governance: stakeholder engagement 
A15.1.  Early leavers from education and training (age 18-24) by country of birth, 2022 (%) 
A16.1.  Life expectancy at birth, years 
A16.2.  Projected increase in public expenditure on healthcare over 2019-2070 
A17.1.  GDP per capita (2010) and GDP growth (2011-2020) in Austria 
A17.2.  Evolution of labour productivity in Austria 
A18.1.  Housing prices 
A19.1.  Tax revenues from different tax types as % of total taxation 
A19.2.  Tax wedge for single and second earners as a % of total labour costs, 2022 

24 

29 
31 
35 
36 
41 
46 
49 
52 
53 
57 
59 
60 
61 
64 
65 
67 
69 
71 
73 
75 
76 

27 
28 
31 
32 
32 
33 
33 
34 
36 
37 
38 
41 
42 
42 
43 
44 
46 
47 
49 
49 
53 
55 
56 
58 
63 
65 
65 
67 
67 
70 
72 
72 

 
 
25 

 
 
 
 
 
CROSS-CUTTING INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

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  and  the 
environmental crisis, 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 
below  is  based  on  the  EU  SDG  indicator  set 
developed  to monitor progress  on  the  SDGs  in  an 
EU context. 

SDG 

Austria  performs  well  or  is  improving  on 
to 
indicators 
most 
environmental  sustainability  (SDGs  2,  6,  9, 
11,  12,  13,  14),  but  it  is  moving  away  from 
SDG  15  (Life  on  land).  Historically,  Austria  has 

related 

performed  very  well  on  the  share  of  renewable 
energy  in  its  gross  final  energy  consumption.  It 
was  also  able  to  further  increase  this  share  from 
33.4% in 2016 to 36.4% in 2021, well above the 
European  average 
in  2021).  Various 
(21.8% 
measures in the recovery and resilience plan (RRP) 
aim  to  further  contribute  to  general  greenhouse 
gas  emission  savings  and  are  likely  to  positively 
affect  Austria’s  environmental 
sustainability. 
These measures include the eco-social tax reform 
and 
renewables,  energy 
in 
efficiency, zero-emission mobility and biodiversity. 
On  SDG  15  (Life  on  Land),  Austria  is  still  moving 
away  from  the  goal  due  to, 
in  particular, 
continuing  soil  sealing  (with  the  index  increasing 
from  103.3  in  2015  to  106.7  in  2018).  The 
biodiversity  strategy  Austria  published  since  then 
as well as the Biodiversity Fund enacted as part of 
the Austrian RRP will help address this lag). 

investment 

the 

While  Austria  generally  performs  well  or  is 
improving  on  SDG 
indicators  related  to 
fairness (SDGs 1, 2, 3, 5, 8, 10) , it still needs 

Graph A1.1: Progress towards the SDGs in Austria in the last 5 years 

For detailed datasets on the various SDGs, see the annual Eurostat report ‘Sustainable development in the European Union’; for 
details on extensive country-specific data on the short-term progress of Member States: Key findings - Sustainable development 
indicators - Eurostat (europa.eu). The status of each SDG in a country is the aggregation of all the indicators for the specific goal 
compared to the EU average. A high status does not mean that a country is close to reaching a specific SDG, but signals that it is 
doing better than the EU on average. The progress score is an absolute measure based on the indicator trends over the past 5 
years. The calculation does not take into account any target values as most EU policy targets are only valid for the aggregate EU 
level. Depending on data availability for each goal, not all 17 SDGs are shown for each country. 
Source: Eurostat, latest update of early April 2023, except for the EU Labour Force Survey (LFS) indicators released on 27 April 
2023. Data mainly refer to 2016-2021 or 2017-2022. 

26 

 
 
 
 
 
 
from 23.1% in 2016 to 26.5% in 2021 (EU: 23.2% 
in 2021). 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 therefore 
expected  to  also  contribute  to  some  extent  to 
Austria’s long-term macroeconomic stability.  

As the SDGs form an overarching framework, any 
links  to  relevant  SDGs  are  either  explained  or 
depicted with icons in the other annexes. 

(72.3% 

to  catch  up  on  those  for  Quality  education 
(SDG 4) and  Partnerships for the Goals  (SDG 
17).  Austria  performs  well  on  the  healthy  life 
years at birth indicator (SDG 3; 58.7 years in 2020 
compared to 58 years in 2015; EU average was 64 
years  in  2020)  and  on  the  percentage  of  the 
population  aged  16  and  above  with  good  or  very 
good  self-perceived  health 
in  2021 
compared  to  the  EU  average  of  69.5%).  In 
addition, Austria has improved on several fairness-
related  indicators  such  as  the  in-work  at-risk-of-
poverty  rate  (SDG  1;  7.5%  in  2021  compared  to 
8.3%  in  2016),  the  long-term  unemployment  rate 
(SDG  8;  2%  in  2021  compared  to  2.4%  in  2016; 
EU  average  of  2.8%).  On  SDG  4 
(Quality 
education), Austria increased the participation rate 
in early childhood education and care (for 3-to-5-
year-olds)  to  89.7%  in  2020  and  has  steadily 
increased  its  share  of  adults  with  a  tertiary 
qualification  from  40.3%  in  2017  to  43.1%  in 
for 
2022.  However, 
improvement  in  ensuring  equal  opportunities  in 
education,  particularly  for  disadvantaged  young 
people, and also in increasing gender equality and 
social  inclusion.  This  has  been  acknowledged  by 
several measures in the Austrian RRP targeted at: 
(i) access to education, training and upskilling; and 
(ii)  assistance  to  socially  disadvantaged  women. 
Regarding  Partnerships  for  the  Goals  (SDG  17), 
Austria  showed  limited  progress,  and  notably 
moved  away  from  the  improved  EU  average  on 
official development assistance. 

room 

there 

still 

is 

Austria  performs  well  or  very  well  on  most 
SDG  indicators  related  to  productivity  (SDGs 
8  and  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 SDG 8 (Decent 
work  and  economic  growth)  and  SDG  9  (Industry, 
innovation,  and  infrastructure).  With  3.2%  of  GDP 
allocated to  R&D  in  2021,  Austria  has  one  of the 
highest  levels  of  R&D  spending  in  the  EU.  The 
share  of  R&D  personnel  in  the  active  population 
rose  from  1.7%  in  2016  to  1.93%  in  2021  (EU: 
1.5%  in  2021).  Austria’s  RRP  contains  several 
measures  to  address  bottlenecks  in  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 

27 

 
 
ANNEX 2: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMENDATIONS 

Graph A2.1: Austria’s progress on the 2019-2022 
CSRs (2023 European Semester) 

The Commission has assessed the 2019-2022 
country-specific  recommendations  (CSRs) (36) 
addressed  to  Austria  as  part  of  the  European 
Semester. These recommendations concern a wide 
range of policy areas that are related to 11 of the 
17 Sustainable Development Goals (see Annexes 1 
and 3). The assessment considers the policy action 
taken by Austria to date (37) and the commitments 
in its recovery and resilience plan (RRP) (38). At this 
stage  of  RRP  implementation,  70%  of  the  CSRs 
focusing  on  structural  issues  from  2019-2022 
have recorded at least ‘some progress’, while 30% 
recorded  ‘limited  progress’  (see  Graph  A2.1).  As 
the  RRP  is  implemented  further,  considerable 
progress in addressing structural CSRs is expected 
in the years to come. 

Source: European Commission 

(36)  2022 CSRs: EUR-Lex - 32022H0901(20) - EN - EUR-Lex 

(europa.eu) 

      2021 CSRs: EUR-Lex - 32021H0729(20) - EN - EUR-Lex 

(europa.eu) 
2020 CSRs: EUR-Lex - 32020H0826(20) - EN - EUR-Lex 
(europa.eu) 
2019 CSRs: EUR-Lex - 32019H0905(20) - EN - EUR-Lex 
(europa.eu) 

(37)  Including policy action reported in the national reform 

programme and in Recovery and Resilience Facility (RRF) 
reporting (twice a year reporting on progress in implementing 
milestones and targets and resulting from the payment 
requests assessment). 

(38)  Member States were asked to effectively address all or a 

significant subset of the relevant country-specific 
recommendations issued by the Council in 2019 and 2020 in 
their RRPs. The CSR assessment presented here considers the 
degree of implementation of the measures included in the 
RRP and of those carried out outside of the RRP at the time 
of assessment. Measures laid down in the Annex of the 
adopted Council Implementing Decision on approving the 
assessment of the RRP, which are not yet adopted or 
implemented but considered credibly announced, in line with 
the CSR assessment methodology, warrant ‘limited progress’. 
Once implemented, these measures can lead to 
‘some/substantial progress or full implementation’, 
depending on their relevance. 

28 

Limited progress30%Some progress55%Substantial progress7%Full implementation8% 
 
                                                 
   
 
 
 
Table A2.1: Summary table on 2019-2022 CSRs 

(Continued on the next page) 

29 

AustriaAssessment in May 2023*RRP coverage of CSRs until 2026**Relevant SDGs2019 CSR 1Limited progressEnsure the sustainability of the health, Some progressRelevant RRP measures being implemented as of 2021 and planned as of 2022 and 2023. SDG 3long-term care, Limited progressRelevant RRP measures being implemented as of 2021. SDG 3and pension systems, including by adjusting the statutory retirement age in view of expected gains in life expectancy. Limited progressRelevant RRP measures being implemented as of 2020 and planned as of 2022.SDG 8Simplifyandrationalisefiscalrelationsandresponsibilitiesacrosslayersofgovernmentandalignfinancingandspendingresponsibilities.Limited progressRelevant RRP measures planned as of 2022. SDG 8, 162019 CSR 2Limited progressShift taxes away from labour to sources less detrimental to inclusive and sustainable growth. Some progressRelevant RRP measures being implemented as of 2021. SDG 8, 10, 12Support full-time employment among women, including by improving childcare services, Limited progressRelevant RRP measures planned as of 2023.SDG 4, 5, 8, 10and boost labour market outcomes for the low skilled in continued cooperation with the social partners. Limited progressRelevant RRP measures planned as of 2020.SDG 8, 10Raise the levels of basic skills for disadvantaged groups, including people with a migrant background.Limited progressRelevant RRP measures being implemented as of 2021 and planned as of 2025. SDG 4, 8, 102019 CSR 3Some progressFocus investment-related economic policy on research and development,  innovation, Some progressRelevant RRP measures being implemented as of 2021 and planned as of 2022 and 2024.SDG 9, 10, 11digitalisation,Some progressRelevant RRP measures planned as of 2021 and 2022.  SDG 9, 10, 11and sustainability, taking into account regional disparities. Some progressRelevant RRP measures being implemented as of 2020 and 2021 and planned as of 2022, 2023 and 2024. SDG 1, 7, 8, 9, 10, 11, 13Support productivity growth by stimulating digitalisation of businesses  and company growthSome progressRelevant RRP measures being implemented as of 2021 and planned as of 2022.  SDG 8, 9and by reducing regulatory barriers in the service sector.Limited progressRelevant RRP measures being implemented as of 2021. SDG 92020 CSR 1Some progressTakeallnecessarymeasures,inlinewiththegeneralescapeclauseoftheStabilityandGrowthPact,toeffectivelyaddresstheCOVID-19pandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuring debt sustainability, while enhancing investment. Not relevant anymoreNot applicableSDG 8, 16Improvetheresilienceofthehealthsystembystrengtheningpublichealth and primary care. Some progressRelevant RRP measures being implemented as of 2021 and planned as of 2022 and 2023. SDG 32020 CSR 2Some progressEnsure equal opportunities in educationSome progressRelevant RRP measures being implemented as of 2021 and planned as of 2025. SDG 4, 8, 10and increased digital learning. Some progressRelevant RRP measures being implemented as of 2020 and 2021. SDG 42020 CSR 3Some progressEnsure an effective implementation of liquidity and support measures, in particular for small and medium-sized enterprises,Substantial progressNot applicableSDG 8, 9and reduce administrative and regulatory burden.Some progressRelevant RRP measures being implemented as of 2021. SDG 8, 9Front-load mature public investment projects Some progressRelevant RRP measures being implemented as of 2021. SDG 8, 16and promote private investment to foster the economic recovery. Some progressRelevant RRP measures being implemented as of 2021. SDG 8, 9Focusinvestmentonthegreenanddigitaltransition,inparticularonbasic and applied research, as well as innovation,Some progressRelevant RRP measures being implemented as of 2021 and planned as of 2022 and 2024.SDG 9sustainable transport, Some progressRelevant RRP measures being implemented as of 2020 and 2021 and planned as of 2022.SDG 11clean and efficient production and use of energy. Some progressRelevant RRP measures planned as of 2021 and 2022.  SDG 7, 9, 132020 CSR 4Some progressMakethetaxmixmoreefficientandmoresupportivetoinclusiveandsustainable growth. Some progressRelevant RRP measures being implemented as of 2021. SDG 8, 10, 12 
 
 
 
 
 
  
 
Table (continued) 

Note: 
* See footnote (38). 
** RRP measures included in this table contribute to the implementation of CSRs. Nevertheless, additional measures outside the 
RRP are necesary to fully implement CSRs and address their underlying challenges. Measures indicated as ‘being implemented’ 
are only those included in the RRF payment requests assessed by the European Commission.  
Source: European Commission. 

30 

2021 CSR 1Substantial progressIn2022,maintainasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilienceFacility,andpreservenationallyfinancedinvestment.Keepthegrowthofnationallyfinanced current expenditure under control.Full ImplementationNot applicableSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainability in the medium term. Full ImplementationNot applicableSDG 8, 16At the same time, enhance investment to boost growth potential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenanddigitaltransition.Limited progressNot applicableSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainabilityofhealthand social protection systems for all.Limited progressNot applicableSDG 8, 162022 CSR 1Some progressIn 2023, ensure that the growth of nationally-financed primary current expenditure is in line with an overall neutral policy stance, taking into account continued temporary and targeted support to households and firms most vulnerable to energy price hikes and to people fleeing Ukraine. Stand ready to adjust current spending to the evolving situation. Substantial progressNot applicableSDG 8, 16Expand public investment for the green and digital transitions, and for energy security taking into account the REPowerEU initiative, including by making use of the Recovery and Resilience Facility and other Union funds.Substantial progressNot applicableSDG 8, 16 For the period beyond 2023, pursue a fiscal policy aimed at achieving prudent medium-term fiscal positions. Full ImplementationNot applicableSDG 8, 16Ensure the adequacy and fiscal sustainability of the long-term care system. Some ProgressRelevant RRP measures being implemented as of 2021. SDG 3Simplify and rationalise fiscal relations and responsibilities across layers of government and align financing and spending responsibilities. Limited ProgressRelevant RRP measures planned as of 2022.SDG 8, 16Improve the tax mix to support inclusive and sustainable growth.Some ProgressRelevant RRP measures being implemented as of 2021. SDG 8, 10, 122022 CSR 2Proceed with the implementation of its recovery and resilience plan, in line with the milestones and targets included in the Council Implementing Decision of 13 July 2021. Swiftly finalise the negotiations with the Commission of the 2021-2027 cohesion policy programming documents with a view to starting their implementation. 2022 CSR 3Limited ProgressBoost labour market participation of women, including by enhancing quality childcare services,Limited ProgressRelevant RRP measures planned as of 2023.SDG 4, 5, 8, 10 and improve labour market outcomes for disadvantaged groups.Limited ProgressRelevant RRP measures being implemented as of 2020 and planned as of 2025. SDG 8, 102022 CSR 4Some ProgressReduce overall reliance on fossil fuels, and diversify imports of fossil fuels,Some ProgressRelevant RRP measures being implemented as of 2020 and planned as of 2022. SDG 7, 9, 13 by accelerating the deployment of renewable energy and of the necessary infrastructure, in particular by simplifying planning and further streamlining permitting procedures,Some ProgressRelevant RRP measures being implemented as of 2020 and planned as of 2022. SDG 7, 8, 9, 13 and enhancing energy efficiency, in particular in the industry and building sectorsSome ProgressRelevant RRP measures being implemented as of 2021 and planned as of 2022. SDG 7 and diversifying energy supplies, as well as increasing flexibility and reverse-flow capacity of interconnections. Some ProgressRelevant RRP measures being implemented as of 2021. SDG 7, 9, 13RRP implementation is monitored by assessing RRP payment requests and analysing reports published twice a year on the achievement of the milestones and targets. These are to be reflected in the country reports. Progress on the cohesion policy programming documents is monitored under the EU cohesion policy. 
 
 
 
  
 
ANNEX 3: RECOVERY AND RESILIENCE PLAN - OVERVIEW 

The  Recovery  and  Resilience  Facility  (RRF)  is 
the centrepiece of the EU’s efforts to help it 
recover  from  the  COVID-19  pandemic,  speed 
up  the  twin  transition  and  strengthen 
resilience  against  future  shocks.  The  RRF 
also  contributes  to  implementation  of  the 
SDGs  and  helps  to  address  the  Country 
Specific  Recommendations  (see  Annex 4). 
recovery  and 
Austria  submitted 
(RRP)  on  30 April 2021.  The 
resilience  plan 
on 
Commission’s 
positive 
21 June 2021 
on 
and 
Council’s 
the  way  for  disbursing 
13 July 2021  paved 
EUR 3.46  billion  in  grants  under  the  RRF  over  the 
2021-2026 period.   

its  current 

assessment 

approval 

support  (net  of  pre-financing)  on  20 April 2023. 
The  related  44  milestones  cover  reforms  in 
sustainable 
efficiency, 
decarbonisation,  connectivity,  skills,  education, 
social  protection,  labour  market,  taxation  and 
public administration.   

mobility, 

energy 

Austria’s progress in implementing its plan is 
published  in  the  Recovery  and  Resilience 
Scoreboard (39).  The  Scoreboard  also  gives  an 
overview  of  the  progress  made  in  implementing 
the RRF as a whole, in a transparent manner. The 
graphs below show the current state of play of the 
milestones  and  targets  to  be  reached  by  Austria 
and  subsequently  assessed  as  satisfactorily 
fulfilled by the Commission. 

Table A3.1: Key elements of the Austria’s RRP 

Source: European Commission  

Since  the  entry 
into  force  of  the  RRF 
Regulation  and  the  assessment  of  the 
national  recovery  and  resilience  plans, 
geopolitical  and  economic  developments 
have caused major disruptions across the EU. 
In  order  to  effectively  address  these  disruptions, 
the  (adjusted)  RRF  Regulation  allows  Member 
States to amend their recovery and resilience plan 
for  a  variety  of  reasons.  In  line  with  article  11(2) 
of the RRF, the maximum financial contribution for 
Austria  was  moreover  updated  on  30  June  2022 
to an amount of EUR 3.75 billion in grants. Austria 
has not submitted its request for RRP amendment 
by the time of publication of this report. 

EUR 1.15 billion has so far been disbursed to 
Austria  under  the  RRF.  The  Commission 
disbursed  EUR 450  million  to  Austria  in  pre-
financing  in  28  September  2021,  equivalent  to 
13%  of  the  initial  financial  allocation.  Austria’s 
first  payment  request  was  positively  assessed  by 
the Commission, taking into account the opinion of 
the Economic and Financial Committee, leading to 
EUR  700  million  being  disbursed  in  financial 

(39)  https://ec.europa.eu/economy_finance/recovery-and-

resilience-scoreboard/country_overview.html 

31 

Initial RRPScope Initial planCID adoption date13 July 2021Total allocation EUR 3.46 billion in grants (0.87% of 2021 GDP)Investments and reforms 32 investments and 27 reforms Total number of milestones and targets171 
 
 
  
 
 
                                                 
 
Graph A3.1: Disbursements per pillar 

Note: Each disbursement reflects progress in the implementation of the RRF, across the six policy pillars. This graph displays how 
disbursements under the RRF (excluding pre-financing) relate to the pillars. The amounts were calculated by linking the milestones 
and targets covered by a given disbursement to the pillar tagging (primary and secondary) of their respective measures. 
Source: RRF Scoreboard https://ec.europa.eu/economy_finance/recovery-and-resilience-scoreboard/country_overview.html 

Graph A3.2: Total grants disbursed under the RRF 

Graph A3.3: Fulfilment status of milestones and 
targets 

Note: This graph displays the amount of grants disbursed so 
far under the RRF. Grants are non-repayable financial 
contributions. The total amount of grants given to each 
Member State is determined by an allocation key and the 
total estimated cost of the respective RRP. 
Source: RRF Scoreboard 
https://ec.europa.eu/economy_finance/recovery-and-resilience-
scoreboard/country_overview.html 

This graph displays the share of satisfactorily fulfilled 
milestones and targets. A milestone or target is satisfactorily 
fulfilled once a Member State has provided evidence to the 
Commission that it has reached the milestone or target and 
the Commission has assessed it positively in an implementing 
decision. 
Source: RRF Scoreboard 
https://ec.europa.eu/economy_finance/recovery-and-resilience-
scoreboard/country_overview.html 

32 

€ 1.15billionSatisfactorily fulfilledNot fulfilled0 mn20 mn40 mn60 mn80 mn100 mn120 mn140 mn160 mn180 mn200 mnGreen transitionDigitaltransformationSmart,sustainable andinclusive growthSocial andterritorialcohesionHealth, andeconomic,social andinstitutionalresiliencePolicies for thenext generation 
 
     
 
   
  
 
 
     
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

The  EU  budget  of  over  EUR  1.2  trillion  for 
2021-2027  is  geared  towards  implementing 
the  EU’s  main  priorities.  Cohesion  policy 
investment amounts to EUR 392 billion across the 
EU and represents almost a third of the overall EU 
budget, including around EUR 48 billion invested in 
line with REPowerEU objectives.   

Graph A4.1: Cohesion policy funds 2021-2027 in 
Austria: budget by fund 

transition.  Under  the  European  Social  Fund  Plus 
(ESF+),  Austria  allocates  EUR  128  million  to 
reducing  early  school 
leaving  and  promoting 
vocational education and training, and almost EUR 
115  million  to  combating  poverty  and  promoting 
inclusion. 

Of  the  investments  mentioned  above,  EUR 
459  million  will  be  invested  in  line  with 
REPowerEU objectives. This is on top of the EUR 
78  million  dedicated  to  REPowerEU  under  the 
2014-2020  budget.  In  both  periods,  investment 
will focus improving energy efficiency. 

Graph A4.2: Synergies between Cohesion policy 
funds and RRF six pillars in Austria 

(1) million EUR in current prices, % of total; (total amount 
including EU and national co-financing) 
Source: European Commission, Cohesion Open Data 

to 

the  next 

investments 

In  2021-2027,  in  Austria,  cohesion  policy 
funds (40)  will  invest  EUR  789  million  in  the 
green  transition  and  EUR  46  million  in  the 
digital  transformation  as  part  of  the 
country’s  total  allocation  of  EUR  2.9  billion. 
In  particular,  the  European  Regional  Development 
Fund  (ERDF) supports  targeted 
in 
research,  which  will  bring 
innovation  and 
businesses 
level  of  high-tech 
production,  boosting  productivity  and  resource 
efficiency.  The  ERDF 
is  expected  to  support 
approximately  1 770  firms  and  create  more  than 
1 600 jobs. More than a quarter of the ERDF funds 
are  dedicated  to  increasing  energy  efficiency, 
mainly  in  businesses,  but  also  in  communal 
infrastructure.  ERDF  support  will  contribute  to 
Austria’s  ambitious  objective  to  become  climate 
in  2040,  while  maintaining 
neutral  already 
industrial 
boosting 
and 
innovation.  In  the  areas  most  affected  by  the 
transition  to  a  carbon  neutral  economy,  the  JTF 
will  support  alternative  sustainable  economic 
activities  and  foster  job  creation,  strengthen  the 
regional  start-up  ecosystem  and  further  research 
and innovation projects to enable this transition. It 
will also promote the up- and reskilling of workers, 
helping  Austria  build  the  foundations  for  a  just 

competitiveness 

(40)  European Regional Development Fund (ERDF), European 
Social Fund+ (ESF+), Just Transition Fund (JTF), excluding 
Interreg programmes. The total amount includes national 
and EU contributions. Data source: Cohesion Open Data.  

