COMMISSION STAFF WORKING DOCUMENT 2026 Country Report - Austria Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Austria
Date: 2026-06-03
Institutions: European Commission, Reform and Investment Task Force
Subjects: Austria, budget policy, economic policy, economic recovery, economic reform, employment policy, investment, macroeconomics, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 3.6.2026  SWD(2026) 220 final  COMMISSION STAFF WORKING DOCUMENT 2026 Country Report - Austria Accompanying the document Recommendation for a COUNCIL RECOMMENDATION  on the economic, social, employment, structural and budgetary policies of Austria {COM(2026) 220 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC DEVELOPMENTS AND KEY POLICY 
CHALLENGES 

manufacturing  decreased  by  almost  9%,  with 
the steepest declines in fabricated metals, and 
machinery  and  equipment.  Energy-intensive 
industries were hit especially hard as industrial 
electricity  prices  almost  doubled  between 
2021  and  2023  and  have  only  declined 
gradually  until  recently.  Moreover,  unit  labour 
costs  increased  by  21%  between  2022  and 
2025  –  6  percentage  points  (pps)  above  the 
EU  average  – 
further  eroding  Austria’s 
competitiveness.  Trade  tensions  and  fierce 
competition from outside the EU further weigh 
on the outlook for the industry.  

growth 

remains 

Potential 
weak, 
hampered by demographic challenges and 
sluggish  productivity  growth.  Austria's 
potential  GDP  growth  is  estimated  at  0.5%  in 
2025 and is expected to recover to about 1% 
by  2028  (1).  In  2025,  the  production  factor 
capital  was  a  modest  driver,  with  investment 
growing, while the factor labour was stagnant 
due  to  population  ageing,  and  total  factor 
productivity  lagged  behind  the  euro  area 
average. 

Inflation  has  persistently  exceeded  euro 
area  levels  over  the  last  three  years. 
Cumulative 
inflation  from  2022  to  2025 
amounted to around 25%, 5.2 pps higher than 
in  the  euro  area.  In  2025,  inflation  ticked  up 
again  after  the  phasing  out  of  energy  relief 
measures.  This  caused  household  electricity 
prices  to  increase  by  roughly  36%  in  2025, 
contributing about 0.75 pps to overall HICP (2) 
inflation.  In  2026,  the  phase-out  no  longer 
affects the inflation rate, and in January 2026, 
inflation  fell to  2%.  However,  the  crisis  in  the 
Middle  East  brings  another  energy  shock.  It  is 
expected to raise inflation in Austria to 3%.     

(1)  European Commission autumn forecast 2025. 

(2)  Harmonised Index of Consumer Prices 

Austria’s economy is recovering 
from a two-year recession amid 
structural challenges  

After  two  years  of  recession,  Austria’s 
economy has begun to recover, but it has 
lost  ground  relative  to  the  EU  average. 
Austrian  GDP  growth,  which  had  been  in  line 
with EU growth since at least 2015, fell behind 
the  EU  average  following  the  energy  crisis 
triggered  by  Russia’s  war  of  aggression 
against  Ukraine  in  2022.  In  2023  and  2024, 
GDP  declined  by  around  1.4%  cumulatively, 
whereas  EU  GDP  grew  by  1.5%  (see  Graph 
1.1).  In  2025,  Austria  embarked  on  a  modest 
recovery  with  GDP  growth  of  0.6%.  The 
conflict  in  the  Middle  East  in  early  2026  and 
the  ensuing  energy  shock  now  threaten  to 
derail it. 

Graph 1.1: Quarterly GDP - Index 

Source: Eurostat - NAMQ_10_GDP 

A key factor behind the recession was the 
downturn  in  manufacturing,  driven  by 
high energy costs and global competition. 
Between 2022 and 2024, gross value added in 

2 

8590951001051101151202015-Q12015-Q42016-Q32017-Q22018-Q12018-Q42019-Q32020-Q22021-Q12021-Q42022-Q32023-Q22024-Q12024-Q42025-Q32015 GDP at 100ATEA20EU27_2020 
 
   
 
Box 1:  UN Sustainable Development Goals (SDGs)  

Austria performs above the EU average on most indicators, and is improving on all but 
three  SDGs.  It  does  well  on  many  productivity-related  indicators  (e.g. the  employment 
rate  in  SDG  8  or  per  capita  patent  applications  in  SDG  9),  while  it  performs  less  well 
compared with the EU average on climate action, such as lowering emissions from land 
use and forestry (SDG 13). 

Out of the 17 indicators, 6 SDGs currently stand below the EU average. These relate to 
partnerships  for  the  goals  (SDG 17),  environmental  sustainability  (SDGs  2  and  13), 
fairness (SDGs 7 and 10) and gender equality (SDG 5) (see Annex 17).  

Real  disposable  income  of  households 
reached an all-time high in 2024. Nominal 
net earnings increased by almost 8% in 2024, 
allowing  households  to  recover  purchasing 
power lost during the energy crisis. Most of the 
extra income was saved, increasing the saving 
rate  by  2.6  pps  to  17.3%  in  2024.  Two 
significant  supply  shocks  hitting  since  2020 
did  not  fundamentally  derail  the  upwards 
trajectory of disposable incomes in Austria.   

Unemployment has increased due to slow 
growth,  but  overall  employment  remains 
steady, notably thanks to women retiring 
later. The unemployment rate rose from 4.8% 
in 2022 to 5.7% in 2025. Employment growth 
largely  driven  by  women,  whose 
was 
employment  rate  rose  by  0.9  pps  from  2023 
to  2025,  offsetting  a  0.1  pps  decline  in 
employment  among  men.  This  trend  is  the 
result  of  the  phased  increase  in  women’s 
statutory  pension  age  starting  in  2024.  Their 
pension age is to be aligned with that of men 
by  2033  (see  Annex  11).  After  declining  for 
two years, labour productivity has stabilised in 
2025. 

Housing challenges emerged due to rising 
construction  costs  and  declining  supply, 
but  simplification  of  technical  standards 
could  improve  affordability.  Construction 
costs  for  new  residential  buildings  increased 
by  30%  between  2020  and  2025,  driven  by 
increasing input costs and tightening financing 
conditions.  The  price-to-income  ratio  in  2025 
is  now  35%  above  its  2010  level.  New 
construction  has  declined  since  2021  with 
building  permits  having  dropped  by  50%, 
reducing  supply.  New  and  fixed-term  rental 
contracts  are  20%  and  31%  more  expensive 

than  average  rents,  whereas  decades-old 
rental  contracts  are  36%  cheaper  (3).  These 
disparities result from a lack of harmonisation 
of  rental  regulations  and  tenant  protection, 
leading  to  significant  challenges  for  new 
entrants  to  the  rental  market,  especially 
vulnerable  groups.  Severe  housing  deprivation 
among  those  with  income  below  60%  of  the 
median  rose  from  6.3%  in  2020  to  14.2%  in 
2023. To tackle construction costs, a review of 
technical  standards  could  help.  Construction 
firms  increasingly  follow  complex  technical 
standards  (known  as  ‘established  commercial 
practice’), which cover requirements for safety, 
noise  protection  and  energy  efficiency,  but 
also  include  comfort  features.  Although  these 
standards  are  not  legally  binding,  deviating 
from them carries legal risks (see Annex 16). A 
targeted  review  and  simplification  of  what 
constitutes  established  commercial  practice 
could help make housing more affordable.  

Austria  faces  dependencies,  particularly 
in  energy,  critical  raw  materials  and 
create 
sovereignty,  which 
digital 
economic  security  challenges.  Dependence 
on  fossil  fuels  imports  has  exposed  the 
economy 
to  volatile  energy  prices  and 
weakened  the  competitiveness  of  energy-
intensive  industries.  Austria  has  phased  out 
coal 
rapidly 
eliminated  direct  imports  of  Russian  pipeline 
gas  after  Gazprom  unilaterally  stopped 
delivery 
Further 
decarbonisation  would  boost  energy  security 
and  strengthen  competitiveness.  As  a  leading 
manufacturing  country  which  is  particularly 
reliant on imported material inputs (see Annex 

in  power  generation  and 

in  November 

2024. 

(3)  https://www.statistik.at/statistiken/bevoelkerung-und-

soziales/wohnen/wohnsituation. 

3 

 
 
 
Box 2: 

Key achievements of the Recovery and Resilience Facility (RRF)  

Austria’s  recovery  and  resilience  plan  (RRP)  represents  a  total  grant  budget  of  EUR 3.96  billion, 
corresponding to  0.84% of GDP. It seeks to support the green and digital transitions, strengthen economic 
resilience and address long-standing challenges identified in the European Semester. 