33 

(1) million EUR in current prices (total amount, including EU 
and national co-financing)   
Source: European Commission  

In  2014-2020,  cohesion  policy  funds  made 
EUR 1.3 billion available to Austria (41), with an 
national 
absorption 
financing,  the  total  investment  amounts  to  EUR 
3.6 billion - around 0.1% of GDP for 2014-2020.  

of  84% (42). 

Including 

flexibility 

Austria  continues  to  benefit  from  cohesion 
policy 
support  economic 
to 
recovery,  step  up  convergence  and  provide 
vital support to regions following the COVID-
19  pandemic.  The  Recovery  Assistance  for 
Cohesion and the Territories of Europe instrument 
(REACT-EU) (43)  under  NextGenerationEU  provides 
EUR  278  million  on  top  of  the  2014-2020 
cohesion  policy  allocation  for  Austria.  REACT-EU 

(41)  Cohesion policy funds include the ERDF, ESF and the Youth 
Employment Initiative (YEI). ETC programmes are excluded 
here. Total amount includes national and EU contributions 
According to the ‘N+3 rule’, the funds committed for 2014-
2020 must be spent by 2023. REACT-EU is included in all 
figures. Data source: Cohesion Open Data. 

(42)  2014-2020 Cohesion policy EU payments by MS is updated 

daily on Cohesion Open Data.   

(43)  REACT-EU allocation on Cohesion Open Data. 

1,632 57%964 33%284 10%ERDFESF+JTF4542,0709387894686377723005001000150020002500Green transitionDigitaltransformationSmart, sustainableand inclusivegrowthSocial and territorialcohesionHealth, andeconomic, socialand institutionalresiliencePolicies for the nextgenerationEU CP 2014-2020 (million EUR)EU CP 2021-2027 (million EUR) 
 
   
                                                 
   
                                                 
 
 
Development),  contribute  to  the  European  Green 
Deal while ensuring long-term food security. They 
promote  social,  environmental  and  economic 
sustainability  and  innovation  in  agriculture  and 
rural  areas,  in  coordination  with  other  EU  funds. 
The European Maritime, Fisheries and Aquaculture 
Fund makes EUR 6.7 million available to Austria in 
2021-2027.  

from  other  EU 
Austria  also  benefits 
programmes,  notably  the  Connecting  Europe 
Facility,  which  under  CEF  2  (2021-2027)  has  so 
far  allocated  EU  funding  of  EUR  97.55  million  to 
eight  specific  projects  on  strategic  transport 
networks.  Similarly,  Horizon  Europe  has  so  far 
allocated  nearly  EUR  364  million  to  Austrian  R&I 
on  top  of  the  EUR  2  billion  earmarked  under  the 
previous  programme  (Horizon  2020).  The  Public 
Sector  Loan  Facility  set  up  under  the  Just 
Transition  Mechanism  makes  EUR  10.3  million  of 
grant  support  from  the  Commission  available  for 
projects  located  in  Austria  for  2021-2027,  which 
will  be  combined  with  loans  from  the  European 
Investment Bank to support investments by public 
sector entities in just transition regions.  

Austria 

Instrument 
designing 

The  Technical  Support 
(TSI) 
supports 
in 
and 
reforms, 
implementing  growth-enhancing 
including  those  set  out  in  its  recovery  and 
resilience  plan  (RRP).  Austria  has  received 
significant  support  since  2018.  Examples (45) 
include  for  developing  a  raw  material  accounting 
model,  which  should  help  secure  the  country’s 
supply of raw materials, and for implementing the 
European  Child  Guarantee  by  improving  staff 
working  conditions 
for  better  quality  early 
childhood education and care. 

for 

the 

future. 

investments 

funds  are  being  used  to  make  green,  digital  and 
In 
sustainable 
particular, these funds support SMEs, research and 
development,  energy  efficiency  and  renewable 
energies. They aim to secure more than 5 000 jobs 
in  Austria  and  support  around  1 400  Austrian 
firms.  To  tackle  educational  deficits  caused  by 
COVID-19, several projects were launched through 
additional budgetary resources of REACT-EU under 
the  ESF,  e.g.  on  combating  school  failure,  IT 
projects, video interpreting, basic training, retaking 
of 
school  examinations.  With  SAFE 
(Supporting  Affordable  Energy),  the  2014-2020 
cohesion  policy  funds  may  also  be  mobilised  by 
Austria to support vulnerable households, jobs and 
companies  particularly  affected  by  high  energy 
prices.  

final 

In both 2014-2020 and 2021-2027, cohesion 
policy  funds  have  contributed  substantially 
the  Sustainable  Development  Goals 
to 
(SDGs).  These  funds  support  7  of  the  17  SDGs, 
notably SDG 8 ‘Decent work and economic growth’ 
and SDG 9 ‘Industry, innovation, infrastructure’ (44).  

Graph A4.3: Cohesion policy funds contribution to 
the SDGs in 2014-2020 and 2021-2027 in Austria 

(1) 5 largest contributions to SDGs in million (EUR) current 
prices 
Source: European Commission  

Other  EU  funds  make  significant  resources 
available  for  Austria.  The  common  agricultural 
policy  (CAP)  made  EUR  11.1  billion  available  in 
2014-2022  and  will  continue  to  support  Austria 
with  EUR  6.1  billion  in  2023-2027.  The  two  CAP 
Funds  (European  Agricultural  Guarantee  Fund  and 
Rural 
European 

Agricultural 

Fund 

for 

(44)  Other EU funds contribute to the implementation of the 
SDGs, in 2014-2022 this includes both the European 
Agricultural Fund for Rural Development (EARDF) and the 
European Maritime and Fisheries Fund (EMFF).  

(45)  Country factsheets on reform support are available here. 

34 

1,55961922234148180671131428523002004006008001,0001,2001,4001,6001,800SDG 8 Decent workand economicgrowthSDG 9 Industry,innovation,infrastructureSDG 7 Affordableand clean energySDG 1 No povertySDG 4 QualityeducationEU CP 2014-2020 (millions EUR)EU CP 2021-2027 (millions EUR) 
   
                                                 
 
                                                 
ANNEX 5: RESILIENCE 

This  Annex 
illustrates  Austria’s  relative 
resilience capacities and vulnerabilities using 
the  Commission’s 
resilience  dashboards 
(RDB) (46).  Comprising  a  set  of  124  quantitative 
indicators,  the  RDB  provide  broad  indications  of 
Member  States’  ability  to  make  progress  across 
four interrelated dimensions: social and economic, 
green, digital, and geopolitical. The indicators show 
vulnerabilities (47)  and  capacities (48)  that  can 
become  increasingly  relevant,  both  to  navigate 
ongoing  transitions  and  to  cope  with  potential 
future shocks. To this end, the RDB help to identify 
areas  that  need  further  efforts  to  build  stronger 
and  more  resilient  economies  and  societies.  They 
in  Table  A5.1  as  synthetic 
are  summarised 
resilience 
illustrate  the  overall 
relative  situation  for  each  of  the  four  dimensions 
and their underlying areas for Austria and the EU-
27 (49). 

indices,  which 

According  to  the  set  of  resilience  indicators 
under  the  RDB,  Austria  generally  displays  a 
similar  level  of  vulnerabilities  compared  to 
the  EU  average.  Austria  shows  medium-high 
vulnerabilities  in  the  green  dimension,  medium 
vulnerabilities 
in  the  digital  and  geopolitical 
dimensions, and medium-low vulnerabilities in the 
social  and economic dimension of the RDB. It has 
higher  vulnerabilities  than  the  EU  average  in  the 
areas  ‘sustainable  use  of  resources’,  ‘ecosystems, 
biodiversity and sustainable agriculture’ as well as  
for 
‘security  and  demography’  and 
industry’.  Austria  has  relatively  low  vulnerabilities 
in relation to ‘inequalities and the social impact of 
the  transitions’ (50),  ‘health,  education  and  work’ 
and  the  digitalisation  of  the  personal  and  public 
space. 

‘digital 

(46)  For details see https://ec.europa.eu/info/strategy/strategic-
planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en; see also 2020 Strategic 
Foresight Report (COM(2020) 493). 

(47)  Vulnerabilities describe features that can exacerbate the 

negative impact of crises and transitions, or obstacles that 
may hinder the achievement of long-term strategic goals. 

(48)  Capacities refer to enablers or abilities to cope with crises 
and structural changes and to manage the transitions.  

(49)  This Annex is linked to Annex 1 on SDGs, Annex 6 on the 
green deal, Annex 8 on the fair transition to climate 
neutrality, Annex 9 on resource productivity, efficiency and 
circularity, Annex 10 on the digital transition and Annex 14 
on the European pillar of social rights. 

(50)  This is due to its low regional dispersion on household 

income, and lower than average AROPE and income quintile 
share ratio s80/s20. 

35 

indicators. 

Compared  to  the  EU  average,  Austria  shows 
an  overall  higher  level  of  capacities  across 
all  RDB 
It  has  medium-high 
capacities  in  the  social  and  economic,  the  digital 
the  geopolitical  dimensions  and  high 
and 
capacities  in  the  green  dimension.  Austria  shows 
stronger  capacities  than  the  EU  average  in  the 
areas 
impact  of  the 
transitions’ (51),  ‘economic  and  financial  stability 
and  sustainability’,  ‘sustainable  use  of  resources’, 
‘ecosystems, 
sustainable 
agriculture’, ‘digital for public space’, ‘raw material 
and  energy  supply’  as  well  as  ‘value  chains  and 
trade’.  There  is  room  for  improving  capacities 
compared to the EU in ‘financial globalisation’ and 
the digitalisation of the industry. 

‘inequalities  and  social 

biodiversity 

and 

Table A5.1: Resilience indices summarising the 
situation across RDB dimensions and areas 

(1) Data are for 2021, and EU-27 refers to the value for the 
EU as a whole. Data underlying EU-27 vulnerabilities in the 
area ‘value chains and trade’ are not available as they 
comprise partner concentration measures that are not 
comparable with Member States’ level values. 
Source: JRC Resilience Dashboards - European Commission 

(51)  Austria exhibits above average capacities in all indicators 

within this area. 

ATEU-27ATEU-27Vulnerabilities IndexHighMedium-highMediumMedium-lowLowNot availableCapacities IndexHighMedium-highMediumMedium-lowLowNot availableDimension/AreaVulnerabilitiesCapacitiesSocial and economicHealth, education and workInequalities and social impact of the transitionsGreenEconomic & financial stability and sustainabilitySustainable use of resourcesClimate change mitigation & adaptationDigitalEcosystems, biodiversity, sustainable agricultureDigital for industryDigital for personal spaceCybersecurityDigital for public spaceRaw material and energy supplyGeopoliticalValue chains and tradeFinancial globalisationSecurity and demography 
 
                                                 
 
  
 
                                                 
 
 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 6: EUROPEAN GREEN DEAL 

on 

several 

aspects 

Austria’s green transition requires continued 
action 
including 
promoting  renewable  energy  and  energy 
efficiency,  and  curbing  transport  emissions. 
Implementation  of  the  European  Green  Deal  is 
underway 
in  Austria;  this  Annex  provides  a 
snapshot of the key areas involved (52).  

Austria  has  not  yet  defined  all  the  climate 
policy  measures  it  needs  to  reach  its  2030 
target  for  the  effort  sharing 
climate 
sectors (53).  Data  for  2021  on  greenhouse  gas 
emissions  in  these  sectors  are  expected  to  show 
the country generated slightly less than its annual 
emission allocations (54). Current policies in Austria 
are  projected  to  reduce  these  emissions  by  17% 
relative  to  2005  levels  in  2030,  and  additional 
measures  were  tabled  to  reduce  emissions  by 
27%. This is not a sufficient reduction to reach the 
effort  sharing  target  even  before  the  target  was 
raised  in  line  with  the  EU’s  55%  objective,  let 
alone the new target  to reduce by 48% (55). In its 
recovery  and  resilience  plan  (RRP),  Austria  has 
allocated  58.7 %  of  its  Recovery  and  Resilience 

(52)  The overview in this Annex is complemented by the 

information provided in Annex 7 on energy security and 
affordability, Annex 8 on the fair transition to climate 
neutrality and environmental sustainability, Annex 9 on 
resource productivity, efficiency and circularity, Annex 11 on 
innovation, and Annex 19 on taxation. 

(53)  Member States’ greenhouse gas emission targets for 2030 
(‘effort sharing targets’) were increased by Regulation (EU) 
2023/857 (the Effort Sharing Regulation) amending 
Regulation (EU) 2018/842, aligning the action in the 
concerned sectors with the objective to reach EU-level, 
economy-wide greenhouse gas emission reductions of at 
least 55% relative to 1990 levels. The Regulation sets 
national targets for sectors outside the current EU Emissions 
Trading System, notably: buildings (heating and cooling), road 
transport, agriculture, waste, and small industry. Emissions 
covered by the EU ETS and the Effort Sharing Regulation are 
complemented by net removals in the land use sector, 
regulated by Regulation (EU) 2018/841 (the Land Use, Land 
Use Change and Forestry (LULUCF) Regulation) amended by 
Regulation (EU) 2023/839. 

(54)  Austria’s annual emission allocations for 2021 were some 
48.7 Mt CO2eq, and its approximated 2021 emissions were 
at 48.4 Mt (see European Commission, Accelerating the 
transition to climate neutrality for Europe’s security and 
prosperity: EU Climate Action Progress Report 2022, 
SWD(2022)343). 

(55)  See the information on the distance to the 2030 climate 

policy target in Table A6.1. Existing and additional measures 
as of 15 March 2021.  

Facility  grants  to  key  reforms  and  investments  to 
attain climate objectives (56).  

Graph A6.1: Thematic – greenhouse gas emissions 
from the effort sharing sectors in Mt CO2eq, 
2005-2021 

Source: European Environmental Agency. 

Austria  has  potential  to  boost  the  capacity 
of  its  land  use  sector  to  achieve  net  carbon 
removals. Austria’s forests achieve a major share 
of  net  carbon  removals  through  land  use.  For 
2030,  Austria’s  land  use,  land-use  change,  and 
forestry  (LULUCF)  target  implies  net  removals  of 
5 650 kt CO2eq  (see  Table  A6.5) (57).  In  2018 
Austria’s  land  use  sector  has  shifted  from  net 
removals to net emissions, but the trend has been 
reversed 
in  2019  with  net  removals  being 
achieved since 2020. 

In 2021, the share of renewables in Austria’s 
energy mix remained stable, second to fossil 
fuels  such  as  oil.  The  share  of  renewables 
(including  biofuels)  in  Austria’s  energy  mix  was 
34% of total energy consumption in 2021, second 
to  fossil  fuels  such  as  oil  (35%),  followed  by 
natural  gas  (23%)  and  solid  fossil  fuels  like  coal 
(8%).  The  country’s  energy  production  had  been 
coal-free since 2020. Austria’s national energy and 
climate  plan  (NECP)  sets  a  46-50%  target  of 
renewable 
final  energy 
consumption  by  2030,  which  was  considered  as 
adequate.  Austria  will  need  to 
its 
renewable  energy  target  in  the  updated  NECP,  to 

in  gross 

increase 

sources 

(56)  For example, investments in railways (new and 

electrification), green investments in enterprises, incl. zero 
emission mobility, emission-free buses, replacement of oil 
and gas heating, research in hydrogen, and emission-
reducing investments in installations under the EU Emissions 
Trading System.  

(57)  This value is indicative and will be updated in 2025 (as 

mandated by Regulation (EU) 2023/839). 

36 

010203040506020052021Domestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
 
 
                                                 
   
                                                 
 
 
reflect the more ambitious EU climate and energy 
targets  in  the  Fit  for  55  Package  and  in  the 
REPowerEU Plan. 

Graph A6.2: Energy mix (top) and electricity mix 
(bottom), 2021 

Austria’s  energy  efficiency  targets  for  2030 
were  assessed  as  of  low  ambition  and  will 
need to be strengthened to reflect the higher 
EU  targets  and  the  REPowerEU  Plan.  NECP 
targets  for  primary  and  final  energy  consumption 
(PEC  and  FEC)  were  considered  of  low  ambition, 
respectively in the 2020 Commission assessment. 
Based  on  the  energy  consumption  trajectory  for 
2018-2021,  Austria  is  expected  to  be  on  track  to 
meet its 2030 target for PEC and for FEC, as these 
were  notified  in  its  NECP (58).  As  for  the  energy 
savings  obligation  under  Article  7  of  the  Energy 
Efficiency  Directive,  Austria  has  substantially 
overachieved  the  required  cumulative  end-use 
energy savings for the period 2014-2020 by more 
than  double  (i.e.  198%).  Austria’s  recovery  and 
resilience plan fosters energy efficiency measures 
in residential buildings, such as thermal renovation 
and  energy  efficiency  of  residential  buildings, 
while  also  addressing  energy  poverty.  Austria 
hopes  to  improve  energy  efficiency  by  a  new 
energy efficiency law currently before parliament.  

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. 

is  a 

leader 

Austria 
in  terms  of  the 
renewables’  share  of the  electricity mix,  but 
still  needs  to  streamline  and  speed  up 
permitting  procedures.  81%  of  Austria’s 
electricity mix is composed by renewables, mainly 
from  hydropower  (60%),  followed  by  wind  (10%). 
Despite  a  recent  increase  in  solar  photovoltaic 
installations,  Austria 
significant 
investments in renewables to reach its objective of 
100% renewable electricity consumption by 2030. 
To ensure the effective deployment of renewables, 
including  those  investments  envisaged  in  the 
recovery and resilience plan, Austria should tackle 
administrative  and  procedural  bottlenecks  that 
result in long permitting procedures.  

still  needs 

from 

in  electrifying 

the  EU  average 

Greenhouse  gas  emissions 
road 
transport  have  been  increasing  since  2012 
(although they declined steeply during the COVID-
19  pandemic).  Austria  must  set  up  further 
incentives  to  shift  transport  to  rail.  It  performs 
above 
road 
transport  and  in  the  share  of  kilometres  of 
electrified  railway.  The  market  for  zero-emission 
road vehicles is also growing rapidly. Austria’s RRP 
contains  investments  and  reforms  on  sustainable 
mobility:  for  example,  it  introduced  the  National 
Emission  Trading  Scheme  (NEHG),  which  among 
others  targets  emissions  from  transport.  Still, 
more is needed to sizeably reduce greenhouse gas 
emissions in the sector.  

Austria would benefit from investing more in 
environmental  protection  to  reach  targets 
and  objectives (59).  Between  2014  and  2020, 
environmental  investment  needs  were  estimated 
to  be  at  least  EUR  4.6  billion  while  investment 

(58)  After the conclusion of the negotiations for a recast EED, 
including REPowerEU, the ambition of both the EU and 
national targets as well as of the national measures for 
energy efficiency to meet these targets is expected to 
increase. 

(59)  Environmental objectives include pollution prevention and 

control, water management and industries, circular economy 
and waste, biodiversity and ecosystems (European 
Commission, 2022, Environmental Implementation Review, 
country report Austria) 

37 

8%23%35%34%Solid fossil fuels, peatand oil shaleGasOilRenewables3%15%1%81%Solid fossil fuels, peatand oil shaleGasOilRenewables 
     
                                                 
stood at about EUR 2.3 billion, leaving a gap of at 
least  2.3  billion,  per  year  (see  Graph  A6.3) (60). 
29%  of  Austria’s  territory  consists  of  protected 
areas,  but  sufficient  resources  are  yet  to  be 
dedicated  to  their  protection  and  management, 
including  forests  with  one  third  of  the  protected 
forests  being  in  an  advanced  state  of  decay  or 
overaged (61). 
in 
conservation  and  restoration,  the  status  of  many 
habitats  and  species  continues  to  deteriorate. 
Austria  has  set  up  a  dedicated  biodiversity  fund, 
with EUR 50 million from its RRP. The investment 
needed  to implement  the EU  biodiversity  strategy 
in  Austria  is  estimated  at  EUR  990  million  until 
2030 (62). 

improvements 

Despite 

Graph A6.3: Thematic – environmental investment 
needs and current investment, p.a 2014-2020 

Source: European Commission. 

is 

increasingly  affecting 
Climate  change 
Austria.  Associated  damages  and  losses  are 
projected to rise from about EUR 2 billion per year 
at present to at least EUR 3-6 billion in 2030 and 
EUR 6-12  billion  by  2050 (63).  More  frequent  and 
extreme  weather  events  like  heatwaves,  droughts 
or  floods  require  substantial  additional  action  on 
in  sectors  such  as  human  health, 
adaption 

(60)  When also accounting for needs estimated at EU level only 

(e.g., water protection, higher circularity, biodiversity 
strategy).  

(61)  Klimafitness der Wälder muss gezielt gefördert werden - 

Rechnungshof Österreich. 

(62)  European Commission, 2022, Biodiversity financing and 

tracking. 

infrastructure,  construction,  transport,  forestry, 
agriculture, (hydro)energy, and tourism. Building on 
recent  progress,  there  remains  a  significant  need 
for 
further  action  and  mainstreaming  on 
adaptation. Austria’s RRP includes one measure to 
cool  urban  centres  by  means  of  operational 
thermal renovation and façade greening. Austria is 
subject  to  medium-high  flood  and  wildfire  risks, 
with  a  non-negligible  insurance  protection  gap, 
which calls for monitoring.  

initial  assessment, 

Austria  provides  fossil  fuel  and  other 
environmentally harmful subsidies that could 
be  considered  for  reform,  while  ensuring 
food  and  energy  security  and  mitigating 
social  effects.  Fossil  fuel  subsidies  in  Austria 
in  2020. 
to  EUR  305  million 
amounted 
Environmentally  harmful  subsidies  have  been 
identified,  via  an 
in  the 
agriculture,  forestry  and  fishing,  electricity,  gas, 
steam  and  air  conditioning,  transportation  and 
storage,  manufacturing  and  construction  sectors. 
Examples  of  such  subsidies  include  company  car 
tax  benefits,  the  reduced  VAT  rate  for  fertilisers 
and  pesticides  or  the  refund  scheme  for  energy-
intensive  industry  under  conditions (64).  A  recent 
study  by  WIFO,  a  research  institute,  puts  the 
amount of subsidies harmful to the climate at EUR 
4.1 to 5.7 billion a year, with 60% in the transport 
sector (65).  The  study  had  been  commissioned  by 
the  ministry  of  climate  and  was  discussed  in  the 
parliament. 

taxes 

Austria  has  the  potential  to  rely  more  on 
environmental 
encourage 
sustainability.  Energy  and  transport  taxation 
contribute  57%  and  41% respectively  to  Austria’s 
revenue 
taxation,  while 
pollution or resource taxes (2%) are negligible. The 

from  environmental 

to 

(64)  Fossil fuel figures in EUR of 2021 from the 2022 State of 

the Energy Union report. Initial assessment of 
environmentally harmful subsidies done by the Commission 
in the 2022 toolbox for reforming environmentally harmful 
subsidies in Europe, using OECD definitions, and based on the 
following datasets: OECD Agriculture Policy Monitoring and 
Evaluations; OECD Policy Instruments for the Environment 
(PINE) Database; OECD Statistical Database for Fossil Fuels 
Support; IMF country-level energy subsidy estimates. Annex 4 
of the toolbox contains detailed examples of subsidies on 
the candidates for reform. 