As  of  1 June 2026,  EUR 3.33  billion  (around  84%  of  the  total  allocation)  has  been  disbursed  following  the 
satisfactory  achievement  of  131  milestones  and  targets.  Substantial  investments,  combined  with  several 
significant  reforms  implemented  to  date,  are  already  driving  lasting  structural  changes  in  the  Austrian 
economy.  

Highlights and impact of the plan 

• 

• 

• 

• 

• 

• 

Eco-social tax reform promotes social inclusion and climate action by introducing a national carbon 
price  on  fossil  fuels,  alongside  EUR 18  billion  in  tax  relief  for  workers  and  businesses,  including 
support for vulnerable households and investment incentives to boost jobs and growth. 
Construction of Koralm railway  provided high-speed infrastructure, cutting travel times between 
Graz and Klagenfurt from  2 hours by car to 40 minutes by train, boosting business attractiveness 
across  both  regions.  This  large-scale  investment  works  in  synergy  with  the  Climate  ticket  reform 
that incentivised public transport use by making it more practical and cost-effective. 
The  Renewable  Heating  Law  reform  banned  fossil  fuel-based  heating  system  in  new  buildings, 
while targeted investment replaced over 31 800 oil and gas heaters in dwellings with renewable 
technology. Together, these measures accelerated the decarbonisation of Austria’s building sector. 
Providing  400  000  digital  devices  to  schools  ensured  pupils  could  develop  essential  digital  skills, 
while the School Digitalisation Act created conditions for teacher training and the digitalisation of 
school infrastructure.   
The education bonus reform incentivised long-term unemployed people to participate in training 
courses,  enabling  at  least  94  000  people  to  benefit  from  investment  in  reskilling  and  upskilling 
measures. 
The  start-up  package  reform  boosted  the  attractivess  of  Austria’s  business  environment  by 
introducing a new legal form for start-ups and innovative businesses, while investment support for 
over 17 000 projects helped small to medium-sized enterprises (SMEs) to digitalise their business 
models.  

Austria also benefits substantially from RRF investments in other Member States. These spillover effects are 
estimated  to  increase  Austria’s  GDP  by  EUR 9.3  billion,  more  than  doubling  the  economic  impact  of  the 
country’s grant allocation. Thanks to its strong manufacturing base, deep integration in the single market and 
good innovation performance, Austria is among the main beneficiaries of RRF spillovers in the EU. 

5),  Austria  is  vulnerable  to  supply  chain 
disruptions. Austria produces some critical raw 
materials  (e.g.  tungsten  (4)),  but  remains 
reliant  on  imports  from  a  limited  number  of 
third  countries  for  others,  especially  rare 
earths.  Reinforcing  circular  economy  practices 
and  strengthening  cooperation  within  the 
Single  Market  and  with  strategic  partners  can 
reduce risks. In the digital field, the authorities 
have  taken  steps  to  reduce  dependencies  on 
non-European 
several 
ministries diversifying their use of software (5). 

providers,  with 

(4)https://rmis.jrc.ec.europa.eu/cp/AT.  

(5)https://www.parlament.gv.at/dokument/XXVIII/AB/637/imf

name_1687988.pdf. 

4 

Austria’s public finances face 
significant pressures  

faces 

significant 

Austria 
fiscal 
challenges,  notably  due  to  spending 
from  demographic  ageing. 
pressures 
Under  its  medium-term  fiscal-structural  plan 
(MTP)  for  2025-2029,  Austria  committed  to 
limiting  net  expenditure  growth  and  aimed  to 
reduce its deficit below 3% of GDP by 2028. It 
sought  to  doing  so  while  keeping  public  debt 
on a plausible  downward path, in line with its 
excessive deficit procedure, which was opened 
simultaneously  in  2025  (see  Annex  2).  This 
trajectory  implies  an  improvement  of  the 
structural  primary  balance  of  2.1  pps  of  GDP 

 
 
 
between 2025 and 2029. Consolidation efforts 
in  2025-2026  only  partially  address  these 
challenges, as Austria faces one of the highest 
age-related  spending pressures  in the  EU  and 
also  intends  to  slightly  increase  its  defence 
expenditure.  Additional  fiscal  consolidation 
measures  and 
structural 
reforms  would  help  meet  the  fiscal  targets 
and boost potential growth. 

comprehensive 

in 

decline 

gradual 

Public  debt  continues  to  rise  despite  the 
estimated 
the 
government deficit. The general government 
deficit declined to 4.2% of GDP in 2025, from 
4.6%  of  GDP  in  2024,  largely  because  of  the 
adoption  of  several  consolidation  measures. 
The  Commission  Spring  2026  Forecast 
projects a deficit of 4.1% of GDP in 2026 and 
2027. Public debt is expected to increase from 
around  81.5%  in  2025  to  84.9%  in  2027, 
mostly  due  to  persistent  fiscal  deficits  and 
subdued GDP growth.  