(63)  Zweiter Fortschrittsbericht zur österreichischen Strategie zur 

Anpassung an den Klimawandel, 2021. 

(65)  Wirtschaftsforschungsinstitut 2022: Analyse 
klimaproduktiver Subventionen in Österreich. 

38 

1748495395132231.0619691.2479932970,0200,0400,0600,0800,01000,01200,01400,0Pollutionprevention andcontrolWater (industries,excl. protection)Circular economy(incl. waste)Biodiversity andecosystemsR&I&D and otherEUR million (at current prices)Current investmentTotal need 
       
                                                 
                                                 
new  circular  economy  strategy (66)  envisages 
assessing  ways  to  encourage  the  use  of  fewer 
resources  and  decrease  Austria’s  very  high 
consumption  footprint  via  taxation.  Even  after 
enacting  the  eco-social  tax  reform,  these  rates 
could  be  further  increased,  to  further  encourage 
environmentally friendly behaviour. 

(66)  Bundesministerium für Klimaschutz: Österreich auf dem Weg 

zu einer nachhaltigen und zirkulären Gesellschaft. Die 
österreichische Kreislaufwirtschaftsstrategie, 2022. 

39 

 
                                                 
Table A6.1: Indicators tracking progress on the European Green Deal from a macroeconomic perspective 

Sources: (1) Historical and projected emissions, as well as Member States’ climate policy targets and 2005 base year emissions 
under the Effort Sharing Decision (for 2020) are measured in global warming potential (GWP) values from the 4th Assessment 
Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ climate policy targets and 2005 base 
year emissions under the Effort Sharing Regulation (for 2030) are in GWP values from the 5th Assessment Report (AR5). The 
table above shows the base year emissions 2005 under the Effort Sharing Decision, using AR4 GWP values. Emissions for 2017-
2021 are expressed in percentage change from 2005 base year emissions, with AR4 GWP values. 2021 data are preliminary. The 
table shows the 2030 target under Regulation (EU) 2023/857 that aligns it with the EU’s 55% objective, in percentage change 
from 2005 base year emissions (AR5 GWP). Distance to target is the gap between Member States’ 2030 target (with AR5 GWP 
values) and projected emissions with existing measures (WEM) and with additional measures (WAM) (with AR4 GWP values), in 
percentage change from the 2005 base year emissions. Due to the difference in global warming potential values, the distance to 
target is only illustrative. The measures included reflect the state of play as of 15 March 2021.  
(2) Net removals are expressed in negative figures, net emissions in positive figures. Reported data are from the 2023 
greenhouse gas inventory submission. 2030 value of net greenhouse gas removals as in Regulation (EU) 2023/839 
amending Regulation (EU) 2018/841 (LULUCF Regulation) – Annex IIa, kilotons of CO2 equivalent, based on 2020 submissions. 
(3) Renewable energy and energy efficiency targets and national contributions are in line with the methodology established under 
Regulation (EU) 2018/1999 (Governance Regulation).  
(4) Percentage of total revenue from taxes and social contributions (excluding imputed social contributions). Revenue from the EU 
Emissions Trading System is included in environmental tax revenue.  
(5) Expenditure on gross fixed capital formation for the production of environmental protection services (abatement and 
prevention of pollution) covering government, industry, and specialised providers.  
(6) European Commission, Study on energy subsidies and other government interventions in the European Union, 2022 edition.  
(7) The climate protection gap refers to the share of non-insured economic losses caused by climate-related disasters. This 
indicator is based on modelling of the current risk from floods, wildfires and windstorms as well as earthquakes, and an 
estimation of the current insurance penetration rate. The indicator does not provide information on the split between the 
private/public costs of climate-related disasters. A score of 0 means no protection gap, while a score of 4 corresponds to a very 
high gap (EIOPA, 2022).  
(8) Sulphur oxides (SO2 equivalent), ammonia, particulates < 10 µm, nitrogen oxides in total economy (divided by GDP).  
(9) Battery electric vehicles (BEV) and fuel cell electric vehicles (FCEV). 

40 

2030200520172018201920202021target/valueWEMWAMGreenhouse gas emission reductions in effort sharing sectors (1)MTCO2 eq; %; pp56,8-9%-11%-12%-18%--48%-31-21Net carbon removals from LULUCF (2)kt CO2eq-18.418-3.2494.9212.132-5.222-10.402-5650n/an/a200520172018201920202021Share of energy from renewable sources in gross final consumption of energy (3)%24%33%34%34%37%36%46-50%Energy efficiency: primary energy consumption (3)Mtoe32,732,831,832,329,831,628.7-30.8Energy efficiency: final energy consumption (3)Mtoe27,928,527,928,326,127,824.0-25.6201620172018201920202021201920202021Environmental taxes (% of GDP)% of GDP2,32,42,32,32,12,22,42,22,2Environmental taxes (% of total taxation) (4)% of taxation 5,65,75,45,45,05,05,95,65,5Government expenditure on environmental protection% of total exp.0,80,70,80,80,70,81,71,61,6Investment in environmental protection (5) % of GDP0,20,30,40,4--0,40,4-Fossil fuel subsidies (6)EUR2021bn0,40,30,30,30,3-53,050,0-Climate protection gap (7) score 1-42,01,61,5Net greenhouse gas emissions1990 = 100101,0106,0102,0104,094,099,076,069,072,0Greenhouse gas emission intensity of the economykg/EUR'100,230,230,220,220,21-0,310,300,26Energy intensity of the economykgoe/EUR'100,110,110,100,100,10-0,110,11-Final energy consumption (FEC)2015=100102,1103,7101,2103,095,0101,1102,994,6-FEC in residential building sector2015=100104,2104,998,5100,7105,0115,6101,3101,3106,8FEC in services building sector2015=10097,8106,4104,1106,498,0104,7100,194,4100,7Smog-precursor emission intensity (to GDP) (8)tonne/EUR'100,470,470,450,460,43-0,930,86-Years of life lost due to air pollution by PM2.5per 100.000 inh.496,0496,9591,3429,4343,6-581,6544,5-Years of life lost due to air pollution by NO2per 100.000 inh.168,3162,9145,2121,388,0-309,6218,8-Nitrates in ground watermg NO3/litre22,822,521,921,821,1-21,020,8-Land protected areas% of total27,728,1-28,128,829,226,226,426,4Marine protected areas% of total------10,7-12,1Organic farming% of total utilised agricultural area21,323,424,125,325,7-8,59,1-201720182019202020212022202020212022Share of zero-emission vehicles (9)% in new registrations1,52,02,86,413,914,95,48,910,7Number of AC/DC recharging points (AFIR categorisation)---95491708321566188626330028432518Share of electrified railways%71,871,972,1n/an/a72,556,6n/a56,6Hours of congestion per commuting driver per year27,227,227,227,2n/an/a28,7n/an/aMobility'Fit for 55'DistanceProgress to policy targetsNational contribution to 2030 EU targetAustriaEUFiscal and financialindicatorsEnergyPollutionBiodiversityClimate 
 
   
 
ANNEX 7: ENERGY SECURITY AND AFFORDABILITY 

sources, 

consumption 

Before  Russia  invaded  Ukraine,  Austria’s 
exposure  to  Russian  gas  was  very  high 
(roughly  80%  in  2020,  well  above  the  EU 
average of 44% (67). Austria still imports gas 
from  Russia  and  its  dependency  throughout 
2022  fluctuated  substantially (68)  based  on 
factors  such  as  availability  from  other  non-
Russian 
of 
neighbouring  countries,  etc.  Austria  is  also 
highly dependent on imported fossil fuels (69% in 
2021),  making  its  economy  particularly  sensitive 
to  global  price  developments,  requiring  it  to  step 
up efforts on the energy transition. This Annex (69) 
sets  out  actions  carried  out  by  Austria  to  achieve 
the  REPowerEU  objectives,  including  through  the 
implementation of its recovery and resilience plan, 
improve  energy  security  and 
in  order 
affordability  while  accelerating  the  clean  energy 
transition,  and  contributing  to  enhancing  the  EU’s 
competitiveness in the clean energy sector (70).  

to 

it 

Austria  biggest  challenge  lies  ahead,  next 
winter  2023/24,  as 
still  depends 
significantly on Russian gas. Austria fulfilled its 
gas  storage  obligations 
last  winter  reaching 
93.07%  by  1  November  2022  (more  than  10 
percentage  points  above  its  legal  obligation)  and 
ended the heating season with a filling storage at 
66.61%  by  15  April  2023 (71).  Austria  operates  9 
underground  storage  facilities (72)  with  a  total 

(67)  Eurostat (2020), share of Russian imports over total imports 
of natural gas. For the EU-27 average, the total imports are 
based on extra-EU-27. 

(68)  https://energie.gv.at/  

(69)  It is complemented by Annex 6 as the European Green Deal 
focuses on the clean energy transition, by Annex 8 on the 
actions taken to mitigate energy poverty and protect the 
most vulnerable ones, by Annex 9 as the transition to a 
circular economy will unlock significant energy and resource 
savings, further strengthening energy security and 
affordability, and by Annex 12 on industry and single market 
complementing ongoing efforts under the European Green 
Deal and REPowerEU. 

(70)  In line with the Green Deal Industrial Plan COM(2023) 62 
final, and the proposed Net-Zero Industry Act COM(2023) 
161 final 

(71)  Regulation of the European Parliament and of the Council 
amending Regulations (EU) 2017/1938 and (EC) No 
715/2009 with regard to gas storage and Implementing 
Regulation (EU) 2022/2301 of 23 November 2022 setting 
the filling trajectory with intermediary targets for 2023 for 
each Member State with underground gas storage facilities 
on its territory and directly interconnected to its market area 

(72)  Austria’s underground storage facilities are managed by 5 

operators: Astora (UGS Haidach), OMV Gas Storage 

capacity  of  around  8.4  billion  cubic  metres (bcm), 
covering all domestic demand. Gas initially flowed 
from  east  to  west,  from  Russia  through  Slovakia 
and to Italy, Hungary and Germany. Some of those 
initial  flows  have  reversed,  with  gas  now  flowing 
from  Germany  and  Italy.  Austria  produces  gas 
domestically,  covering  around  10%  of  its  annual 
domestic  demand,  but  with  no  real  potential  to 
increase this in the short term.  

Graph A7.1: Underground storage levels in Austria 

Source: JRC calculation based on AGSI+ Transparency 
Platform, 2022 (Last update 2 March 2023) 

is 

in 

(35%),  Austria 

Unlike 
its  overall  energy  mix  where 
renewables come second (34%) to oil and oil 
products 
in 
leading 
its 
renewable  electricity,  with  81%  of 
electricity  mix  consisting  of  renewables  in 
2021,  before  natural  gas  with  15%.  The 
challenge  lies  in  the  diversification  away  from 
hydropower, which has limited potential to expand. 
60%  of  Austria’s  electricity  mix  is  based  on 
hydropower, followed by wind and biomass playing 
in  comparison  (10%  and  5% 
a  minor  role 
respectively).  Electricity  production  has  been 
almost coal-free since 2020, with a marginal 0.2% 
in 2021. 

Austria  is  implementing  energy  efficiency 
measures,  including  demand  response,  to 
reduce  further  its  reliance  on  gas.  Austria 
expects  to  improve  in  energy  efficiency  by  a  new 
energy  efficiency law  currently before  parliament. 
The  law  includes  public  financial  support  of  an 
annual  budget of EUR 190 million until  2030 and 
a  federal  government´s  savings  obligation  that 
corresponds to an annual renovation rate of 3%. It 
aims  to  reduce  final  energy  consumption  by  18% 

(Tallesbrunn & Schönkirchen/Reyersdorf), RAG Energy Storage 
(Puchkirchen/Haag, Aigelsbrunn, Haidach 5, 7Fields-RAG, 
Haidach) and Uniper Energy Storage (UGS 7 Fields). 

41 

 
 
                                                 
 
 
                                                                              
 
 
could 

For  gas,  to  reduce  structurally  its  dependency  on 
further 
Russia,  Austria 
investments  in  the  interconnection  capacity  with 
Italy  and  Germany,  to  allow  higher  bidirectional 
flows  while  avoiding  these  gas  infrastructure 
projects becoming stranded assets.  

reflect 

on 

Graph A7.3: Gas consumption per industrial sector, 
2021 (% of total industry gas consumption) 

its  EU  target. 

by  2030  and  exceed 
In  the 
meantime,  Austria  implemented  energy  efficiency 
measures  to  contribute  to  energy  security  and 
were targeted mainly to households, industry, and 
the public sector. The first two ones are among the 
biggest  gas  consumers  in  Austria  in  2021  (Graph 
A7.1 and Graph A7.2 per industry). The prescribed 
measures  were  diverse  in  nature  and  went  from 
gas  savings  campaigns,  setting  binding  goals  for 
incentives  for 
the  public  sector, 
households, 
and 
associations,  and  supporting  fuel  switching  for 
industry  as  well  as  diversification  of  natural  gas 
purchases  and  energy  efficiency  improvement 
measures.  Over  the  period  August  2022  –  March 
2023, 19% of gas consumption has been saved in 
Austria compared to the previous 5-years average, 
following  the  adoption  of  Council  Regulation  (EU) 
2022/1369 on gas demand reduction.  

companies,  municipalities 

introducing 

Graph A7.2: Share of gas consumption per sector, 
2021 

Source: Eurostat 

three  major 

In  2022,  the  Austrian  federal  government 
presented 
relief  packages 
amounting to over EUR 30 billion.  Austria has 
taken  ambitious  measures  to  protect  households, 
small and medium-sized enterprises and industries 
against  increasing  energy  prices  (see  Annex  8). 
include  electricity  price  subsidies  for 
These 
household  customers  and  subsidies  for 
low-
income households. In 2022, Austria implemented 
measures  such  as  lump  sum  payments  for  low-
income  households,  others  supporting  solar  PV, 
wind  and  storage  deployment,  and  a  90%  cut  in 
natural gas and electricity tariffs until June 2023. 
It  introduced  a  EUR  1.1  billion  scheme  to  support 
companies  facing  higher  energy  costs  in  the 
context  of  Russia’s  invasion  of  Ukraine (73).  In 
January  2023 (74),  under  the  State  aid  temporary 
crisis 
the  European  Commission 
approved  for  the  first  time  a  EUR  100  million 
measure to reduce peak electricity consumption. 

framework, 

https://ec.europa.eu/commission/presscorner/detail/en/I

P_22_6994  

https://ec.europa.eu/commission/presscorner/detail/en/i

p_23_127  

(73)

(74)

42 

Source: Eurostat 

and 

grid 

further 

investment 

electricity, 

Without 
infrastructure 
expansion to accommodate a higher share of 
improved 
renewable 
interconnection  for  cross-border  electricity 
flows, Austria would not manage to generate 
100%  of 
its  electricity  from  renewable 
energy  sources  in  2030.  It  needs  to  consider 
increasing 
transmission  and 
distribution  grids  and  storage  (large  storage 
could  be 
batteries  and  hydropower).  This 
the 
implementation  of 
timely 
supported  by 
following 
interconnection  Projects  of 
Common  Interest  (PCI):  i)  between  St  Peter  and 
Tauern;  ii)  between  Westtirol  and  Zell-Ziller,  and 
the  PCI  cross-border  project  between  St  Peter  in 
Austria and Isar in Germany. The latter started the 
construction  beginning  of  March  2023  and  the 
commissioning is planned for 2027.  

internal 

in 

32.0%39.5%2.3%4.9%21.1%0.3%EnergyIndustryTransportServices and public sectorHouseholdsAgriculture, forestry andfishery0.0%5.0%10.0%15.0%20.0%25.0%30.0%Iron and steelChemical and petrochemicalNon-ferrous metalsNon-metallic mineralsTransport equipmentMachineryMining and quarryingFood, beverages and tobaccoPaper, pulp and printingWood and wood productsConstructionTextile and leather 
     
     
                                                 
 
 
Graph A7.4: Austria´s retail energy prices for 
industry (top) and households (bottom) 

major  energy  transition  projects,  have  yet  to  be 
seen. 

Austria is in a strong position on hydropower, 
heat  pumps,  redox  flow  batteries  and 
In  the  years  2015-2019,  pumped 
biofuels. 
hydropower  capacity  additions  in  the  EU  were 
mainly  developed  in  Portugal,  Austria,  Italy  and 
France.  Between  2020  and  2021,  the  European 
countries  with  the  highest  added  hydropower 
capacity  were  Norway  (+396  MW)  and  Austria 
(+150  MW).  With  a  share  of  total  electricity 
generation  of  60%,  Austria  is  leading  in  the  EU 
(also in terms of turnover, with EUR 2.85 billion in 
2018) and is ranked second with 11.9% of global 
exports  (i.e.  EUR  70  million  net  trade)  in  the 
hydropower  sector  in  2020 (77)  (only  second  to 
China  with  18.6%).  It  is  in  the  top  four  EU 
countries  filing  patents  for  pumped  hydropower 
storage.  It  also  hosts  over  10%  of  all  EU-based 
hydropower  companies.  It  ranks  relatively  high 
(eighth)  in  the  EU,  with  a  total  of  8  heat  pump 
manufacturing  sites.  With  CellCube,  it  is  in  the 
global  top  three  redox  flow  battery  producers, 
together with Japan (Sumitomo Electric Industries 
Ltd.) and the US (UniEnergy Technologies). It ranks 
seventh in EU in biofuel production capacity. 

In  Austria,  labour  shortages  in  clean  energy 
relevant  manufacturing  industry  are  below 
the  EU  average (78).  In  total  the  EU  has  1.24 
million  jobs  in  the  renewable  energies  sector  in 
2022 (79)  which 
in  relation  to  total  working 
population  in  the  EU (80)means  an  average  of 
0,67%  of  all  jobs  are  in  the  RES  sector  while  in 
2021  Austria  had  a  total  of  31.000 (81)  people 
working  in  the  renewable  energy  sector,  which 
represents 0,8% of all jobs (82).  It is in the EU top 

(77)  https://www.irena.org/Publications/2022/Sep/Renewable-
Energy-and-Jobs-Annual-Review-2022   Fig 8, p.23: 

(78)  JRC data 

(79)  https://www.irena.org/Publications/2022/Sep/Renewable-

Energy-and-Jobs-Annual-Review-2022  

(80)  189 Million in 2021: https://ec.europa.eu/eurostat/statistics-

explained/index.php?title=Employment_-
_annual_statistics#:~:text=In%202021%2C%20the%20shar
e%20of,in%20the%20remaining%208%20countries. 

(81)  https://www.irena.org/Data/View-data-by-

topic/Benefits/Renewable-Energy-Employment-by-Country  

(82)  There are 8 932 664 people living in Austria (as of 2021), 

and 3 770 600 people were employed: 
https://eures.ec.europa.eu/living-and-working/labour-market-
information/labour-market-information-

(1) For industry: the band consumption is ID for electricity and 
I4 for gas 
(2) For households, the band consumption is DC for electricity 
and D2 for gas  
Source: Eurostat 

lengthy 

overcoming 

Austria  has  high  ambitions  to  transform  its 
energy  system,  aiming  to  generate  100%  of 
its  electricity  from  renewable  sources  by 
implementation, 
2030.  More  effective  policy 
including 
permitting 
procedures,  could  accelerate  the  decarbonisation 
of 
the  economy.  Austria’s  deployment  of 
renewable  energy  reached  a  total  of  23.4  GW  in 
2022,  increasing  by  6%,  compared  to  2021 (75). 
Solar  PV  has  seen  a  sharp  increase  in  its  annual 
capacity additions, almost 30% increase, from 2.8 
GW  in  2021  to  3.5  GW  in  2022 (76).  The  timely 
implementation of the investments and reforms in 
the  Austrian  recovery  and  resilience  plan  will 
contribute  significantly  to  the  deployment  of 
renewables  in  heating  and  cooling,  transport  and 
industry,  and  buildings.  The 
the 
Renewable  Energy  Expansion  Act,  which  entered 
into  force  in  January  2022,  and  the  recently 
announced  package  for  an  accelerated  expansion 
of  renewables  to  speed  up  and  streamline 
administrative  procedures  (see  Annex  12)  for 

impact  of 

(75)  IRENA, Renewable capacity statistics 2023 

(76)  IRENA, Renewable capacity statistics 2023 

43 

050100150200250€/MWhGas AustriaGas EUElectricity AustriaElectricity EU050100150200250300€/MWhGas AustriaGas EUElectricity AustriaElectricity EU 
   
                                                 
                                                 
 
Graph A7.5: Patent families in Energy Union R&I 
priorities 

Source: JRC SETIS (2022) 

10 for jobs in clean energy value chains, with over 
40% of renewable energy jobs in manufacturing in 
this sector. 

The number of identified innovators is rather 
limited  for  hydropower,  but  Austria  ranks 
fifth on global scale (after US, Japan, France 
and  China). (83)  Despite  the  positive  trends 
observed  in  e.g.  private  /VC  investments  the 
relatively  small  domestic  market  can  make  it 
difficult  for  clean  tech  and  innovation  companies 
to achieve economies of scale. 

investment 

Public investment in research and innovation (R&I) 
in  Energy  Union  priorities (84)  decreased  from 
0.049%  in  2014  to  0.039%  in  2020  (share  of 
GDP).  Over  a  similar  period  (2014-2019),  private 
R&I 
in  Energy  Union  priorities 
increased from 0.245% to 0.321%. The number of 
patent  families  in  Energy  Union  priorities  also 
increased,  from  17.4  per  million  inhabitants  in 
2014  to  28.9  per  million  inhabitants  in  2019. 
Venture  capital  investments  in  climate  tech start-
ups and scale-ups are, at EUR 7.5 million, very low 
compared to overall venture capital investments in 
Austria, which were EUR 1,175.1 million in 2021.  

Regarding  market  surveillance  activities, 
Austria is carrying out a very low number of 
checks on products covered by ecodesign and 
energy 
imply  serious 
concerns as to compliance levels of the concerned 
products  and 
therefore  missed  energy  and 
CO2 savings (85). 

labelling.  This  may 

austria_en#:~:text=In%202022%2C%20due%20to%20the,i
n%202022%20compared%20to%202021 

(83)  JRC compiled data 

(84)  Renewables, smart system, efficient systems, sustainable 
transport, CCUS and nuclear safety, COM(2015) 80 final 
(’Energy Union Package’). 

(85)  The internet-supported information and communication 
system for the pan-European market surveillance 

44 

16%13%13%20%48%29%19%18%19%44%20%39%201020142019[% per priority]CCUSNuclear safetySustainable transportEfficient systemsSmart systemRenewables146241256Total 
                                                                              
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table A7.1: Key energy indicators 

(1) The ranking of the main supliers is based on the latest available figures (for 2021) 
(2) FSRU included 
(3) Venture Capital investments include Venture Capital deals (all stages) and Private Equity Growth/Expansion deals (for 
companies that have previously been part of the portfolio of a VC investment firm). 

Source: Eurostat, Gas Infrastructure Europe (Storage and LNG Transparency Platform), JRC SETIS (2022), JRC elaboration based 
on PitchBook data (06/2022) 

45 

EU20182019202020212018201920202021Import Dependency [%] 64%72%58%52%58%61%57%56%of Solid fossil fuels 98%97%98%100%44%44%36%37%of Oil and petroleum products 94%96%97%90%95%97%97%92%of Natural Gas 88%123%73%51%83%90%84%83%Dependency from Russian Fossil Fuels [%]of Hard Coal7%11%13%13%40%44%49%47%of Crude Oil3%3%10%7%30%27%26%25%of Natural Gas n.a.n.a.64%64%40%40%38%41%20152016201720182019202020212022Gross Electricity Production (GWh)65,29968,30871,32468,61874,23472,55670,752-Combustible Fuels18,91618,95321,29619,90020,86518,36818,678-Nuclear0000000-Hydro40,59243,00842,17541,21944,20445,34442,540-Wind4,8405,2356,5726,0307,4506,7926,740-Solar 9371,0961,2691,4551,7022,0432,783-Geothermal 0000000-Other Sources15151313131012-Net Imports of Electricity (GWh)10,0627,1596,5468,9473,1292,1967,543-   As a % of electricity available for final consumption 16%11%10%14%5%3%11% -Electricity Interconnection (%)--15.30%42.41%38.1%37.6%31.5%31.3%20152016201720182019202020212022Gas Consumption (in bcm)8.38.79.59.19.28.89.49.1Gas Imports - by type (in bcm)6.17.58.57.811.46.54.8-Gas imports - pipeline6.17.58.57.811.46.54.8-Gas imports - LNG0.00.00.00.00.00.00.0-Gas Imports - by main source supplier (in bcm) (1)2019202020212022LNG TerminalsNumber of LNG Terminals (2)LNG Storage capacity (m3 LNG)Underground StorageNumber of storage facilities9999Operational Storage Capacity (bcm)9.69.89.89.82019202020212022VC investments in climate tech start-ups and scale-ups (EUR Mln) (3)0.00.07.5n.a.as a % of total VC investments in Austria0.0%0.0%0.6%n.a.Research & Innovation spending in Energy Union R&i priorites (2)Public R&I (EUR mln)154.9158.7224.0n.a.Public R&I (% GDP)0.039%0.041%0.055%n.a.Private R&I (EUR mln)1280.9n.a.n.a.n.a.Private R&I (% GDP)0.32%n.a.n.a.n.a.DIVERSIFICATION OF GAS SUPPLIESCLEAN ENERGYAUSTRIAENERGY DEPENDENCEELECTRICITYn.a. 
 
 
 
 
 
 
      
 
 
 
ANNEX 8: FAIR TRANSITION TO CLIMATE NEUTRALITY 

in 

line 

with 

through  Austria’s 

This  Annex  monitors  Austria’s  progress  in 
ensuring  a  fair  transition  towards  climate 
neutrality  and  environmental  sustainability, 
notably  for  workers  and  households 
in 
vulnerable  situations.  To  ensure  a  fair  green 
transition 
Council 
the 
Recommendation (86),  upskilling  and 
reskilling 
measures  will  promote  smooth  labour  market 
transitions and the implementation of REPowerEU, 
notably 
‘Just  Transition  – 
Aktionsplan  Aus-  und  Weiterbildung’  published  in 
January  2023.  Labour  shortages 
in  Austria’s 
construction  sector  are  high  relative  to  other  EU 
Member  States.  Austria’s  recovery  and  resilience 
plan 
reforms  and 
investments for a fair green transition (87), such as 
significant  investments  in  e-mobility,  charging 
infrastructure 
infrastructure, 
complementing  the  territorial  just  transition  plans 
and  actions  supported  by  the  European  Social 
Fund Plus (ESF+). 

outlines 

crucial 

(RRP) 

and 

rail 

Graph A8.1: Fair transition challenges in Austria 

Source: Eurostat, EMPL-JRC GD-AMEDI/AMEDI+ projects and 
World Inequality Database (see Table A8.1). 

in  Austria’s 

industries  most 
Employment 
affected  by  the  transition  remains  stable, 
but labour shortages may create bottlenecks. 
The  greenhouse  gas  (GHG)  emissions  intensity  of 
Austria’s  workforce  fell  from  13.2  to  12.5  tonnes 
per worker between 2015 and 2021 and is below 
the  EU  average  of  13.7  tonnes  (see  Graph A8.1 
and  Table A8.1).  Employment  in  Austria’s  energy-
intensive  industries  (EII)  represented  an  almost 

and 

industry, 

chemical 

(JTF),  more 

stable share of 2.8% of total employment in 2021 
(in  2020:  2.9%  vs  3.1%  in  the  EU).  Among  the 
sectors  with  the  highest  GHG  emissions  are  the 
paper 
and 
print 
pharmaceutical  production,  and 
the  metal 
industry (88).  Employment  in  mining  and  quarrying 
has  decreased  by  3.3%  since  2015  (to  around 
6 000 workers). In the regions covered by the Just 
Transition  Fund 
than  71 000 
employees  work  in  these  affected  sectors.  Total 
jobs  in  the  environmental  goods  and  services 
sector grew by 15.8% (to 183 500) in 2015-2019 
(EU:  +8.3%),  reaching  4%  of  total  employment, 
above  the  EU  average  of  2.2%  (see  Annex  9  for 
circular jobs specifically). However, the job vacancy 
rate  in  construction,  a  key  sector  for  the  green 
transition, was among the highest in the EU (6.4% 
vs  4.0%  in  EU)  in  2022.  Shortages  are  also 
recorded in manufacturing, IT and engineering. The 
main  reasons 
include  skills  mismatches  and 
people  lacking  qualifications  or  holding  ones  no 
longer in demand. In the context of its ‘Masterplan 
“green  jobs”’,  Austria  introduced  a  green  job 
platform to help match labour demand and supply 
in the green sector.  

reskilling  are 

industries,  workers’  participation 

Upskilling  and 
relatively 
prevalent in Austria’s most affected sectors, 
but participation has slightly decreased. Skills 
are  key  for  smooth labour  market transitions  and 
preserving jobs in transforming sectors. In energy-
in 
intensive 
education  and  training  increased  from  15.7%  in 
2015 to 16.2% in 2022 and remains above the EU 
average  (10.4%).  In  Austria,  35%  of  citizens 
believe  they  do  not  have  the  necessary  skills  to 
contribute  to  the  green  transition  (EU:  38%) (89). 
Specific  investments  under  the  RRP  and  the  JTF 
provide training to help reskill workers in affected 
industries.  In  addition,  3.9%  of  ESF+  funding 
contributes  to  green  skills  and  jobs.  For  instance, 
the 
‘CORA’  project,  co-financed  by  the  ESF, 
provides computer training for women to improve 
the  skills  needed  for  green  related  jobs  and  to 
meet the demands of the labour market. 

Energy  poverty  indicators  stood  well  below 
EU  averages,  but  low-income  groups  were 
particularly  affected  even  before  2022.  The 

(86)  Council Recommendation of 16 June 2022 on ensuring a fair 
transition towards climate neutrality (2022/C 243/04) covers 
employment, skills, tax-benefit and social protection 
systems, essential services and housing. 

(87)  See 2022 Country Report (Annex 6). 

(88)  See 2022 Territorialer Plan für einen gerechten Übergang 

Österreich 2021–2027. 

(89)  Special Eurobarometer 527. Fairness perceptions of the 

green transition (May – June 2022). 

46 

00.20.40.60.811.21.41.6GHG per workerEmployment EIIEducation &training EIIEnergy povertyTransportpoverty(proxy)CarboninequalityEU LatestAT Latest (vs EU Latest)AT 2015 (vs EU Latest) 
 
  
                                                 
                                                 
 
Table A8.1: Key indicators for a fair transition in Austria 

Source: Eurostat (env_ac_ainah_r2, nama_10_a64_e, ilc_mdes01), EU Labour Force Survey (break in time series in 2021), EMPL-
JRC GD-AMEDI/AMEDI+ projects and World Inequality Database (WID). 

the 

(AROP)  population  had 

share  of  the  population  unable  to  keep  their 
homes  adequately  warm  fell  from  2.6%  in  2015 
to  1.7%  in  2021 (90).  In  particular,  4.6%  of  the 
population  at  risk  of  poverty  were  affected  in 
2021  (EU:  16.4%  in  2021),  and  1.5%  of  lower 
middle-income households (in deciles 4-5) in 2021 
(EU: 8.2% in 2021). Before the energy price hikes, 
an  estimated  14.8%  of  the  total  population  and 
(expenditure-based)  at-risk-of-
41.4%  of 
poverty 
residential 
expenditure  budget  shares  on  electricity,  gas  and 
other  fuels (91)  above  10%  of  their  household 
budget  (still  below  the  estimated  EU  average  of 
26.9% and 48.2%, respectively). Despite the small 
percentages  reported,  Austria  addresses  energy 
poverty by applying a leverage factor in the energy 
efficiency  obligation  scheme  under  the  federal 
energy  efficiency  law.  Savings  achieved  in  low-
income households are leveraged with a factor of 
1.5,  which  renders  this  segment  more  interesting 
for the obligated energy supplier (92).   

and  19.1 pps,  respectively) (93).  The  expenditure 
shares  on  residential  energy  of  low  and  lower-
middle  income  groups  would  have  increased  the 
most,  for  both  gas  and  electricity,  as  shown  in 
Graph A8.2.  Among  the  (expenditure-based)  AROP 
population,  the  share  of  individuals  living  in 
for  private 
households  with  budget  shares 
fuels (94)  above  6%  would  have 
transport 
increased more than the EU average (10.4 pps vs 
5.3 pps),  reaching  40.8%  in  January  2023  (EU: 
37.9%) due to the increase in transport fuel prices. 
Introduced  under  the  RRP,  the  Renewable Heating 
Law  will  create  the  framework  conditions  for 
replacing  outdated  fossil-fuelled  heating  systems 
with renewable energy or district heating.  

Graph A8.2: Distributional impacts of energy prices 
due to rising energy expenditure (2021-2023) 

The  increased  energy  prices  in  2021-2023 
negatively  affected  households’  budgets,  in 
particular  for  low-income  groups.  As  a  result 
of energy price changes during the August 2021 to 
January  2023  period  relative  to  the  18  months 
prior (cf. Annex 7), in the absence of policy support 
and  behavioural 
share  of 
responses, 
individuals living in households which spend more 
than  10%  of  their  budget  on  residential  energy 
would  have  increased  by  11.3  percentage  points 
(pps)  for  the  whole  population  and  by  14.6  pps 
among  the  (expenditure-based)  AROP  population, 
slightly less than the EU-level  increases (16.4 pps 

the 

(90)  Energy poverty is a multi-dimensional concept. The indicator 
used focuses on an outcome of energy poverty. Further 
indicators are available at the Energy Poverty Advisory Hub.   

Mean change of energy expenditure as a percentage (%) of 
total expenditure per income decile (D) due to observed price 
changes (August 2021 – January 2023 relative to the 18 
months prior), excl. policy support and behavioural responses. 
Source: EMPL-JRC GD-AMEDI/AMEDI+ projects, based on 
Household Budget Survey 2015 and Eurostat inflation data 
for CP0451 and CP0452. 

Access to public transport displays an urban-
rural  divide,  while  carbon  footprints  differ 
significantly. Citizens perceive public transport to 

(91)  Products defined according to the European Classification of 

(93)  EMPL-JRC GD-AMEDI/AMEDI+ ; see details in the related 

Individual Consumption according to Purpose (ECOICOP): CP045. 

technical brief.  

(92)  Reported in the national long term renovation strategy. 

(94)  ECOICOP: CP0722. 

47 

0.0%0.5%1.0%1.5%2.0%2.5%3.0%ElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasD1D2D3D4D5D6D7D8D9D10AT GasAT ElectricityEU GasEU ElectricityIndicatorDescriptionAT 2015AT LatestEU LatestGHG per workerGreenhouse gas emissions per worker - CO2 equivalent tonnes13.212.5 (2021)13.7 (2021)Employment EIIEmployment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20), minerals (C23), metals (C24), automotive (C29) - %2.92.9 (2020)3 (2020)Education & training EIIAdult participation in education and training (last 4 weeks) in energy-intensive industries - %15.716.2 (2022)10.4 (2022)Energy povertyShare of the total population living in a household unable to keep its home adequately warm - %2.61.7 (2021)6.9 (2021)Transport poverty (proxy)Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport - %30.540.8 (2023)37.1 (2023)Carbon inequalityAverage emissions per capita of top 10% of emitters vs bottom 50% of emitters6.36.3 (2020)5 (2020) 
                                                 
   
                                                 
 
  
 
be  relatively  available  (59%  vs  55%  in  the  EU), 
affordable  (68%  vs  54%  in  the  EU)  and  of  good 
quality (72% vs 60% in the EU). As regards these 
perceptions,  rural  areas  in  Austria  perform  worse 
than  urban  areas,  yet  still  better  when  compared 
to  rural  areas  in  the  EU  overall (95).  The  average 
carbon  footprint  of  the  top  10%  of  emitters 
among the population in Austria is about 6.3 times 
that  of  the  bottom  50%  (see  Graph  A8.1)  -  the 
third  highest  ‘carbon  inequality’  in  the  EU  (EU 
average: 5.0 times).  In  Austria,  the  average  levels 
of  air  pollution  in  2020  stood  below  the  EU 
average  (9.9  vs  11.2  µg/m  PM2.5),  with  53%  of 
the population living in regions exposed to critical 
levels  of  air  pollution (96),  leading  to  significant 
health impacts, in particular on vulnerable groups, 
and 3 181 premature deaths annually (97).  

(95)  EU (rural): 46%, 48%, 56% respectively. Special 

Eurobarometer 527. 

(96)  Double the recommendations in the WHO Air Quality 

Guidelines (annual exposure of 5µg/m3) 

(97)  EEA- Air Quality Health Risk Assessment 

48 

 
 
  
                                                 
PRODUCTIVITY 
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY 

neutral and sustainable circular economy by 2050, 
setting the target of reducing its material footprint 
(raw  material  consumption)  to  seven  tonnes  per 
capita per year by 2050.  

Graph A9.1: Trend in material use 

Source: Eurostat 

Graph A9.2: Treatment of municipal waste 

The  circular  economy  transition  is  key  to 
climate  and 
delivering  on 
the  EU’s 
environmental  goals  and  provides 
large 
socio-economic  benefits. It  spurs  job  growth, 
innovation  and  competitiveness  and 
fosters 
resilience  and  resource  security.  The  circularity 
transition  of  industry,  the  built  environment  and 
agri-food  can  generate  significant  environmental 
improvements (see Annex 6), as they rank among 
the most resource-intensive systems. 

The  pace  of  Austria’s  circular  economy 
transition needs to increase to meet the EU’s 
circular  economy goals.  The  EU’s  2020  circular 
economy  action  plan  (CEAP) (98)  aims  at  doubling 
the  circular  material  use  rate  between  2020  and 
2030.  Austria’s  circular  (secondary)  material  use 
rate  rose  to  12.3%  in  2021,  thus  moving  above 
the  EU  average  of  11.7%,  but  still  trailing  EU 
leaders.  Austria’s  objective  as  set  out  in  its  new 
circular  economy  strategy  is  to  raise  its  circular 
material  use  rate  to  18%  by  2030,  which  falls 
short of the CEAP objective. The CEAP also aims to 
significantly  decrease  the  EU’s  material  footprint. 
Austria’s  material  footprint  of  21.3  tonnes  per 
capita  was  significantly  higher  than  the  EU 
average  of  13.7  tonnes  per  capita  in  2020.  The 
labour  market  benefits  of  the  circular  transition 
are  mixed,  with  growth  in  most  years  but  also 
considerable decline in 2018.  

location 

strategy 

Austria  recently  adopted  new  policies  and 
laws to address circular economy challenges, 
which  now  need  to  be  implemented  to  bring 
down  Austria’s  high  material  footprint. 
Generally,  the  circular  economy  has  been  given  a 
more  prominent  role  in  the  current  government’s 
programme:  it  is  mentioned  as  a  key  topic  for  a 
new 
supporting  business 
development  in  rural  areas,  as  well  as  a  cross-
sectoral  climate  protection  and  circular  economy 
strategy  focusing  on  the  energy  and  emissions- 
intensive  sectors  (steel,  chemicals,  cement).  After 
broad  consultation,  the  government  adopted  a 
comprehensive  circular  economy  strategy 
in 
December 2022 which covers the whole circle and 
all concerned sectors. It includes clear governance 
and  regular  reporting.  Its  vision  is  to  transform 
Austria’s  economy  and  society  into  a  climate-

(98)  European Commission, 2020, A new Circular Economy Action 

Plan (europa.eu) 

Source: Eurostat 

Austria  is  among  the  top  performers  in  the 
EU  in  waste  management,  but  municipal 
waste  keeps  growing.  In  2020  Austria  recycled 
62.3  %  of  its  municipal  waste,  which  represents 
the second-highest recycling rate in Europe and is 
well above the EU 2020 municipal waste recycling 
target  (50%).  Austria  is  also  assessed  to  be  on 
track  for  meeting  the  EU’s  recycling  targets  for 
municipal and packaging waste for 2025. Austria’s 

49 

0.020.040.060.080.0100.0120.00.05.010.015.020.025.030.0201620172018201920202021kg/capitatonnes/capitaMaterial footprint Austria (tonnes/capita)Material footprint EU-27 (tonnes/capita)Trade in recyclable raw materials Austria (imports extra EU, kg/capita)Trade in recyclable raw materials EU-27 (imports extra EU, kg/capita)564570579588834010020030040050060070080090020162017201820192020Kg per capita Difference waste generated/treatmentLandfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU-27 
 
 
                                                 
           
 
          
 
Table A9.1: Overall and systemic indicators on circularity 

(1) Persons employed in the circular economy only tracks direct jobs in selected sub-sectors of NACE codes E, C, G and S; (2) the 
circular material use rate measures the share of material recovered and fed back into the economy in overall material use, 
including composting and digestion; (3) the recovery rate of construction and demolition waste includes waste which is prepared 
for reuse, recycled or subject to material recovery, including through backfilling operations; (4) soil sealing: 2016 column refers to 
2015 data; (5) food waste includes primary production, processing and manufacturing, retail and distribution, restaurants and  
food services, and households.   
Source: Eurostat, European Environment Agency 

recycling  rate  for  plastic  packaging  stood  at  31% 
in 2019 and is well below the EU’s 2025 target of 
55%.  The  rate  is  likely  to  grow  in  view  of  new 
separate 
regulatory  measures 
collection  and  subsequent  sorting,  and  thanks  to 
funding from the recovery and resilience plan.  

improve 

to 

The industrial system needs to become more 
circular. Austria remains below the EU average as 
regards  efficiency  of  using  materials,  with  a 
resource  productivity  of  2.1  purchasing  power 
standard  per  kilogramme  vs  2.3  for  the  EU.  This 
rate  has  only  slightly  improved  over  the  last  5 
years,  indicating  significant  potential  to  boost 
repair, remanufacturing, and the use of secondary 
raw materials. 

The  built  environment  system  continues  to 
exacerbate  the  depletion  of  resources,  and 
the  continuously  high  level  of  soil  sealing 
contributes  to  loss  of  agricultural  land  and 
biodiversity.  The  recovery  rate  of  construction 
and  demolition  waste  has  increased  since  2016 
and is now above the EU average (91% vs 89% in 
2020).  But  soil  sealing  continues  to  be  among 
Austria’s biggest environmental pressures given its 
topography.  Surface  sealing  grew  significantly 
faster than the Austrian population in 2001–2019. 
In  2021  daily  land-take  was  11.5  ha/day;  Austria 
loses 0.5% of its agricultural  land every year and 

50 

has  one  of  the  highest  per  capita  numbers  in 
Europe  of  road  kilometres  and  supermarket 
surface (99).  A  new  national  soil  strategy  with  the 
headline  target  of  limiting  net  land  use  to  2.5 
ha/day by 2030 is under development, but its final 
adoption is delayed. Meeting the target will require 
reinforced  governance at supra-regional  level  and 
rigorous follow-up and implementation.  

The  agri-food  system  has  yet  to  design  out 
food  waste.  With  136  kg  per  capita,  food  waste 
is above the EU average of 131 kg. Austria’s waste 
prevention  programme  has  not  been  sufficiently 
effective  at  lowering  food  loss  and  waste  at  the 
primary  production  level  and  the  early  stages  of 
the  supply  chain.  Still,  Austria’s  composting  and 
anaerobic digestion per head is well above the EU 
average in 2020, at 179 kg per head vs 100 kg.  

There remains a financing gap in the circular 
economy, 
including  waste  management.  
Additional  investments  will  be  required  to 
address  growing  needs.  The  financing  gap  was 
estimated  at  EUR  708  million  per  year  between 
2014  and  2020  when  investment  needs  were 
estimated  to  be  at  least  EUR  1.2  billion  per  year 
(see Annex 6). 

(99)  Umweltbundesamt, 2020  

AREA201620172018201920202021EU-27 Latest year EU-27Overall state of the circular economyMaterial footprint (tonnes/capita)25.425.124.924.421.3-13.72020YoY growth in persons employed in the circular economy (%)1-0.7 1.3-4.6 0.7--2.92019Water exploitation index plus (WEI+) (%)1.71.91.90.1--3.62019IndustryResource productivity (purchasing power standard (PPS) per kilogram)1.92.02.02.12.02.12.32021Circular material use rate (%)211.211.411.111.510.812.311.72021Recycling rate (% of municipal waste)57.657.857.758.262.3-49.62021Built environmentRecovery rate from construction and demolition waste (%)388.0-90.0-91.0-89.02020Soil sealing index (base year = 2006)4103.3-106.7---108.32018Agri-foodFood waste (kg per capita)5----136.0-131.02020Composting and digestion (kg per capita)181.0182.0187.0189.0179.0-100.02021 
                                                 
 
       
 
ANNEX 10: DIGITAL TRANSFORMATION 

transformation  by  2030, 

Digital  transformation  is  key  to  ensuring  a 
resilient and competitive economy. In line with 
the  Digital  Decade  Policy  Programme,  and  in 
particular  with  the  targets  in  that  Programme  for 
digital 
this  Annex 
describes  Austria’s  performance  on  digital  skills, 
digital 
the 
digitalisation  of  businesses  and  public  services. 
Where relevant, it makes reference to progress on 
implementing  the  Recovery  and  Resilience  Plan 
(RRP).  Austria  allocates  53%  of  its  total  RRP 
budget to digital (EUR 1.8 billion) (100). 

infrastructure/connectivity 

and 

The  Digital  Decade  Policy  Programme  sets 
out a pathway for Europe’s successful digital 
transformation  by  2030.  The  Programme 
provides  a  framework  for  assessing  the  EU’s  and 
Member States’ digital transformation, notably via 
the  Digital  Economy  and  Society  Index  (DESI).  It 
also  provides  a  way  for  the  EU  and  its  Member 
States  to  work  together,  including  via  multi-
country  projects,  to  accelerate  progress  towards 
the  Digital  Decade  digital  targets  and  general 
objectives (101).  More  generally,  several  aspects  of 
digital  transformation  are  particularly  relevant  in 
the current context. In 2023, the European Year of 
Skills, building the appropriate skillset to make full 
use of the opportunities that digital transformation 
offers  is  a  priority.  A  digitally  skilled  population 
increases the development and adoption of digital 
technologies  and  leads  to  productivity  gains (102). 
Digital  technologies,  infrastructure  and  tools  all 
play  a  role  in  the  fundamental  transformation 
needed to adapt the energy system to the current 
structural challenges (103). 

The  lack  of  information  and  communication 
technology 
is  a  key 
(ICT)  specialists 
challenge  for  Austria  in  the  area  of  digital 

(100) The share of financial allocations that contribute to digital 
objectives has been calculated using Annex VII of the RRF 
Regulation. 

(101) The Digital Decade targets as measured by DESI indicators 
and complementary data sources are integrated to the 
extent currently available and/or considered particularly 
relevant in the MS-specific context.  

(102) See for example OECD (2019): OECD Economic Outlook, 

Digitalisation and productivity: A story of complementarities, 
OECD Economic Outlook, Volume 2019 Issue 1 | OECD 
iLibrary (oecd-ilibrary.org). 

(103) The need and possible actions for a digitalisation of the 
energy system are laid out in the Communication 
‘Digitalisation the energy system – EU action plan’ 
(COM(2022)552. 

51 

specialists  matches 

skills.  The  country  scores  well  above  the  EU 
average  in  the  percentage  of  the  population  with 
at  least  basic  digital  skills,  and  the  percentage  of 
ICT 
the  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  (67.9% 
compared to 62.8%) (104).  

Austria  has  a  mixed  performance  on  digital 
infrastructure/connectivity.  The  country  scores 
above the EU average in overall 5G coverage (92% 
versus  the  EU  average  of  81%)  and  performs 
particularly well on 5G coverage in the 3.4-3.8 GHz 
spectrum  band,  which  is  essential  for  enabling 
advanced  applications  requiring  large  spectrum 
bandwidth (74% compared to EU average of 41%). 
However,  it  still  ranks  substantially  below  the  EU 
average  in  the  percentage  of  households  with 
access to fixed very high capacity network (VHCN) 
including  fibre  to  the  premises  (55%  versus  73% 
in  the  EU).  Recent  significant  improvements  were 
the  result  of  the  one-off  effect  of  upgrading 
already  existing  networks,  mostly  in  urban  areas. 
However, Austria has ambitious measures in place 
to improve connectivity with a focus on rural areas 
via national funding and the RRP. 

Austria’s  performance  on  the  digitalisation 
of businesses is mixed. The percentage of SMEs 
with  at  least  a  basic  level  of  digital  intensity  is 
close  to  the  EU  average.  Moreover,  one  key 
challenge  is  that  Austrian  companies  are  not  yet 
making full use of all the digital technologies that 
are  available.  For  example,  the  use  of  artificial 
intelligence  among  Austrian  companies  is  slightly 
above  the  EU  average,  but  the  use  of  cloud 
services  and  big  data  is  well  below  the  EU 
average.  Several  RRP  measures  to  improve  the 
take-up  of  digital 
in  Austrian 
enterprises  have  been  launched,  e.g.  to  provide 
advisory  services  and  investment  for  concrete 
digitalisation projects.  

technologies 

Austria  performs  around  the  EU  average  on 
the  digitalisation  of  public  services  for 
citizens  and  businesses.  The  country  has 
traditionally  been  a  frontrunner  in  e-government 
services,  with  a  relatively  high  number  of  e-

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

eCommerce in Enterprises. 

 
 
                                                 
                                                 
 
 
government  users,  78%  of 
internet  users 
compared  to  74%  on  EU  average.  On  the  supply 
side,  it  scores  slightly  above  the  EU  average  in 
providing  digital  public  services  for  citizens  and 
slightly below in providing digital public services to 
businesses.  Austria  has  introduced  the  ‘once  only’ 
principle  to  the  Business  Service  Portal  Act.  The 
country  has  also  published  its  Digitalisation  Fund 
Act  with 
the 
federal 
the 
digitalisation 
administration.  The  electronic  identification  ‘ID 
Austria’  scheme  is  fully  operational  since  April 
2023.  Every  Austrian  citizen  receives  a  digital  ID 

the  objective  of  accelerating 

Austrian 

of 

automatically with their application for a passport. 
‘ID  Austria’  will  provide  further  solutions  (e.g. 
digital  registration  certificate)  including  private 
sector  offers  and  is  rolling  out  the  digital  driving 
licence.  As  a  notified  scheme  under  the  eIDAS 
(electronic  identification,  authentication  and  trust 
services)  Regulation,  ‘ID  Austria’ provides  also the 
underlying  basis  for  the  good  performance  on 
access  to  electronic  health  records  records  (score 
of 88 compared to EU average score of 71). 

Table A10.1: Key Digital Decade targets monitored by DESI indicators 

(1) The 20 million target represents about 10% of total employment. 
(2) The Fibre to the Premises coverage indicator is included separately as its evaluation will also be monitored separately and 
taken into consideration when interpreting VHCN coverage data in the Digital Decade. 
(3) At least 75 % of Union enterprises have taken up one or more of the following, in line with their business operations: (i) cloud 
computing services; (ii) big data; (iii) artificial intelligence.   

Source: Digital Economy and Society Index 

52 

EUDigital Decade target by 2030 DESI 2021DESI 2022DESI 2023DESI 2023(EU)Digital skillsAt least basic digital skillsNA63%63%54%80%% individuals2021202120212030ICT specialists (1)4.5%4.5%4.5%4.5%20 million% individuals in employment aged 15-7420202021202120212030Digital infrastructure/connectivityFixed Very High Capacity Network (VHCN) coverage39%45%55%73%100%% households20202021202220222030Fibre to the Premises (FTTP) coverage (2)21%27%37%56%-% households20202021202220222030Overall 5G coverage50%77%92%81%100%% populated areas202020212022202220305G coverage on the 3.4-3.8 GHz spectrum bandNANA74%41%-% populated areas202220222030Digitalisation of businessesSMEs with at least a basic level of digital intensityNANA67%69%90%% SMEs202220222030Big data (3)9%9%9%14%75%% enterprises20202020202020202030Cloud (3)NA29%29%34%75%% enterprises2021202120212030Artificial Intelligence (3)NA9%9%8%75%% enterprises2021202120212030Digitalisation of public servicesDigital public services for citizensNA767877100Score (0 to 100)2021202220222030Digital public services for businessesNA818384100Score (0 to 100)2021202220222030Access to e-health recordsNANA8871100Score (0 to 100)202320232030Austria 
 
  
 
 
ANNEX 11: INNOVATION 

This  Annex  provides  a  general  overview  of  the 
performance  of  Austria’s  research  and  innovation 
system, which is essential for delivering the green 
and digital transitions. 

According  to  the  2022  edition  of  the 
European Innovation Scoreboard, Austria is a 
‘strong  innovator’  but  its  performance  lead 
over the EU average is becoming smaller (105). 
While  Austria’s  performance  is  above  the  EU 
average  (118.3%  of  the  EU  performance),  it  is 
increasing at a lower rate than the EU’s. 

Austria’s R&D intensity (106) has continuously 
increased  over  the  last  decade  and  ranked 
third  in  the  EU  in  2021  (at  3.19%).  This 
positive  dynamic  is  seen  in  both  public  R&D 
intensity (0.95%  in  2021 against  0.85% in  2010) 
and  business  R&D  intensity  (2.22%  in  2021 
against 1.87% in 2010). Austria is also among the 
the  highest 
OECD  economies 
percentage of GDP in total government support for 
business R&D, 0.29% in 2019. R&D tax incentives 
accounted  for  70%  of  total  government  support 
for  business  enterprise  expenditure  on  R&D  in 
Austria (107). Investing in R&D is an important lever 
for  the  government  to  try  to  position  the  country 
as an innovation leader. 

that  provide 

However,  this  does  not  translate  into  a  high 
number  of 
technology  and  knowledge-
intensive  start-ups.  This  has  been  identified  as 
one  of  the  greatest  weaknesses  in  the  Austrian 
research  and  innovation  system (108)  and  has  an 
impact  on  the  business  dynamism:  only  3.3%  of 
fast-growing 
employed 
Austrians  were 
enterprises in the top 50% most innovative sectors 
in 2019 against an EU average of 5.5% (see graph 
A11.1). 
of 
challenge 
into  market-
transforming  more  R&D  results 
relevant  products (109).  The  research,  technology 

Austria 

faces 

the 

in 

and  innovation  (RTI)  strategy  for  2030,  a  key 
reform in the Austrian recovery and resilience plan 
(RRP),  includes  objectives  for  the  optimisation  of 
the  start-up  process  under  its  Objective  2:  focus 
on effectiveness and excellence. 

Graph A11.1: Employment in fast-growing 
enterprises in the top 50% most innovative 
sectors 

Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus 
database and EPO's Patent Statistical Database) Invest 
Europe 

The  low  supply  of  private  risk  capital  is 
hindering  business  dynamism. 
In  Austria, 
limitations  on  access  to  risk-finance  (e.g.,  venture 
capital)  are  still  apparent  and  have  always  been 
considered  to  be  a  particular  weakness  of  the 
Austrian innovation system (110). In its report from 
2022,  the  Council  for  Research  and  Technology 
Development  calls  for  an  improvement  of  the 
financial  framework  conditions  for  research  & 
innovation activities, which includes the availability 
of  risk  capital (111).  Strengthening  the  domestic 
venture  capital  market  is  important  for  Austria’s 
start-up  dynamism  and  has  the  potential  to 
increase the number of start-ups and high-growth 
enterprises.  One  goal  of  the  ‘RTI  Strategy  2030’, 
part  of  the  Austrian  RRP,  is  to  increase  venture 
capital investment from 0.02% of GDP to 0.1%. 

(105) 2022 European Innovation Scoreboard, Country profile: 

Austria https://ec.europa.eu/assets/rtd/eis/2022/ec_rtd_eis-
country-profile-at.pdf The EIS provides a comparative 
analysis of innovation performance in EU countries, including 
the relative strengths and weaknesses of their national 
innovation systems (also compared to the EU average). 

(106) defined as gross domestic expenditure on R&D as a 

percentage of GDP 

(107) rd-tax-stats-austria.pdf (oecd.org) 

(108) Taetigkeitsbericht-2021.pdf (rat-fte.at) 

(110) 4. Austria | Financing SMEs and Entrepreneurs 2022: An 
OECD Scoreboard | OECD iLibrary (oecd-ilibrary.org) 

(111) Bericht zur wissenschaftlichen und technologischen 

(109) Austrian Research and Technology Report 2022_bf (3).pdf 

Leistungsfähigkeit Österreichs 2022 (rfte.at) 

53 

0123456201020152019[%]AustriaEU average 2019 
 
                                                 
  
                                                 
 
Table A11.1: Key innovation indicators 

(1) EU average for the latest available year or the year with the highest number of country data 
Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database & EPO’s Patent Statistical database), Invest Europe 

54 

EUaverage (1)R&D intensity (GERD as % of GDP)2.733.053.133.23.192.26Public expenditure on R&D as % of GDP0.850.860.910.960.950.76Business enterprise expenditure on R&D (BERD) as % of GDP1.872.182.22.232.221.49Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 10.91110.7::9.8Patent Cooperation Treaty patent applications per billion GDP (in PPS)5.354.5::3.3Public-private scientific co-publications as % of total publications12.713.215.114.614.87.1Public expenditure on R&D financed by business enterprise (national) as % of GDP:0.0460.0055::0.054New graduates in science & engineering per thousand pop. aged 25-3415.518.318.919.4:16Total public sector support for BERD as % of GDP:0.2880.293::0.194R&D tax incentives: foregone revenues as % of GDP0.1110.1460.191::0.1Share of environment-related patents in total patent applications filed under Patent Cooperation Treaty (%)17.413.715.2: :13.3Venture capital (market statistics) as % of GDP0.020.0230.0240.0230.0760.074Employment in fast-growing enterprises in 50% most innovative sectors2.91.93.3::5.52021Austria2010201520192020Finance for innovation and economic renewalKey indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation  
 
 
  
 
ANNEX 12: INDUSTRY AND SINGLE MARKET 

The  Austrian  economy  is  highly  integrated 
into  global  supply  chains,  particularly  with 
Germany  and  Central  European  countries. 
Having  suffered during  the  coronavirus  pandemic, 
industrial  production  recovered  strongly  in  2021 
and  2022.  However,  as  global  disruptions  in  the 
supply  of 
intermediate  goods  became  more 
frequent,  delivery  times  for  plant  and  equipment 
lengthened.  In  addition,  investment  activity,  which 
had  grown  rapidly  until  early  2022  thanks  to 
robust  industrial  production  and  the  Austrian 
government’s  investment  premium  (a  measure 
included  in  the  Austrian  Recovery  and  Resilience 
Plan),  shrank  in  real  terms  in  the  second  half  of 
the year. Russia’s invasion of Ukraine has sharply 
increased  uncertainty  and  has  already  started  to 
weigh  on  the  recovery,  due  to  rising  energy  and 
commodity prices and negative confidence effects.  

Supply  shortages  have  worsened  in  sectors 
where  Russia  and  Ukraine  played  a  crucial 
role in world trade, such as gas and oil, but also 
fertilisers,  metals  and  wheat.  This  has  strong 
implications for global production chains, including 
some important sectors of Austrian industry, such 
as the automotive and renewable energy industry. 
Austria  could  play  an  important  role  in  securing 
some  raw  materials,  as  the  country  ranks  sixth 
worldwide  in  the  production  of  magnesite,  a 
critical  raw  material  with  strategic 
industrial 
applications  in  the  automotive,  aerospace  and 
packaging  sectors  (Austria  has  2.53%  of  total 
world production). Austria is also among the main 
producers of tungsten ore and talc. 

Productivity in Austria remained stable in the 
last  decade,  with  a  labour  productivity  increase 
of  just  1.2%  in  2022  compared  to  its  level  in 
2015. Productivity in industry increased by 1.5% in 
2022,  slightly  above  the  EU  average  (see  table 
A12.1). Manufacturing accounts for 21.6% of total 
value  added  and  15.8%  of  total  employment  and 
it is broadly diversified and sectorally balanced.  

total 

imports 

(excluding 

The  share  of  Russian  gas  has  fallen  to  around 
60%  of 
transits) 
throughout  2022,  from  80%  before  the  war,  due 
to higher inflows from other countries and reduced 
supplies  from  Russia  (see  Annex  7  on  Energy). 
Austrian  industry  consumes  about  40%  of  the 
natural  gas  and  uncertainties  related  to  the  price 
of  gas  could  harm  the  chemicals,  fertiliser, 
pharmaceuticals  and  plastics  industries.  Securing 
an  adequate  gas  supply  ahead  of  the  2023/24 
winter  will  therefore  remain  a  challenge  for  the 

economy 
confidence, particularly in the industrial sector.  

and  might 

undermine 

business 

By  sector,  productivity  in  construction  (which 
contributes 7% to  GDP, a high value by European 
standards)  declined  by  8.8%  in  the  last  5  years 
and market services decreased by around 3% (see 
graph A12.1). It is worth noting the declining trend 
in  tourism,  a  key  ecosystem  that  accounted  for 
4.1%  of  GDP  in  2021,  down  from  7.6%  in  2019, 
mainly  due  to  the  COVID-19  lockdown  during  the 
winter months. 

Graph A12.1: Real labour productivity per hour at 
industry level (EU=100) 

Source: Eurostat 

Austrian firms remain more concerned about 
staff  availability  and  production  costs  than 
tighter 
about  access  to  finance.  Despite 
financing  conditions,  firms  were  not  particularly 
concerned  about  their  access  to  finance  and 
reported  no  changes  in  banks’  willingness  to  lend 
(the  growth  rate  in  bank  loans  to  companies 
amounted to 12.1% annually in August 2022).  

On the other hand, in 2022 labour shortages were 
cited as the main reason for limited production by 
21%  of  companies  in  the  industrial  sector  (only 
7%  in  2020),  35%  in  the  construction  sector  and 
almost 37% in the services sector. SMEs also rely 
on bank funding: according to SAFE, the proportion 
of  Austrian  SMEs  applying  for  bank  loans  was 
above the EU average, and 86% of them received 
at  least  75%  of  the  amount  requested  (EU 
average  77%).  Only  4%  of  SMEs  did  not  apply 
because of a possible rejection, the lowest rate in 
the EU.  

However,  limitations  on  access  to  risk  capital, 
particularly  on  venture  capital 
finance,  are 
affecting  innovative  SMEs  and  start-ups.  The 
market is still underdeveloped and very volatile, a 
particular  weakness  in  the  innovation  sector  (see 
Annex 11 on Innovation). 

55 

85951051151252016201720182019202020212022(A) Agriculture(B) Industry(F) Construction(G-I) Wholesale and retail trade, transport, accommodation 
 
     
 
 
table  A12.1).  Austria  remains  among  the  most 
restrictive Member States in retail operations (114) 

Overall  Austria  performs  above  the  EU 
average in digital public services, significantly 
exceeding  the  EU  average  on  the  number  of  e-
government  users.  However,  it  scores  slightly 
below  EU  average  in  digital  public  services  for 
businesses.  Furthermore,  the  capacity  of  the 
Austrian public administration to apply EU rules on 
the Single Market could be improved by increasing 
staffing in national  SOLVIT centres, which provide 
solutions  related  to  problems  with  applying  EU 
rights. 

Graph A12.2: Business environment and 
productivity drivers 

Source: 1) % of GDP, 2021 Eurostat;  
2) composite indicator, 2021 European Investment Fund 
access to finance index;  
3) average payment delay in number of days, 2022 Intrum;  
4) % of firms in manufacturing facing constraints, 2022 
European Commission business consumer survey;  
5) proportion of contracts awarded with a single bidder, 2022 
Single Market Scoreboard. 

Since  late  2021,  insolvency  numbers  have 
returned  to  pre-pandemic  levels:  in  2020  and 
2021, the number of insolvencies was about 40% 
lower  than  in  2019,  mainly  due  to  government 
support  programmes,  according  to  the  Austrian 
late  payments, 
In  this  sense, 
Central  Bank. 
combined  with  tightening  credit  conditions  as 
interest rates go up, could be a potential threat to 
the  survival  of  Austrian  firms.  The  payment  gap 
slightly increased to 14 days for public sector and 
B2B  transactions (112).  On  SMEs,  so  far  only  32% 
experienced problems due to late payments in the 
last  six  months  (only  5%  regularly),  while  67% 
shows no record of that, one of the highest  rates 
in the EU (see table A12.1). 

Austria  is  well  integrated  into  the  Single 
Market  and  barriers  to 
investment  are 
relatively  modest  overall.  In  2021,  more  than 
half  of  Austria’s  goods  exports  went  to  the  euro 
area.  However,  a  high  administrative  burden 
remains  a  pressing  concern  for  Austria’s  business 
environment.  

The federal states have far-reaching competences 
in many areas (building, law, spatial planning, etc.) 
which  usually  lead  to  different  procedures  and 
unnecessarily  complex  requirements.  This  is  the 
case  for  renewables  permitting:  an  ongoing  SMET 
(Single  Market  Enforcement  Taskforce)  project 
aims to remove several process-related barriers to 
renewable  energy  permitting,  particularly  the  lack 
of  staff  or  technical  capacity,  but  also  extensive 
requirements  and  delays 
in  administrative 
processes.  

for  many 

the  EU  average 

Also, regulatory restrictiveness in Austria is higher 
than 
regulated 
professions,  especially  for  lawyers,  architects  and 
civil  engineers.  These  access  barriers  and 
restrictive  rules  include,  amongst  other,  extensive 
reserved activities and interdisciplinary restrictions. 
The  Austrian  Recovery  and  Resilience  Plan  does 
regulated 
not 
professions (113). 
public 
procurement  market  lacks  competitiveness.  The 
percentage of single bids has increased in the last 
two years (from 22% in 2020 to 29% in 2022, see 

include  measures 

Additionally, 

to 
the 

related 

(112) 2022 European Payment Report, Intrum 

(113) OECD, “Assessment of the links between the European 
National Recovery and Resilience Plans and the OECD 
Product Market Regulation Indicators”, 2022 

(114) European Commission, Retail Restrictiveness Indicator (2022 

update), forthcoming 

56 

1) Businessinvestments2) EIF access tofinance index3) Payment gap- G2B3) Payment gap- B2B4) Materialshortage4) Labourshortage5) Single bidsEuropean UnionAustria 
                                                 
     
 
                                                 
Table A12.1: Industry and Single Market 

(1) last available year  
Source: (1) AMECO, (2) Eurostat, (3) ECFIN BCS, (4) Eurostat, (5) COMEXT and Commission calculations, (6) Eurostat, (7) Eurostat, 
(8) OECD, (9) Single Market Scoreboard, (10) EIB survey, (11) Eurostat: (12) Intrum, (13) SAFE Survey, (14) EIF SME Access to 
Finance Index. 

57 

POLICY AREAINDICATOR NAME20182019202020212022EU27 average (*)Net private investment, level of private capital stock, net of depreciation, % GDP (1)5.664.665.53.7Net public investment, level of public capital stock, net of depreciation, % GDP (1)0.50.60.60.80.60.4Real labour productivity per person in industry (% yoy)(2)1.3-0.6-3.77.41.51.4Cost competitive-nessNominal unit labour cost in industry (% yoy)(2)2.13.13.7-4.54.42.9Material shortage (industry), firms facing constraints, % (3)1595283547Labour shortage using survey data (industry), firms facing constraints, % (3)17167152128Vacancy rate (business economy)(4)3.53.734.35.73.1Concentration in selected raw materials, Import concentration index based on a basket of critical raw materials (5)0.220.20.170.170.20.18Installed renewables electricity capacity, % of total electricity produced (6)78.180.680.982n.a.50.9Single Market integrationEU trade integration, % (7)38.037.835.138.642.545.8RestrictionsEEA Services Trade Restrictiveness Index (8)0.060.060.060.060.060.05Public procurement Single bids, % of total contractors (9)162422252929Investment obstaclesImpact of regulation on long-term investment, % of firms reporting business regulation as major obstacle (10)3735.829.235.434.429.6Bankruptcies, Index (2015=100)(11)n.a.n.a.n.a.n.a.n.a.73.6Business registrations, Index (2015=100) (11)n.a.n.a.n.a.n.a.n.a.121Payment gap - corporates B2B, difference in days between offered and actual payment (12)1114121413Payment gap - public sector, difference in days between offered and actual payment (12)61813111415Share of SMEs experiencing late payments in past 6 months, % (13)n.a.38.230.430.432.343EIF Access to finance index - Loan, Composite: SME external financing over last 6 months, index values between 0 and 1 (14)0.810.730.720.73n.a.0.46EIF Access to finance index - Equity, Composite: VC/GDP, IPO/GDP, SMEs using equity, index values between 0 and 1 (14)0.080.150.080.12n.a.0.23BUSINESS ENVIRONMENT - SMEsBusiness demographyLate paymentsAccess to financeHEADLINE INDICATORSEconomic StructureRESILIENCEShortagesStrategic dependenciesSINGLE MARKET 
 
 
 
     
 
ANNEX 13: PUBLIC ADMINISTRATION 

the  COVID-19 

reforms.  After 

This  Annex  outlines  the  performance  of 
is 
Austria’s  public  administration,  which 
essential for providing services and carrying 
out 
crisis, 
government  effectiveness  in  Austria  remained 
above  the  EU  average (115),  despite  challenges  in 
the  alignment  of  policymaking  and  policy 
implementation  across  different 
levels  of 
government.  The  government  continues  to  pursue 
its reform objectives, set out in the responsible for 
Austria  2020-2024  programme,  focusing  on 
transparency,  simplification  of  decision-making 
structures,  a  new  fiscal  equalisation  scheme,  a 
system, 
modern 
transparent 
sustainable  public  procurement,  electoral 
law 
reform, and an up-to-date law on political parties.  

funding 

and 

Austria’s  regulatory  system 
is  generally 
well-developed. Austria’s overall evidence-based 
policy  making  indicator  is  above  the  EU  average 
(Table  A13.1).  Government  decisions  and  ex  ante 
and ex post evaluations of primary legislation are 
publicly  available.  Regulatory  impact  assessments 
have  been  carried  out  since  2013  but  are  only 
obligatory  for  government  bills  (approximately 
30%  of  all 
laws).  Stakeholder  engagement, 
however,  is  below  the  EU  average  (Graph  A13.1). 
This  is  due  to,  among  other  things,  the  lack  of 
interactive  platforms,  or  the  absence  of  public 
responses 
to  comments 
received  during  consultation (116).  Recent  reforms 
are  aimed  at  improving  public  consultations  by 
allowing 
legislative  proposals 
throughout the entire legislative process. However, 
the 
limited  number  of  public  consultation 
comments  received  by  July  2022  on  non-COVID-
19  related  laws (117)  may  indicate  a  need  for 
awareness-raising, 
to  providing 
platforms and tools.  

from  policymakers 

in  addition 

to  all 

input 

Austria has advanced in the digitalisation of 
its  public  administration  and  the  delivery  of 
digital  services.  In  2021,  79%  of  internet  users 
in  Austria  used  the  internet  for  interacting  with 
public  authorities  versus  65%  on  average  in  the 
EU.  Austria’s  digital  transition  constitutes  one  of 

(115) Worldwide Governance Indicators, 2021.  

(116) European Commission, DG REFORM, Public administration 

and governance: Austria, Publications Office of the EU, 2023 
(forthcoming). 

(117) Austrian Parliament 

(https://www.parlament.gv.at/index.shtml).  

58 

the 

federal 

the main pillars of its recovery and resilience plan 
(RRP).  The  planned  reforms  and  investments  are 
expected  to  accelerate  the  digital  transformation 
of 
reduce 
administrative  procedures  for  companies  and 
individuals.  The  implementation  of  the  ‘once-only’ 
principle  is  expected  to  simplify  administrative 
requirements  and  encourage 
in 
particular for SMEs. 

administration, 

investment, 

Graph A13.1: Indicators of regulatory policy and 
governance: stakeholder engagement 

Source: Indicators of Regulatory Policy and Governance 
Surveys 2017 and 2021 (http://oe.cd/ireg) 

Participation  in  adult  learning  is  above  the 
EU average, and gender parity is still lagging 
behind.  The  indicators  show  an  older  workforce 
than the EU-27 average in the NACE O sector (i.e., 
public administration, defence, and social security) 
(Table  A13.1),  due  to  restrictive  recruitment 
policies (118).  The  share  of  public  employees  with 
higher  education  in  the  same  sector,  and  gender 
in  senior  management  positions,  both 
parity 
remain below the EU average. The adoption of the 
new amendment to the public service law in 2022 
is expected to help  reverse some of these trends, 
by  encouraging  young  people  to  apply  for  jobs  in 
the  public  sector  and  by  offering  administrative 
trainees  with  a  university  a  significantly  higher 
starting salary. Part-time employees will now also 
receive  equal  pay  for  additional  work  which  is 
expected  to  benefit  the  large  group  of  part-time 
female employees.  

(118) European Commission, DG REFORM, Public administration 

and governance: Austria, Publications Office of the EU, 2023 
(forthcoming).   

0.000.501.001.502.002.503.0000.511.522.53AT2017AT2021AT2017AT2021Primary lawsSecondary lawsStakeholder engagement MethodologyOversightSystematic adoptionTransparencyEU-27 
 
                                                 
   
                                                 
 
Table A13.1: Public administration indicators 

(1) High values denote a good performance, except for indicator # 6. (2) 2022 value. If not available, the 2021 value is shown. 
(3) 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. (4) Defined as the absolute value of the difference between the 
percentage of men and women in senior civil service positions. 
Flags: (b) break in time series; (d) definition differs; (u) low reliability. 
Source: ICT use survey, Eurostat (# 1); E-government benchmark report (# 2); Open data maturity report (# 3); Labour Force 
Survey, Eurostat (# 4, 5, 7), European Institute for Gender Equality (# 6); Fiscal Governance Database (# 8, 9); OECD Indicators of 
Regulatory Policy and Governance (# 10). 

has 

Austria 

continued 

The 
justice  system  performs  efficiently 
overall. The time it takes to hand down a decision 
in  litigious  civil  and  commercial  cases  remains 
very fast (135 days on average in first instance in 
2021). 
to  make 
improvements in administrative cases, with a very 
high  clearance  rate  (125.2%  in  2021)  and  a 
notable reduction in the time taken to hand down 
a  decision,  though  this  remains  high  overall  (312 
days  on  average  in  2021  compared  to  388  in 
2020). The overall quality of the justice system is 
good.  The  level  of  digitalisation  is  very  advanced. 
in  courts  and 
Digital  tools  are  widely  used 
prosecution  services,  including  an  electronic  case 
management  system,  technology  for  distance 
communication  and  a  secure  remote  working 
environment  for  judges  and  staff,  electronic  case 
allocation,  and  the  use  of  artificial  intelligence  in 
core  activities.  As  regards  judicial  independence, 
no systemic deficiencies have been reported (119). 

(119) For a more detailed analysis of the performance of the 
justice system in Austria, see the 2023 EU Justice 

Scoreboard (forthcoming) and the country chapter for Austria 
in the 2023 Rule of Law Report (forthcoming). 

59 

AT201720182019202020212022EU-27(2)170.175.378.880.978.5n/a64.82n/an/an/a84.176.377.872.93n/a0.60.70.90.90.80.8432.836.938.138.038.9 (b)41.252.0518.817.818.313.117.8 (b)20.316.9625.424.620.622.019.016.411.071.41.31.31.41.4 (b)1.51.580.60.60.60.70.7n/a0.791.31.31.31.31.3n/a1.5101.89n/an/an/a1.86n/a1.7Medium term budgetary framework indexIndicator (1)E-government and open government dataShare of individuals who used the internet within the last year to interact with public authorities (%)E-government benchmark overall score (3) Open data and portal maturity indexEducational attainment level, adult learning, gender parity and ageingShare of public administration employees with tertiary education (levels 5-8, %)Participation rate of public administration employees in adult learning (%)Gender parity in senior civil service positions (4)Ratio of 25-49 to 50-64 year olds in NACE sector OPublic financial management Strength of fiscal rules indexEvidence-based policy makingRegulatory governance 
                                                 
 
 
 
 
                                                                              
 
   
 
FAIRNESS 
ANNEX 14: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  

The  European  Pillar  of  Social  Rights  is  the 
compass  for  upward  convergence  towards 
better  working  and  living  conditions  in  the 
EU.  This  Annex  provides  an  overview  of  Austria’s 
progress in implementing the Pillar’s 20 principles 
and EU headline and national targets for 2030 on 
employment, skills and poverty reduction. 

Table A14.1: Social Scoreboard for Austria 

Update of 27 April 2023. 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 2023. 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: Eurostat. 

The  Austrian  labour  market’s  performance 
improved  on  the  back  of  a  strong  economic 
recovery  and  remained  robust  in  the  first 
half  of  2022.  The  unemployment  rate  slightly 
rose  in  Q4-2022  to  5.0%  after  having  decreased 
in the first half of 2022. It remains well below the 
EU  average  of  6.1%.  Making  significant  progress 
towards  the  national  employment  rate  target  of 

60 

79.9%  by  2030,  the  employment  rate  increased 
from  2021  by  1.7  percentage  points  (pps)  to 
77.3%  in  2022.  In  addition,  the  Commission 
forecasts  a  robust  development  of  the  labour 
market  in  2023  and  2024 (120).  Increases  in 
Austrian  wages  were  not  enough  to  compensate 
for  the  high  inflation.  Between  Q3-2021  and  Q3-
2022,  the  nominal  wage  per  employee  grew 
by 4.3%, significantly trailing inflation and leading 
to  a  5.1%  decrease  in  real  wages.  This  adds  to a 
critical  situation for the growth of gross domestic 
household income, which in 2022 was still lagging 
behind the 2008 level. 

Women’s labour market potential is not fully 
leveraged. The employment rate of women stood 
at  73.4%  in  2022,  well  below  the  rate  for  men 
(81.2%).  With  51%,  Austria  recorded  one  of  the 
highest female part-time employment rates in the 
EU  (2022).  The  limited  supply  of  affordable  and 
high-quality  childcare  remains  a  major  restraint. 
28.5% of children aged less than 3 years were in 
early childhood education and care (ECEC) in 2021, 
well  below  the  EU’s  33%  Barcelona  target (121). 
Around  EUR 28  million  from  the  Recovery  and 
to  support 
Resilience  Facility 
expanding  childcare  facilities;  however,  there  is 
scope for additional national measures. Increasing 
the  availability  of  high-quality  childcare  may 
contribute  to  tackling  the  high  share  of  women 
working  part-time,  the  high  gender  pay  gap  and 
the  resulting  high  gender  pension  gap.  Other 
challenges  are  the  relatively  low  remuneration  of 
women in part-time work and the unequal division 
of childcare duties between parents. 

is  allocated 

Labour  shortages  are  slowing  economic 
growth (122).  Austria’s  economy  is  increasingly 
experiencing  shortages  of  labour (123),  particularly 
in  construction,  manufacturing, 
the 
healthcare  sector,  ICT,  and  engineering.  The  job 

tourism, 

(120) ECFIN, Autumn 2022 Economic Forecast. 

(121) On 8 December 2022, the Council adopted a 

recommendation on early childhood education and care, 
which follows on the Barcelona target, increasing the target 
to 45% for Austria. 

(122) The number of open vacancies increased in 2022, showing 

considerable regional differences. 

(123) Around 272 000 in November 2022. 

8.463.339.17.84.0877.34.81.297.9517.322.844.1126.36.128.50.3Critical situationTo watchWeak but improvingGood but to monitorOn averagePolicy areaHeadline indicatorEqual opportunities and access to the labour marketEarly leavers from education and training(% of population aged 18-24, 2022)Share of individuals who have basic or above basic overall digital skills (% of population aged 16-74, 2021)Youth NEET rate(% of population aged 15-29, 2022)Gender employment gap(percentage points, 2022)Income quintile ratio(S80/S20, 2021)Dynamic labour markets and fair working conditionsEmployment rate(% of population aged 20-64, 2022)Unemployment rate(% of active population aged 15-74, 2022)Long term unemployment(% of active population aged 15-74, 2022)GDHI per capita growth                                                              (2008=100, 2021)Social protection and inclusionAt risk of poverty or social exclusion rate                                            (% of total population, 2021)At risk of poverty or social exclusion rate for children                       (% of population aged 0-17, 2021)Impact of social transfers (other than pensions) on poverty reduction (% reduction of AROP, 2021)Disability employment gap(percentage points, 2021)Housing cost overburden(% of total population, 2021)Children aged less than 3 years in formal childcare(% of population under 3-years-old, 2021)Self-reported unmet need for medical care(% of population 16+, 2021)Better than averageBest performers 
 
 
 
   
 
                                                 
 
vacancy rate increased by 0.6 pps y-o-y to 4.6% in 
Q4-2022  and  is  one  of  the  highest  in  the  EU, 
significantly  exceeding  the  EU  average  (2.8%). 
These  shortages  might  dampen  economic  growth 
in  some  sectors  and  regions.  In  addition,  skills 
shortages  driven  by  a  lack  of  technical  skills,  a 
regionally  high  demand  of  skilled  workers,  and 
demographic  change  put  more  pressure  on  the 
labour market. 

the 

school 

Improved labour market participation of low-
skilled  people,  older  workers  and  those  with 
a  migrant  background  would  reduce  labour 
shortages.  Around  45%  of 
long-term 
unemployed in Austria have only completed lower-
(Pflichtschule) (124).  Despite 
secondary 
substantially  improving  from  46.3%  in  2015  to 
56.4%  in  2022,  the  employment  rate  of  older 
workers  (aged  55-64)  remains  below  the  EU 
average of 62.3%. In addition, the participation of 
persons with disabilities in the open labour market 
has 
disability 
employment gap increasing by 4.6 pps in 2021 to 
25.1 pps, exceeding the EU average of 23.1 pps.  

deteriorated,  with  Austria’s 

Table A14.2: Situation of Austria on 2030 
employment, skills and poverty reduction targets 

(1) Adult Education Survey, adults in learning in the past 12 
months. 
(2) Number of persons at risk of poverty or social exclusion 
(AROPE), reference year 2019. 
Source: Eurostat, DG EMPL. 

Low  qualifications  and  language  barriers 
hinder  the  labour  market  participation  of 
people  with  a  migrant  background.  In  2014, 
16.6%  of  Austrians  with  a  migrant  background 
had  no  knowledge  or  only  a  little  knowledge  of 
German.  And  in  2021,  23.6%  of  people  with  a 
migrant background aged 25-64 only had a lower-
secondary  school  education. (125)  The  participation 
in 
of  15-19-year-olds  not  born 

in  Austria 

education  in  2020  was  at  61.2%,  well  below 
nationals  (80.7%). (126)  Improving  the  availability 
of  high-quality  ECEC,  all-day  schools,  improved 
teacher training and increased funding are key for 
better  integration.  Additionally,  participation  of 
pupils  with  a  migrant  background  in  regular 
classes and improved access to German language 
courses  facilitates  their  integration  in  society. 
Moreover,  there  is  scope  for  additional  measures 
to  better  integrate  the  increasing  numbers  of 
people  fleeing  Ukraine  into  the  Austrian  labour 
market (127). 

Most  Austrians  have  basic  digital  skills.  At 
8.4%, the early school leaving rate increased only 
slightly  and  remained  broadly  stable  in  2022. 
Around  75%  of  all  students  opted  for  vocational 
programmes in 2021 and 63% of Austrians had at 
least basic digital skills, well above the EU average 
of 54%. 15.8% of Austrian adults had participated 
in  training  over  the  past  4  weeks  in  2022, 
significantly  above  the  EU  average  of  11.9%. 
Austria has set a 2030 national target of 62% of 
adults in training annually, which already stood at 
55.3%  in  2016.  However,  an  ageing  population, 
which  essentially  reduces  the  labour  supply,  and 
the  skills  increasingly  needed  for  the  digital  and 
green  transitions  highlight  the  need  for  further 
efforts.  EU  cohesion policy  funds  support  up-  and 
reskilling  to  address  labour  shortages  and  skills 
gaps  and  help  match  the  needs  of  the  labour 
market. 

Social  development  has  been  affected  by 
recent  crises,  but  the  effects  have  been 
cushioned  by  a  strong  social  system.  The 
number  of  people  at  risk  of  poverty  or  social 
exclusion increased to 17.3% in 2021 from 16.7% 
in  2020,  a  7-year  high,  yet  still  below  the  EU 
average.  Severe  material  and  social  deprivation 
continue  to  decrease  (1.8%  in  2021),  but  more 
people  are  at  risk  of  falling  into  poverty  (14.7%). 
Non-EU 
single-parent 
households  (45.5%)  are  particularly  at  risk  of 
poverty  or  social  exclusion.  In  general,  children 
continued  to  be  at  a  higher  risk  of  poverty  and 
social  exclusion 
(22.8%),  especially 
children  of  foreign-born  parents  (39.4%).  The 
impact  of  social  transfers  (excluding  pensions)  on 
reducing  poverty  continues  to  be  high  (41.96%). 

in  2021 

(32.8%) 

born 

and 

(124) AMS, November 2022. 

(126) See Migration & Integration – Statistisches Jahrbuch 2021. 

(127) See Wie sich AMS-Chef Kopf die niedrige Arbeitslosenquote 

(125) See Migration & Integration – Statistisches Jahrbuch 2022. 

erklärt | kurier.at. 

61 

IndicatorsLatest dataTrend            (2015-2022)National target by 2030EU target by 203077.3(2022)55.3(2016)+85(2021)Poverty reduction2 (thousands)-204-15 000Employment (%)8078Adult learning1 (%)6260 
 
   
 
                                                 
                                                 
The housing overburden rate increased in 2022 to 
7.4% (from 6.1% in 2021) with high energy prices 
being  an  increasing  burden  on  households  (see 
Annex  8).  Although  Austria  is  on  the  right  track, 
there  is  scope  for  further  social  policy  action  to 
achieve  the  country’s  2030  poverty  reduction 
target of 204 000 fewer people at risk of poverty 
or social exclusion. 

62 

 
ANNEX 15: EDUCATION AND TRAINING 

This  Annex  outlines  the  main  challenges  for 
Austria’s education and training system in light of 
the  EU-level 
targets  and  other  contextual 
indicators  under  the  European  Education  Area 
strategic framework, based on the 2022 Education 
and Training Monitor.  

Teacher shortages in compulsory schools and 
in early childhood education and care (ECEC) 
are partially increasing. The teacher population 
is ageing, with 43% of all teachers in Austria being 
above 50 years old (EU: 39.2%). Teacher shortages 
are  already  pronounced  in  certain  subjects  and 
regions.  In  addition,  it  is  increasingly  difficult  to 
recruit  and  train  sufficient  staff  for  ECEC.  The 
government  is  taking  measures  to  improve  the 
attractiveness  of  the  teaching  profession (128),  to 
improve  working  conditions (129),  and  to  facilitate 
the training and integration of lateral entrants (130) 
into the education sector. 

in  ECEC 

Participation 
is  below  the  EU 
average.  Participation  between  the  age  of  3  and 
the  age  of  compulsory  schooling 
remains 
consistently  just  below  90%  (EU:  93%)  and  well 
below the EU -level target for 2030 (96%). In May 
2022,  the  federal  government  concluded  a  five-
year  agreement  with  the  federal  states  (Länder), 
including  a  40%  increase  of  the  annual  federal 
budget  contribution  (EUR   200  million)  by  40%, 
matched  by  an  annual  contribution  of  EUR   63 
million  from  the  regions.  Key  objectives  are  to 
continue  compulsory  participation  of  5-year-olds 
in  ECEC,  to  extend  the  offer  of  ECEC  places,  to 
promote  early  language  learning  and  to  increase 
the  share  of  places  for  under-3-year-olds.  While 
the  agreement  offers  opportunities  for  quality 
improvement, 
ratios 
(albeit  with  a  time  limit),  it  still  falls  short  of 
establishing  a  comprehensive  quality  framework. 
Access  to  quality  ECEC  has  been  the  subject  of 
country -specific recommendations in the past. The 
national  recovery  and  resilience  plan  earmarks 
EUR  28 million to expand ECEC places for children 
below  the  age  of  3  by  5%  until  by  the  end  of 
2023. 

reducing  child-staff 

like 

(128) e.g. biggest promotion campaign in last decades, “Great Job”. 

(129) Salary for young teachers has been increased even so life 

time earning somewhat reduced. 

(130) Possibilities for lateral entry   

continue 

Educational  outcomes 
to  be 
the  socio-
significantly  determined  by 
economic and/or migrant background. The rate 
of early leavers from education and training (ELET) 
remained at 8.4% in 2022, below the EU average 
and already reaching the EU-level target. However, 
despite  an  overall  positive  trend,  the  rate  for 
foreign-born  pupils  (19.2%)  is  about  three  times 
higher  than  the  rate  of  native-born  (6.1%). 
Education  outcomes  remain  greatly  influenced  by 
educational 
socio-economic 
family 
background.  The  OECD 
identifies  significant 
performance  gaps  between  15-year-olds  who 
attend 
oriented 
“Mittelschule”  compared  with  those  attending  the 
more academically oriented “Gymnasium” (131).  

the  more 

vocationally 

and 

Graph A15.1: Early leavers from education and 
training (age 18-24) by country of birth, 2022 
(%) 

Source: Eurostat 

Austria 
is  promoting  digital  education. 
Currently, 75% of 16–-19-year-olds have at least 
basic  digital  skills  (6  pps  above  the  EU  average). 
The 8-point plan on digitalisation aims to improve 
digital  hardware  and  connectivity  in  schools,  the 
digital skills of teachers, and the quality of digital 
learning  content,  including  through  with  improved 
access  to it.  A  key  initiative,  financed through the 
Recovery  and  Resilience  Facility,  is  to  equip  all 
pupils in fifth grade with a digital device (laptop or 
tablet,  at  the  school’s  choice)  to  create  equal 
conditions  for  digital  learning  in  schools.  During 
the  pandemic,  Austria  invested,  in  particular  in 
massive  online 
to 
improve  IT  competences  skills  of  teachers.  Before 
the pandemic, Austrian teachers showed the least 
self-confidence  in  their  IT  skills  compared  to  with 

learning  courses 

(MOOC, 

(131) OECD (2020) Innovating teachers’ professional learning 

through digital technologies, OECD Education Working Paper 
No  237. 

63 

0%5%10%15%20%25%AustriaEUNativeEU-bornNon EU-born 
 
                                                 
   
                                                 
 
Table A15.1: EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Source: (1,3,4,5,7,8,9,10,11) = Eurostat; 2 = OECD (PISA); 6 = European Commission (Joint Research Centre).  Notes: Data is not 
yet available for the remaining EU-level targets under the European Education Area strategic framework, covering 
underachievement in digital skills and participation of adults in learning. The equity indicator shows the gap in the share of 
underachievement in reading, mathematics and science (combined) among 15-year-olds between the lowest and highest quarters 
of socio-economic status. 

STEM graduates, women constitute only 26.3% of 
all STEM graduates, 6.2 pps below the EU average. 

Overall,  Austria  has  a  very  good  vocational 
education  and  training  system,  and  similarly  for 
the adult learning system, but skills shortages and 
inequalities do exist (see Annex 14). 

other  teachers  in  the  EU (132).  Investing  in  their 
skills  strengthens  a  more  integrated  continued 
professional development.  

science, 

attainment 

and  mathematics 

education 
in 

and 
Tertiary 
technology, 
participation 
engineering 
(STEM) 
education  are  high,  but  gender  gaps  persist. 
In  2022,  tertiary  education  attainment  stood  at 
43.1%.  (0.7  pps  more  than  in  2021),  also  above 
the  EU  average  (42%),  but  below  the  EU-level 
target  (45%).    In  2020,  30.6%  of  Austrian 
graduates  had  a  degree  in  STEM  subjects.  With 
this,  Austria  had  one  of  the  highest  EU  shares  of 
STEM  graduates  among  all  graduates  in  the  EU, 
(5.7pps  above  the  EU  average).  However,  despite 
efforts, Austria could not yet significantly increase 
female participation in STEM. In 2020, the share of 
female  STEM  graduates  among  all  graduates 
stood at the EU  average (8.1%). However, in view 
of the high STEM participation of men, this points 
to  a  significant  gender  gap:    among  the  Austrian 

(132) 0ECD (2019) TALIS 2018 

64 

96%88.1%91.9%89.7%202093.0%2020Reading< 15%22.5% 20.0%23.6%201822.5%2018Mathematics< 15%21.8% 22.3%21.1%201822.9%2018Science< 15%20.8% 21.1%21.9%201822.3%2018< 9 %7.3%11.0%8.4% 9.6%Men7.8%12.5%9.5%11.1%Women6.8%9.4%7.4%8.0%Cities9.7%9.6%11.9%8.6%Rural areas4.2%12.2%5.3%10.0%Native5.5%10.0%6.1%8.3%EU-born12.1%u20.7%14.9%20.3%Non EU-born24.3%23.4%23.0%22.1%6Equity indicator (percentage points)::19.2201819.320187Exposure of VET graduates to work based learningTotal ≥ 60% (2025) : :89.8%60.1%45%38.6%36.5%43.1%42.0%Men35.8%31.2%38.7%36.5%Women41.5%41.8%47.6%47.6%Cities48.5%46.2%53.3%52.2%Rural areas31.6%26.9%35.1%30.2%Native40.4%37.7%43.1%43.0%EU-born41.4%32.7%49.8%39.5%Non EU-born28.1%27.0%37.4%35.7%43.3% 38.3%42.6%202039.2%2020Tertiary educational attainment (age 25-34)8Total8By gender9By degree of urbanisation10By country of birth11Share of school teachers (ISCED 1-3) who are 50 years or over1Participation in early childhood education (age 3+)2Low achieving 15-year-olds in:Early leavers from education and training (age 18-24)3Total3By gender4By degree of urbanisation5By country of birth20152022IndicatorTargetAustriaEU27AustriaEU27 
                                                 
 
  
 
ANNEX 16: HEALTH AND HEALTH SYSTEMS 

A  healthy  population  and  an  effective, 
accessible  and  resilient  health  system  are 
prerequisites  for  a sustainable  economy and 
society.  This  Annex  provides  a  snapshot  of 
population health and the health system in Austria.  

In  2021, life  expectancy  in  Austria  was  81.3 
years,  above  the  EU  average  of  80.1  years. 
There  was  no  change  in  life  expectancy  between 
2020  and  2021  despite  a  further  increase  in  the 
number  of  COVID-19  deaths  in  2021 (133).  In 
general,  treatable and preventable mortality rates 
are  lower  than  the  EU  average.  In  2020,  the 
leading  causes  of  death  were  diseases  of  the 
circulatory systems followed by cancer and COVID-
19. However, cancer mortality rates are lower than 
the EU average. 

Graph A16.1: Life expectancy at birth, years 

spending on health is projected to increase by 1.2 
(pps)  of  GDP  by  2070 
percentage  points 
(compared  to  0.9  pps  for  the  EU  overall),  raising 
long-term fiscal sustainability concerns.  

Graph A16.2: Projected increase in public 
expenditure on healthcare over 2019-2070 

AWG reference scenario 
Source: European Commission / EPC (2021) 

Source: Eurostat 

spending  was  directed 

Health  spending  relative  to  GDP  in  Austria 
was  above  the  EU  average  in  2020.  With 
EUR 4 095,  health  spending  per  capita  in  Austria 
was  among  the  highest  in  the  EU  and  well  above 
the EU average of EUR 3 269. The biggest part of 
towards 
healthcare 
inpatient care. With 31.9%, Austria was well above 
the EU average of 26.4%. This is partly reflected in 
a  high  number  of  hospital  beds  compared  to  the 
EU  average.  Spending  on  outpatient  care  was 
26.1%,  above  the  EU  average  of  22.6%.  With 
16.2%, spending on medical goods was below the 
EU  average  of  18.2%.  The  public  share  of  health 
increase 
expenditure  was  76.5%,  a  slight 
compared  to  the  years  before,  but  still  below  the 
EU  average  of  81.2%.  This  points  to  an  elevated 
cost-sharing  rate  for  households  when  accessing 
healthcare.  That  said,  self-reported  unmet  needs 
for medical examination in Austria are among the 
lowest  in  the  EU  (see  Annex  14).  Overall,  public 

(133) Based on data provided directly by Member States to ECDC 
under the European Surveillance System (data current as of 
13 April 2023). 

The share of spending on disease prevention 
in Austria has increased considerably. It went 
up  from  2.1%  (2019)  to  3.6%  (2020),  which  is 
above the EU average of 3.4% (2020). In absolute 
terms, spending on prevention in Austria increased 
by 78% between 2019  and 2020 (compared to a 
26%  increase  for  the  EU  overall).  Across  the  EU, 
this increase  was  primarily  driven  by  spending  on 
control  and 
disease  detection,  surveillance, 
response programmes as part of the public health 
response to COVID-19. Between 2019 and 2020, a 
reported 
remarkable  proportional 
spending was noted in Austria for epidemiological 
surveillance  and 
control 
programmes.  A  further  aspect  that  is  relevant  to 
public health is the consumption of antimicrobials 
for  systemic  use  in  the  community  (expressed  as 
daily defined doses per 1 000 inhabitants per day). 
For Austria (2021), it was half of the EU average, 
pointing to a prudent use of these medicines in the 
health system.  

risk  and  disease 

increase 

in 

In Austria, there are more doctors and nurses 
than  in  the  EU  on  average.  The  number  of 
doctors  per  1 000  population  remained  relatively 
constant at 5.5 in 2021 (EU average: 3.9 in 2020). 
The  number  of  nurses  per  1 000  population  was 
10.5  (2020),  compared  to  an  EU  average  of  8.3 
(2020).  Regarding  the  age  profile  of  nursing 
professionals,  it  has  to  be  noted  that  in  2016, 
24%  were  over  the  age  of  55.  This  raises  some 
concerns  in  terms  of  the  sustainability  of  current 
nursing workforce levels. 

65 

81,881,781,882,081,381,380,980,981,081,380,480,1201620172018201920202021AustriaEU6,66,90,91,20246810EUAustria% of GDP20192070increase 
 
        
                                                 
       
  
 
 
Table A16.1: Key health indicators 

Note:  The EU average is weighted for all indicators, except for (*) and (**), for which the EU simple average is used. The simple 
average for (*) uses data for 2020 or most recent year if former not available. Doctors' density data refer to practising doctors in 
all countries except EL, PT (licensed to practice) and SK (professionally active). Nurses' density data refer to practising nurses in all 
countries except FR, PT, SK (professionally active) and EL (nurses working in hospitals only). 
Source: Eurostat; except: ** ECDC 

Through  its  recovery  and  resilience  plan 
(RRP),  Austria  plans  to  invest  EUR  254 
million  (7.3%  of  the  RRP’s  total  value)  in 
healthcare.  The  largest  health  investment  under 
the RRP aims to expand multi-professional primary 
healthcare  units  across  the  territory.  In  addition, 
the 
the 
implementation  of 
the 
‘early  aid’  for  socially 
national 
disadvantaged  pregnant  women, 
their  young 
children  and  families  and  the  development  of  an 
electronic child pass platform.  

investments 
in 
community  nursing, 

roll-out  of 

comprises 

RRP 

To  supplement  these  investments,  the  RRP 
contains  a  reform  to  strengthen  primary 
healthcare. The overall objective of the measure 
is  to  promote  the  attractiveness  of  working 
conditions  for  general  practitioners  and  other 
health  and  social  professions  in  primary  health 
care.  

66 

20172018201920202021EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)76.275.273.270.4NA91.7 (2020)Cancer mortality per 100 000 population234.3234.0229.6230.5NA242.2 (2020)Current expenditure on health, % GDP 10.410.310.511.5NA10.9 (2020)Public share of health expenditure, % of current health expenditure74.074.775.176.5NA81.2 (2020)Spending on prevention, % of current health expenditure 2.12.12.13.6NA3.4 (2020)Acute care beds per 100 000 population549539531513NA387.4 (2019)Doctors per 1 000 population *5.25.25.35.35.53.9 (2020)Nurses per 1 000 population *6.96.910.410.5NA8.3 (2020)Consumption of antibacterials for systemic use in the community, daily defined dose per 1 000 inhabitants per day (total consumption in CY and CZ) **11.910.49.87.17.214.5 (2021) 
 
 
   
 
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

This  Annex  showcases  the  economic  and 
social  regional  dynamics  in  Austria,  providing 
an  update  on  the  economic,  social  and  territorial 
cohesion  in  and  among  the  Austrian  regions 
compared  with  the  rest  of  the  EU  and  the  main 
regional economic recovery challenges.  

Regional  disparities  in  GDP  per  capita  have 
steadily  decreased (134)  over  the  past  decade 
and  are  among  the  smallest  in  the  EU. 
However,  some  gaps  persist  between  individual 
regions.  In  2020,  GDP  per  capita  (in  purchasing 
power  standard  (PPS))  in  the  regions  of  Salzburg 
and  Wien  corresponded  to  143-144%  of  the  EU 
average but was only 87% in Wien’s neighbouring 
region 
least 
developed region in Austria (135).  

Burgenland,  which 

the 

is 

is 

stagnating 

productivity 

Labour 
or 
decreasing  in  most  regions.  A  substantial 
decline  in  2020  resulted  in  negative  annual 
growth.  Annual  labour  productivity  only  grew  in 
Kärnten  (by  0.4%)  and  Vorarlberg  (by  0.1%)  in 
2011-2020  and  declined  by  0.2%  in  Austria  as  a 
whole. Labour productivity stagnated or declined in 
all other regions, particularly in Wien (-0.8%) (see 
Graph  A17.2).  The  overall  labour  productivity  in 
Austria was 112 in 2021 (compared to EU average 
= 100). 

Graph A17.2: Evolution of labour productivity in 
Austria 

Real  GDP  per  capita  growth  stagnated 
nationwide in 2011-2020 and was lower than 
the  EU  average  (0.6%)  in  all  regions.  Annual 
growth  was  negative  in  Wien  (-0.9%)  and  was 
modest  in  the  other  regions  (ranging  from  -0.2% 
to 0.4%) (see Graph A17.1). 

Graph A17.1: GDP per capita (2010) and GDP 
growth (2011-2020) in Austria 

Source: Eurostat, DG REGIO elaboration  
Unit: real GVA (gross value added) in millions of EUR (2015 
prices) by employment in thousands of persons. 

All  regions  rank  above  the  EU  average  in 
terms  of  competitiveness (137).  There  are  no 
significant  differences 
innovation 
performance.  All  regions  at  NUTS 1  level  are 
classified as strong innovators (138). 

regional 

in 

Source: EUROSTAT, DG REGIO elaboration 
Note: Bubble sizes correspond to population size 

labour  productivity  have 
in 
Disparities 
decreased 
internally  since  2010.  Labour 
productivity (136)  was  114%  of  the  EU  average  in 
purchasing  power  standard  terms  in  2020.  It 
ranged  from  125%  in  Vorarlberg  to  99%  in 
Burgenland.  

(134) 2020 marked a slight downward convergence in GDP per 

capita and labour productivity.  

(135) The terms ‘less/least developed’ and ‘more/most developed’ 
are by reference to other regions in the same country. They 
should not be confused with the classification for fund 
eligibility criteria. 

(136) Labour productivity is measured as gross value added (GVA) 

per person employed. 

in 

investment  between 

Disparities 
the 
Austrian  regions  are  minor.  The  Austrian 
investment rate (gross fixed capital formation as a 
share of GDP) reached 25% in 2019, ranging from 
23%  in  Vorarlberg  to  26%  in  Salzburg  and 
Niederösterreich.  

R&D expenditure is increasing at the national 
level,  but  regional  disparities  remain  high. 
Expenditure on R&D was very high in Steiermark in 
2019 (5.1% of GDP) – substantially higher than in 
Wien  (3.7%)  and  Oberösterreich  (3.5%)  –  and 
lowest in Burgenland (0.9%). At national level, R&D 
investment  has  increased  continuously,  driven  by 

(137) 2022 regional competitiveness index. 

(138) Based on the score in the European innovation scoreboard, 
EU regions fall into four performance groups: innovation 
leaders, strong innovators, moderate innovators and 
emerging innovators. 

67 

-1.2-0.9-0.6-0.30.00.30.60.97090110130150170Annual real GDP per head growth2011-2020 (average % change on the preceding year)GDP (PPS) per head in 2010 (EU = 100)Capital regionOther NUTS2 regionsNational averageEU2745505560657075808590000102030405060708091011121314151617181920thousands of EUR per  personCapital regionOther NUTS2 regionsEU27National average 
 
  
                                                 
  
                                                 
 
Table A17.1: Selected indicators at regional level - Austria 

the 

lower  than  10%  in  the  NUTS 3  regions  of  Wien, 
and 
of  Steiermark  and 
Niederösterreich. Increases were higher than 20% 
in Vorarlberg, Salzburg and Tirol.  

sub-regions 

impact  was  particularly  acute 

The  COVID-19  pandemic  led  to  an  economic 
decline  in  Austria  (-7.2%)  and  the  labour 
market  has  not  yet  fully  recovered.  GDP  per 
in  2020.  The 
capita  dropped 
in  all  regions 
in 
pandemic's 
touristic  regions,  such  as  Salzburg  (-8.4%)  and 
Tirol  (-10.6%).  Unemployment  was  still  high  in 
2021 and well above the 2019 level but remained 
below  the  EU  average.  Excluding  Wien,  where 
unemployment  at  12%  is  twice  as  high  as  the 
country 
the 
unemployment rate remained small.  

disparities 

average, 

the 

in 

Source: EUROSTAT, EDGAR Database 

both 
the  public  and  private  sectors.  R&D 
investment  in  Austria  has  exceeded  3%  of  GDP 
since  2014,  reaching  3.22%  of  GDP  in  2021  (see 
Annex  11  on  Innovation),  but  is  still  below  the 
national  target  of  3.76%  of  GDP  for  2020.  The 
high-technology  labour  market,  a  sector  in  which 
R&D  is  crucial,  is  particularly  subject  to  regional 
disparities.  High  technology  employment  reached 
7.2%  in  Wien  in  2020  but  was  only  2.1%  in 
Vorarlberg, an ageing region. 

Austria's 

changes. 

Austria  is  experiencing  regionally  divergent 
demographic 
national 
population increased by 6.4% in 2011-2020. There 
were  significant  increases  of  more  than  10%  in 
large agglomerations (the NUTS 3 regions of Wien 
and  Graz),  but  some  sub-regions  of  Kärnten, 
Steiermark  and  Tirol  registered  a  demographic 
decline  (ranging  from  -3.2%  to  -5.2%).  This 
reflects  rural-urban  shifts  within  Austria,  which 
result  in  the  population  rising  in  urban  areas  and 
expanding conurbations.  

Austria's  population  grew  primarily  due  to 
the  impact  of  positive  net  migration  (+6.3% 
in  2011-2020).  The  increases  in  net  migration 
were significant in the large agglomeration NUTS 3 
regions  of  Wien,  Wiener  Umland/Nordteil,  Wiener 
Umland/Südteil  and  Nordburgenland  (more  than 
10%).  Only  some  subregions  of  Tirol  and  Kärnten 
and Steiermark registered negative net migration. 

Population  ageing  may  become  a  challenge. 
The population aged over 65 increased by 15% in 
2011-2020. Over 19% of the population was aged 
over  65  in  2020,  which  was  one  of  the  lowest 
proportions in the EU. The working-age population 
increased by 6.1% in 2011-2020, but the share of 
young people under 20 stagnated (-0.5%). There is 
no  specific  geographical  pattern  in  population 
ageing.  Increases  in  the  older  population  were 

68 

NUTS 2 RegionGDP per head (PPS)GDP per head growthPopulation growthUnemployment rateR&D expenditureEmployment in high-technology sectorsRegional Competitiveness Index (RCI)Quality of Government IndexEU27=100, 2021Avg % change on preceding year, 2011-2020Total % change, 2011-2020% of active population, 2021% of GDP, 2019% of total employment, 2020EU27=100, 2022Range 0-100, 2021European Union1001.02.07.02.05.0100.049.0Österreich1230.06.46.23.14.1113.8-Burgenland870.43.95.10.92.4106.469.8Niederösterreich1040.34.95.11.82.973.9Wien143-0.912.112.13.77.264.7Kärnten1090.41.05.63.24.6105.968.7Steiermark1120.53.34.35.13.8109.672.1Oberösterreich1260.45.93.73.53.4113.670.0Salzburg1440.06.04.61.72.8110.971.4Tirol123-0.27.24.82.83.6110.170.9Vorarlberg1400.57.84.11.82.1110.672.5118.9 
 
  
 
MACROECONOMIC STABILITY 
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS 

The 

the 

sector 

concentration 

Banking-sector 

main 
banking 

Austria  has  a  large  banking  sector,  with 
financial 
banks 
being 
intermediaries. 
is 
predominantly domestically owned (87.4% of total 
banking-sector  assets),  but  two 
large  banks 
(Unicredit Austria and BAWAG) are majority foreign 
owned. Austria has several large credit institutions, 
two of the largest of which (Erste Group Bank and 
Raiffeisen  Bank  International)  have  a  significant 
footprint  in  central,  eastern  and  south-eastern 
has 
Europe. 
increased  slightly  since  2019,  with  the  share  of 
total  assets  held  by  the  five  largest  banks 
amounting  to  38.7%  at  the  end  of  2021  (Table 
A18.1).  The  use  of  capital-market  funding  by 
companies has remained subdued, as the market-
funding ratio stood slightly below 32.2% in 2022, 
below  its  2021  level  and  markedly  below  the  EU 
average  of  50%.  After  a  weak  performance  in 
2020, 
financing  has  expanded 
steadily. It more than tripled in 2022 compared to 
2021,  with  the  volume  of  green-bond  issuance 
reaching  EUR 6.3 bn  in  2022.  To  support  the 
development  of  the  green-bond  market  and  the 
funding  of  environmentally  friendly  projects,  the 
Austrian government launched its first green-bond 
issuance (for EUR 4 bn) in May 2022. In addition to 
longer-term green bonds, the Austrian government 
is also the EU’s first government to include short-
term 
treasury  bills  and 
(i.e. 
commercial paper) in its green-debt programme. 

instruments 

sustainable 

Austrian  banks  have  weathered  well  the 
challenges posed  by  the  COVID-19  pandemic 
and  the  slowdown  in  economic  growth.  The 
system-wide solvency ratio stood at 18.8% in the 
third  quarter  of  2022,  lower  than  at  the  end  of 
2021 (Table A18.1), as a large bank took a capital 
hit  from  its  exposure  to  Russia.  Although  the 
capitalisation  of  Austrian  banks  has  gradually 
improved  in  recent  years,  the  largest  banks  still 
have  lower  capital  buffers  than  their  euro-area 
improved  for  both 
peers.  Asset  quality  has 
corporates  and  households,  with 
the  non-
performing-loan ratio declining to 1.6% in the third 
quarter of 2022 (below the EU average). Banking-
sector  profitability  remained  resilient  and  further 
improved  in  2022,  with  return  on  equity  standing 
at  7.3%  in  Q3-2022  (above  the  EU  average  of 
6.1%).  Due  to  efforts  made  by  banks  to  reduce 
costs  and  rationalise  their  branch  network,  the 
cost-to-income-ratio  declined  to  52.1%  in  Q3-
2022  (down  from  59.3%  at  the  end  of  2021), 

69 

liquidity  position  and 

below  the  EU  average  of  60.6%.  Banks  have  a 
comfortable 
liquidity-
coverage  ratios  markedly  above  the  regulatory 
minima.  In  recent  years,  banks  have  benefited 
from  an  increase  in  deposits,  in  particular  retail 
deposits, and from abundant central bank liquidity, 
which stood at 6.4% of total liabilities in Q3-2022. 
Mainly  due  to  the  strong  deposit  franchise  of 
banks,  the  loan-to-deposit  ratio  has  been  on  a 
declining  path  since  2019  and  stood  at  89.3%  in 
Q3-2022,  albeit  still  above  the  EU  average  of 
88.6%. 

Although  banking-sector  resilience  has  been 
safeguarded,  several  vulnerabilities  require 
closer  monitoring.  The  energy-intensive  sectors 
are  being  affected  by  the  increase  in  energy 
prices,  energy  bottlenecks,  and  supply-chain 
bottlenecks.  This  in  turn  is  putting  strain  on  the 
debt-servicing 
capacity  of  more  vulnerable 
corporate  borrowers  and  may  impact  the  asset 
quality  of  banks.  Meanwhile,  indebted  households 
are  also  faced  with  higher  debt-service payments 
and  the  erosion  of  their  disposable 
income. 
Although the share of loans with variable interest 
rates  has  decreased  steadily  in  recent  years, 
roughly  50%  of  new  loans  have  variable  interest 
rates.  In  addition,  more  than  a  third  of  mortgage 
loans to households are still granted with variable 
interest  rates.  The  exposure  of  the  Austrian 
banking  sector  to  Russia  also  warrants  close 
oversight.  According  to  the  European  Banking 
Authority  dashboard  (Q1-2022),  the  exposure  of 
Austrian  banks  to  Russian  counterparts  amounted 
to  EUR 14.98  bn  or  19.9%  of  total  EU  exposure 
towards Russian counterparts by end-March 2022. 
This exposure, which is concentrated in one credit 
institution,  has  been  manageable  from  a  capital 
perspective,  but  further  second-round  effects  and 
reputational risks cannot be excluded. 

further 

in  2022.  Lending 

Due to favourable macroeconomic conditions, 
to  households  and  corporates 
lending 
expanded 
to 
corporates  accelerated  in  the  first  half  of  2022, 
with increased credit demand due to: (i) increased 
capital  and 
financing  needs 
inventories;  and 
the 
tightening  of  monetary  policy 
in  the  future. 
in  2022, 
Lending  to  households  also  grew 
supported  by  stable  growth  in  mortgage  lending 
and  more  robust  growth  in  consumer  lending 
compared  to  2021.  Meanwhile,  the  normalisation 

for  working 
(ii)  expectations  about 

 
 
 
 
Table A18.1: Financial soundness indicators 

(1) Last data: Q3 2022.  
(2) Data is annualized. 
Source: ECB, Eurostat, S&P Global Capital IQ Pro. 

of  monetary  policy  also  led  to  an  increase  in  the 
cost  of  lending  to  household  and  companies,  in 
particular in the second half of 2022. The interest 
rate  for  new  mortgage  loans  increased  to  2.95% 
in November 2022, 1.75 percentage points higher 
than  at  the  end  of  2021,  and  the  highest  level 
since 2011.  

Graph A18.1: Housing prices 

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

The  real-estate  market  in  Austria  has  been 
buoyant  since  the  mid-2000s,  but  recent 

70 

from 

stemming 

sustainable 

developments  point  to  a  slowdown  in  the 
growth  rate  of  house  prices.  Since  mid-2020, 
house  prices 
increased  for  eight  successive 
quarters  by  more  than  10%  year-on-year.  After 
increasing  by  13.1%  year-on-year  in  Q2-2022, 
growth in house prices moderated in Q3-2022, but 
were  still  up  by  more  than  10%  year-on-year.  In 
recent  years,  Austria  has  introduced:  (i)  non-
binding  macro-prudential  measures  to  mitigate 
vulnerabilities 
real-estate 
exposures;  and  (ii)  enhanced  real-estate  reporting 
requirements for banks. However, these measures 
have  brought  only  limited  results  in  terms  of 
achieving 
lending. 
Following  the  European  Systemic  Risk  Board’s 
2021 recommendation on the Austrian real-estate 
sector,  banking  supervisors  introduced  binding 
borrower-based  measures  to  mitigate  the  risks 
associated with real-estate financing. The adopted 
measures,  applying  to  new  mortgage  loans  from 
1 July 2022, include upper limits for loan-to-value 
ratios (90%), debt-service-to-income ratios (40%), 
and  loan  maturities  (35  years).  These  limits  are 
that  provide  credit 
subject 
institutions  with  sufficient  operational  flexibility. 
Meanwhile, private-sector debt as a percentage of 
GDP declined to 129.7% at the end of 2021 (down 
from  130.4%  in  2020)  but  remained  markedly 
above the 2019 level (Table A18.1). 

to  exemptions 

estate 

real 

020406080100120140160180200201720182019202020212022EUMedianTotal assets of the banking sector (% of GDP)219.5217.9219.6252.9246.2225.2276.8207.9Share (total assets) of the five largest banks (%)36.136.036.038.538.7--68.7Share (total assets) of domestic credit institutions (%)176.377.482.483.085.987.4-60.2NFC credit growth (year-on-year % change)6.99.37.05.08.57.7-9.1HH credit growth (year-on-year % change)3.03.64.34.55.93.7-5.4Financial soundness indicators:1        - non-performing loans (% of total loans)3.52.62.22.01.81.61.81.8- capital adequacy ratio (%)18.918.618.719.519.318.818.619.8- return on equity (%)28.78.67.84.16.47.36.16.6Cost-to-income ratio (%)165.563.863.160.859.352.160.651.8Loan-to-deposit ratio (%)197.898.8100.990.488.689.388.678.0Central bank liquidity as % of liabilities3.13.02.58.310.36.4-2.9Private sector debt (% of GDP)122.3122.9121.5130.4129.7--120.7Long-term interest rate spread versus Bund (basis points)26.529.131.628.528.657.0-93.3Market funding ratio (%)35.033.832.534.232.2-50.840.0Green bonds issued to all bonds (%)0.40.40.91.11.42.43.92.31-34-1011-1718-2425-27Colours indicate performance ranking among 27 EU Member States. 
  
 
 
 
   
 
ANNEX 19: TAXATION  

This  Annex  provides  an 
indicator-based 
overview  of  Austria’s  tax  system.  It  includes 
information on the tax structure (the  types of tax 
that Austria derives most of its revenue from), the 
tax  burden  on  workers,  and  the  progressivity  and 
redistributive  effect  of  the  tax  system.  It  also 
provides 
tax  collection  and 
compliance. 

information  on 

Austria’s tax revenues are high in relation to 
GDP,  with  the  highest  contribution  coming 
from  labour  taxation  while  growth-friendly 
tax  bases  appear  to  be  underused.  Despite  a 
series  of  tax  reforms  (in  2005,  2010,  2015  and 
two  in  2022),  Austria  remains  a  high-tax  country 
with a tax-to-GDP ratio above the EU average. As 
indicated in Table A19.1, labour tax revenues as a 
percentage of GDP were among the highest in the 
EU  in  2021.  Revenues  from  consumption  taxes 
and  environmental  taxes  as  a  percentage  of  GDP 
were  very  close  to  the  EU  aggregate.  Revenues 
from capital taxes and property taxes were below 
the EU aggregate. Recurrent taxes on property as a 
percentage  of  GDP  in  Austria  were  among  the 
lowest  in  the  EU,  also  because  the  cadastral 
values  serving  as  their  tax  base  are  largely 
outdated.  Moreover,  Austria  has  no  inheritance  or 
gift taxes.  

Table A19.1: Taxation indicators 

Austria  has  recently 
introduced  several 
reforms  to  the  tax  system.  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 represents an important 
project  from  the  Recovery  and  Resilience  Plan 
(RRP).  Furthermore,  Austria  abolished  bracket 
creep  in  personal  income  tax  by  indexing  tax 
brackets  with  two  thirds  of  inflation  as  of  2023. 
The  remaining  third  has  to  be  used  for  further 
discretionary relief measures to be adopted by the 
ministerial  council  each  year.  Under  a  no-policy 
change assumption, this measure reduces the tax 
wedge. As one of the reform measures as part of 
its  RRP  Austria  also  reduced  its  lowest  personal 
income  tax  (PIT)  rate  from  25%  to  20%  and 
extended  the  application  of  the  top  PIT  rate  of 
55%  until  2025  for  income  above  EUR 1 million. 
Further reducing the labour tax burden beyond the 
adjustment to inflation  (especially  for  low-income 
earners)  and  making  greater  use  of  growth-
friendly  taxes  (e.g.  recurrent  property  taxes  and 
inheritance  and  gift  taxes)  would  have  the 
potential  to  boost  economic  growth  and  to  make 
the tax system fairer.  

(1) Forward-looking effective tax rate (OECD). 
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average  
For more data on tax revenues as well as the methodology applied, see European Commission, Directorate-General for Taxation 
and Customs Union, Taxation trends in the European Union: data for the EU Member States, Iceland, Norway and United Kingdom: 
2021 edition, Publications Office of the European Union, 2021, https://data.europa.eu/doi/10.2778/843047 and the Data on 
Taxation webpage, https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en. 
For more details on the VAT gap, see European Commission, Directorate-General for Taxation and Customs Union, VAT gap in the 
EU: report 2022, Publications Office of the European Union, 2022, https://data.europa.eu/doi/10.2778/109823.  
Source: European Commission, OECD. 

71 

2010201920202021202220102019202020212022Total taxes (including compulsory actual social contributions) (% of GDP)41.142.742.143.337.939.940.040.6Labour taxes (as % of GDP)23.123.724.224.220.020.721.320.9Consumption taxes (as % of GDP)11.611.411.011.210.811.110.711.2Capital taxes (as % of GDP)6.47.66.97.97.18.18.08.5Total property taxes (as % of GDP)0.70.80.90.91.92.22.22.2Recurrent taxes on immovable property (as % of GDP)0.20.20.20.21.11.21.21.1Environmental taxes as % of GDP2.32.32.12.22.42.42.22.2Tax wedge at 50% of average wage (Single person) (*)38.438.636.837.234.033.932.331.932.131.7Tax wedge at 100% of average wage (Single person) (*)48.247.947.547.846.841.040.139.939.739.7Corporate income tax - effective average tax rates (1) (*)24.023.523.519.519.419.1Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)10.39.79.710.18.67.78.17.8Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)7.510.331.640.7VAT Gap (% of VAT total tax liability, VTTL)7.78.611.09.1AustriaEU-27Tax structureProgressivity & fairnessTax administration & compliance 
 
 
 
 
       
 
 
 
 
 
 
 
 
Graph A19.1: Tax revenues from different tax types as % of total taxation 

Note: Values for EU are GDP-weighted EU averages (EU aggregates) 
Source: European Commission 

digital tax forms and certificates. The VAT gap (the 
gap  between  revenues  actually  collected  and  the 
theoretical tax liability) slightly increased in Austria 
to  8.6%  in  2020,  which  was  contrary  to  the  EU 
trend but still below the EU-wide VAT gap of 9.1%. 
Moreover,  the  average  forward-looking  effective 
corporate  income  tax  rates  were  considerably 
higher than the EU average in 2021.  

Graph A19.2: Tax wedge for single and second 
earners as a % of total labour costs, 2022 

Note: Second earner tax wedge assumes first earner at 100% 
of the average wage and no children. 
Source: European Commission 

Austria’s  tax-benefit  system  helps  reduce 
income inequality, but the labour tax burden 
is  relatively  high  at  various  wage  levels.  In 
2022,  the  labour  tax  wedge  was  substantially 
higher  than  the  EU  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  (see  Graph  A19.2).  Second  earners 
at  a  wage  level  of  67%  of  the  average  wage, 
whose  spouses  earns  the  average  wage (139),  are 
subject to a tax wedge that is higher than the EU 
average,  although  they  are  only  taxed  slightly 
more  heavily  than  single  persons  at  the  same 
wage 
tax-benefit  system 
the 
effectively  addresses  income  inequality.  In  2021, 
the  tax  benefit  system  helped  reduce  income 
inequality, as measured by the GINI coefficient, by 
more than the EU average. 

level.  Overall, 

Austria  performs  relatively  well  on  tax 
compliance and tax administration, including 
on  digitalisation.  Austria  is  doing  moderately 
well in digitalising its tax administration, which can 
help  reduce  tax  arrears  and  compliance  costs. 
Outstanding 
increased  by  2.8 
percentage points (pps) to 10.3% of total revenue 
in 2020, compared to 2019. The EU Annual report 
on  taxation  2022  highlights  the  fact  that  Austria 
improved assistance to taxpayers by setting up an 
online  portal  for  submitting  tax-related  requests 
(e.g.  for  tax  deferrals  or  refunds)  and  developed 

tax  arrears 

(139) For the methodology of the tax wedge for second earners 

see OECD (2016) “Taxing Wages 2014-2015” 
(https://www.oecd-ilibrary.org/sites/tax_wages-2016-4-
en/index.html?itemId=/content/component/tax_wages-2016-
4-en) 

72 

34.041.946.850.543.4202530354045505550100150Tax wedge, % of total labour costsEarnings in % of the average wageSingle earner - ATSingle earner - EU averageSecond earner -  ATSecond earner -  EU average51.4327.5421.0155.8725.9118.22Tax revenue shares in 2021, Austria (outer ring) and EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capital3.024.321.921.000.050.190.442.641.632.750123456Austria -environmentaltaxationEU -environmentaltaxationAustria - propertytaxationEU - propertytaxationEnvironmental and property taxation as % of total tax revenue, Austria and the EUEnergy taxesTransport taxesResource/pollution taxesRecurrent property taxesOther property taxes 
                                                 
      
 
 
 
       
 
ANNEX 20: TABLE WITH ECONOMIC AND FINANCIAL INDICATORS 

Table A20.1: Key economic and financial indicators 

(1) Domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches. 
(2) Net international investment position (NIIP) excluding direct investment and portfolio equity shares. 
Source: Eurostat and ECB as of 2 May 2023, where available; European Commission for forecast figures (Spring forecast 2023). 

73 

2004-072008-122013-1920202021202220232024Real GDP (y-o-y)3.00.61.4-6.54.65.00.41.6Potential growth (y-o-y)2.11.01.11.01.31.41.41.4Private consumption (y-o-y)1.90.90.8-8.03.64.11.42.1Public consumption (y-o-y)2.11.21.1-0.57.82.9-0.40.3Gross fixed capital formation (y-o-y)1.7-0.23.0-5.38.7-0.90.01.1Exports of goods and services (y-o-y)7.61.23.4-10.79.611.11.52.5Imports of goods and services (y-o-y) 6.21.33.4-9.213.75.72.02.3Contribution to GDP growth:Domestic demand (y-o-y)1.90.71.3-5.65.62.50.61.4Inventories (y-o-y)0.4-0.1-0.10.10.7-0.30.00.0Net exports (y-o-y)0.90.00.1-1.1-1.73.0-0.20.2Contribution to potential GDP growth:Total Labour (hours) (y-o-y)0.30.00.30.20.30.40.50.5Capital accumulation (y-o-y)0.70.50.60.50.60.60.50.5Total factor productivity (y-o-y)1.20.50.20.30.30.40.40.4Output gap0.2-0.30.1-5.4-2.41.10.00.2Unemployment rate5.75.15.76.06.24.84.95.0GDP deflator (y-o-y)2.11.71.82.61.95.07.24.2Harmonised index of consumer prices (HICP, y-o-y)2.02.31.61.42.88.67.13.8HICP excluding energy and unprocessed food (y-o-y)1.62.01.92.02.15.77.45.0Nominal compensation per employee (y-o-y)2.52.22.31.82.84.68.36.6Labour productivity (real, hours worked, y-o-y)2.40.60.62.5-0.22.0-0.4-0.8Unit labour costs (ULC, whole economy, y-o-y)0.92.51.97.10.32.28.55.9Real unit labour costs (y-o-y)-1.20.80.24.4-1.7-2.61.31.7Real effective exchange rate (ULC, y-o-y)-0.40.40.53.0-0.1-1.52.32.1Real effective exchange rate (HICP, y-o-y)0.1-0.40.71.60.2-1.4..Net savings rate of households (net saving as percentage of net disposable income)11.210.07.513.312.0...Private credit flow, consolidated (% of GDP)5.92.23.04.47.4...Private sector debt, consolidated (% of GDP)124.1129.7123.7130.4129.7...of which household debt, consolidated (% of GDP)50.953.150.553.252.1...of which non-financial corporate debt, consolidated (% of GDP)73.276.673.277.277.6...Gross non-performing debt (% of total debt instruments and total loans and advances) (1).3.43.91.81.6...Corporations, net lending (+) or net borrowing (-) (% of GDP)0.01.90.55.22.42.21.80.3Corporations, gross operating surplus (% of GDP)26.925.324.225.025.724.825.223.0Households, net lending (+) or net borrowing (-) (% of GDP)5.24.02.45.64.01.21.32.2Deflated house price index (y-o-y)0.72.93.56.19.93.8..Residential investment (% of GDP)4.44.34.45.05.35.2..Current account balance (% of GDP), balance of payments2.92.61.93.00.40.70.71.2Trade balance (% of GDP), balance of payments3.83.23.33.00.51.4..Terms of trade of goods and services (y-o-y)-0.7-0.70.20.8-1.3-3.51.80.7Capital account balance (% of GDP)-0.1-0.1-0.2-0.10.00.1..Net international investment position (% of GDP)-12.8-5.15.111.514.714.6..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2)-9.8-11.3-7.8-4.6-4.2-4.6..IIP liabilities excluding non-defaultable instruments (% of GDP) (2)175.9193.7160.3158.2155.7144.0..Export performance vs. advanced countries (% change over 5 years)13.5-3.5-4.85.91.7...Export market share, goods and services (y-o-y)-0.5-4.80.60.5-3.87.0-1.1-1.2Net FDI flows (% of GDP)1.42.80.72.81.8-0.2..General government balance (% of GDP)-2.8-3.2-1.0-8.0-5.8-3.2-2.4-1.3Structural budget balance (% of GDP)..-0.8-4.9-4.4-3.8-2.5-1.5General government gross debt (% of GDP)66.579.179.582.982.378.475.472.7forecast 
 
 
 
      
 
 
 
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS 

This  Annex  assesses  fiscal  sustainability 
risks for Austria over the short, medium and 
long term. It follows the same multi-dimensional 
approach  as  the  European  Commission’s  2022 
Debt Sustainability Monitor, updated based on the 
Commission 2023 spring forecast. 

1  -  Short-term  risks  to  fiscal  sustainability 
low  overall.  The  Commission’s  early-
are 
detection  indicator  (S0)  does  not  signal  major 
short-term  fiscal  risks  (Table A21.2) (140).  Gross 
financing  needs  are  expected  to  decline  over  the 
short term (2023-2024),  reaching around 15% of 
GDP by 2024, also below the recent peak in 2020 
(Table 1 
this  annex).  Financial  markets’ 
perceptions  of  sovereign  risk  are  positive,  as 
confirmed by the ratings of the main agencies. 

in 

2 - Medium-term risks to fiscal sustainability 
are low overall.  

The  DSA  for  Austria  shows  that,  under  the 
baseline,  the  government  debt  ratio 
is 
projected  to  decline  over  the  2020s  before 
increasing  again  slightly,  though  remaining 
above  60%  of  GDP  in  2033  (at  69%  of 
GDP) (Table 1) (141) (142).  The  assumed  structural 
primary  balance  (a  small  deficit  of  0.2%  of  GDP) 
contributes  to  these  developments.  It  appears 
plausible  compared  with  past  fiscal  performance, 

(140) The S0 is a composite indicator of short-term risk of fiscal 
stress. It is based on a wide range of macro-financial and 
fiscal variables that have proven to perform well in the past 
in detecting situations of upcoming fiscal stress.  

(141) The assumptions underlying the Commission’s ‘no-fiscal-
policy-change’ baseline notably comprise: (i) a structural 
primary deficit, before ageing costs, of 0.2% of GDP as of 
2024; (ii) inflation converging linearly towards the 10-year 
forward inflation-linked swap rate 10 years ahead (which 
refers to the 10-year inflation expectations 10 years from 
now); (iii) the nominal short- and long-term interest rates on 
new and rolled over debt converging linearly from current 
values to market-based forward nominal rates by T+10 (as 
for all Member States); (iv) real GDP growth rates from the 
Commission 2023 spring forecast until 2024, followed by 
EPC/OGWG ‘T+10 methodology’ projections between T+3 and 
T+10, i.e. for 2025-2033 (on average 1.2%); (v) ageing costs 
in line with the 2021 Ageing Report (European Commission, 
Institutional Paper 148, May 2021). For information on the 
methodology, see the 2022 Debt Sustainability Monitor 
(European Commission, Institutional Paper 199, April 2023). 

indicating  that  the  country  has  ample  room  for 
corrective action if needed. At the same time, the 
baseline projection benefits up to 2033 from a still 
favourable  (although  declining)  snowball  effect, 
notably  thanks  to  the  impact  of  Next  Generation 
EU,  with  real  GDP  growth  at  around  1.2%  over 
2025-2033.  Government  gross  financing  needs 
are  expected  to  remain  relatively  limited  over the 
projection  period,  remaining  at  around  14%  of 
GDP until 2033, broadly unchanged compared with 
the level forecast for 2024. 

is  stress-tested 
The  baseline  projection 
against  four  alternative  scenarios  to  assess 
the  impact  of  changes  in  key  assumptions 
(Graph 1).  For  Austria,  reverting  to  a  historical 
‘historical  structural 
fiscal  position  under  the 
primary  balance  (SPB)’  scenario  would  lower  the 
debt  level.  If  the  SPB  gradually  converged  its 
historical  15-year  average  (a  surplus  of  0.2%  of 
GDP),  the  projected  debt-to-GDP  ratio  would  be 
about  2 pps.  lower  than  in  the  baseline  by  2033. 
The  ‘lower  structural  primary  balance’  scenario 
(with  the  SPB  level  permanently  1.3  pps.  lower 
than in the baseline) would lead to a significantly 
higher government debt-to-GDP ratio (+13 pps. of 
GDP  by  2033)  compared  with  the  baseline.  A 
permanent  worsening  of 
the  macro-financial 
‘adverse 
reflected  under 
conditions,  as 
interest-growth  rate  differential’  scenario  (with  a 
differential  1  pp.  higher  than  the  baseline)  would 
also  result  in  a  persistently  higher  government 
debt-to-GDP  ratio,  by  around  6  pps.  of  GDP  by 
2033, as compared with the baseline. A temporary 
worsening  of  financial  conditions,  as  reflected  in 
the  ‘financial  stress’  scenario  (with  a  temporary 
increase  of  interest  rates  by  1  pp.),  would  only 
marginally increase the debt ratio (+0.6 pp. of GDP 
by 2033) compared with the baseline.  

the 

low 

risk 

(Graph 2) (143). 

Additionally,  stochastic  debt  projections 
indicate 
These 
projections point to a 16% probability of the debt 
ratio in 2027 being greater than in 2022, entailing 
low  risk  given  the  initial  moderate  level  of  debt 
However,  some  uncertainty  (as  measured  by  the 
difference  between  the  10th  and  90th  debt 

(142) Table 1 shows the baseline debt projection and its 

(143) These projections show the impact on debt of 2000 different 

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.  

shocks affecting the government’s primary balance, 
economic growth, interest rates and exchange rates. The 
cone covers 80% of all simulated debt paths, therefore 
excluding tail events 

74 

 
 
                                                 
                                                 
 
 
Finally,  several  additional  risk  factors  need 
to  be  considered  in  the  assessment.  On  the 
one hand, risk-increasing factors are related to the 
recent increase in interest rates and  the fact that 
around  60%  of the  debt  is  held by  non-residents. 
In  addition,  some  contingent  liability  risks  stem 
from  the  private  sector, including  via  the  possible 
materialisation  of  state  guarantees.  On  the  other 
the 
hand, 
lengthening  of  debt  maturity  in  recent  years  and 
the currency denomination of debt. In addition, the 
structural  reforms  under  the  NGEU/RRF,  if  fully 
implemented, could have a further positive impact 
on GDP growth in the coming years, and therefore 
help to mitigate debt sustainability risks. 

risk-mitigating 

factors 

include 

distribution  percentiles)  surrounds  the  baseline 
debt projection. 

3  -  Long-term  risks  to  fiscal  sustainability 
are medium overall (144).  

The  S2  sustainability  gap 
indicator  (at 
2.9 pps.  of  GDP)  points  to  medium  risk, 
suggesting  that  Austria  would  need  to 
significantly  improve  its  structural  primary 
balance to ensure debt stabilisation over the 
long  term.  This  result  is  mainly  underpinned  by 
the  projected  increase  in  ageing-related  costs 
(contribution  of  2.4  pps.  of  GDP),  while  the  initial 
budgetary  position 
contributes  0.5  pp.  of 
GDP (Table 2).  Developments  in  ageing  costs  over 
the long term are primarily driven by the projected 
increase 
long-term  care  and  health  care 
expenditure (joint contribution of 2.5 pps. of GDP). 
Hence,  while  a  number  of 
investments  and 
reforms  in  the  RRP  contribute  to  supporting  the 
efficiency  of  the  Austrian  health  and  long-term 
care  systems,  additional  measures  may  be 
required to further improve its fiscal sustainability. 
Pension  expenditure  is  not  projected  to  increase 
over  the  long  term,  although  it  is  expected  to 
increase until the mid-2030s. 

in 

The  S1  indicator  also  highlights  some  debt 
vulnerabilities, confirming the assessment of 
overall long-term risks as medium. Indeed, the 
S1  sustainability  gap  indicator  signals  that  a 
consolidation  effort  of  2.1  pps.  of  GDP  would  be 
needed  to  reduce  debt  to  60%  of  GDP  by  2070. 
This  result  is  mainly  driven  by  the  projected 
the  small 
increase 
contribution  from  Austria’s  initial  debt  level  is 
partially  offset  by  its  favourable  initial  budgetary 
position (Table 2).  

in  ageing  costs,  while 

(144) The S2 fiscal sustainability indicator measures the 

permanent SPB adjustment in 2024 that would be required 
to stabilise public debt over the long term. It is 
complemented by the S1 indicator, which measures the 
fiscal gap in 2024 to bring the debt-to-GDP ratio to 60% in 
the long term. For both the S1 and S2 indicators, the risk 
assessment depends on the amount of fiscal consolidation 
needed: ‘high risk’ if the required effort exceeds 6 pps. of 
GDP, ‘medium risk’ if it lies between 2 pps. and 6 pps. of 
GDP, and ‘low risk’ if the effort is negative or below 2 pps. of 
GDP. The overall long-term risk classification brings together 
the risk categories derived from S1 and S2. S1 may notch up 
the risk category derived from S2 when it signals a higher 
risk than S2. See the 2022 Debt Sustainability Monitor for 
further details. 

75 

 
                                                 
Table A21.1: Debt sustainability analysis - Austria 

Source: Commission services. 

Table A21.2: Heat map of fiscal sustainability risks - Austria 

Source: Commission services. 

76 

Table 1. Baseline debt projections20202021202220232024202520262027202820292030203120322033Gross debt ratio (% of GDP)82.982.378.475.472.770.569.067.967.266.967.067.568.369.2Changes in the ratio12.3-0.6-4.0-3.0-2.7-2.1-1.5-1.1-0.7-0.30.10.50.81.0of whichPrimary deficit6.64.72.21.30.10.30.50.70.91.11.21.41.61.7Snowball effect4.3-4.0-6.7-4.4-2.9-2.4-2.0-1.8-1.6-1.4-1.1-0.9-0.8-0.8Stock-flow adjustments1.3-1.30.50.10.10.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)18.616.417.516.014.414.013.813.613.513.513.613.713.914.2S1S2Overall index  (pps. of GDP)2.12.9of which Initial budgetary position-0.10.5Debt requirement0.3Ageing costs2.02.4of which    Pensions0.3-0.1     Health care0.71.0     Long-term care1.01.5Others0.00.0Table 2. Breakdown of the S1 and S2 sustainability gap indicators3040506070809020202021202220232024202520262027202820292030203120322033Graph 1. Deterministic debt projections Historical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioBaseline% of GDPp10p20p40p60p80p903040506070809020202021202220232024202520262027% of GDPGraph 2. Stochastic debt projections 2023-2027MedianBaselineBaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallLOWLOWMEDIUMLOWLOWLOWDebt level (2033), % GDP69.266.881.874.969.8Debt peak year20222022203320222022Fiscal consolidation space88%80%96%88%88%Probability of debt ratio exceeding in 2027 its 2022 level16%Difference between 90th and 10th percentiles (pps. GDP)25.8(1)Debtlevelin2033.Green:below60%ofGDP.Yellow:between60%and90%.Red:above90%.(2)Thedebtpeakyearindicateswhetherdebtisprojectedtoincreaseoveralloverthenextdecade.Green:debtpeaksearly.Yellow:peaktowardsthemiddleoftheprojectionperiod.Red:latepeak.(3)Fiscalconsolidtationspacemeasurestheshareofpastfiscalpositionsinthecountrythatweremorestringentthantheoneassumedinthebaseline.Green:highvalue,i.e.theassumedfiscalpositionisplausiblebyhistoricalstandardsandleavesroomforcorrectivemeasuresifneeded.Yellow:intermediate.Red:low.(4)Probabilityofdebtratioexceedingin2027its2022level.Green:lowprobability.Yellow:intermediate.Red:high(alsoreflectingtheinitialdebtlevel).(5)thedifference 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.Short termMedium term - Debt sustainability analysis (DSA)Long termOverall                               (S0)Overall Deterministic scenariosStochastic projectionsS2S1Overall(S1 + S2)LOWLOWMEDIUMMEDIUMMEDIUM 
 
 
  
 
 
      
 
77