Graph 1.2: General government budget balance 
and gross debt 

Source: European Commission, Spring Forecast 2026 

Austria’s  fiscal  strategy  focuses  on 
controlling  expenditure  and  preserving 
public  investment.  The  country’s  share  of 
public expenditure is among the highest in the 
EU, at 55.2% of GDP in 2024 and projected to 
decrease to 55.0% of GDP in 2027. To contain 
public 
took 
measures  such  as  abolishing  the  ‘climate 
bonus’  (a  lump-sum  compensation  for  CO2 
state-financed 
pricing), 
the  spending 
educational 
climate 
ceiling 
subsidies 
to  firms  and  households,  and 
increasing  health  insurance  contributions  for 

suspending 
leave, 
for  ministries, 

the  government 

spending, 

reducing 

lowering 

the 

pensioners.  Public  investment  is  projected  to 
rise  from  3.1%  in  2019  to  4.1%  of  GDP  in 
2027.  For instance,  about  EUR  5.5  billion (1% 
of  GDP)  was  earmarked  for  a  new  pact  for 
research,  technology  and  innovation  (2027-
2029) (see Annex 2). 

Defence spending in Austria is limited but 
is expected to increase slightly. In order to 
facilitate 
increasing  public  spending  on 
defence,  the  Council  of  the  European  Union 
has activated the national escape clause (NEC) 
for  defence  for  Austria  (6).  Total  government 
expenditure  on  defence  amounted  to  0.7%  of 
GDP in 2025 and is forecast  by the European 
Commission  to  be  0.9%  of  GDP  in  2026  and 
1.0%  in  2027  (see  Annex  2).  Under  the 
Austrian  armed  forces  development  plan 
‘2032+’,  defence  spending  would  increase  to 
1.8% (7) of GDP by 2032 (see Annex 2) (8).  

Making the tax mix more growth-
friendly and improving the 
efficiency of public spending 

There is scope to make the tax mix more 
growth-friendly  by  shifting  the 
tax 
burden  away  from  labour  and  social 
contributions. Austria’s labour tax  wedge (9), 
especially  at lower  wage  levels,  remains  high, 
discouraging  job  creation  and  labour  market 
participation  (see  Section  4).  In  2025,  Austria 
received  a  country-specific  recommendation 
(CSR)  to  improve  the  tax  mix  to  reduce  the 
labour  and  support 
high  tax  wedge  on 

(6)  The  activation  of  the  national  escape  clause  provides 
Member  States  with  budgetary  flexibility  to  increase 
defence  expenditure,  without  an  immediate  need  to 
finance  this  increase  with  spending  cuts  or  revenue-
raising  measures.  The  flexibility  thus  gives  Member 
States  the  necessary  time  to  accommodate  higher 
defence expenditure within national budgets. 

(7)  This translates to 2% of GDP including pensions for 
former military personnel, which counts as social 
protection expenditure.  

(8)  Landesverteidigungsbericht 2024/2025. 

(9)  The labour tax wedge is the difference between total 

labour costs and take-home pay. 
https://iate.europa.eu/entry/result/884650/en  

5 

60708090-10-8-6-4-20218192021222324252627% of GDPGross debt (rhs)Budget balance (lhs)forecast% of GDP 
   
 
in  a 
inclusive  and  sustainable  growth 
challenging fiscal environment. In recent years, 
Austria  has  started  to  diversify  its  revenue 
sources.  It  has  done  so,  including  by  (i) 
introducing a national CO2 price for fossil fuels 
in  sectors  not  covered  by  the  EU  emissions 
trading  system  (ETS);  (ii)  raising  tax  rates  for 
gambling,  tobacco  and  private  foundations; 
and (iii) tightening the tax rules for share deals 
involving  real  estate-owning  companies.  In 
addition,  the  2023  reform  to  partly  eliminate 
“bracket  creep”  has  mitigated  inflation-driven 
increases  in  the  labour  tax  wedge.  However, 
taxes 
social 
contributions  remain  high,  and  there  is  scope 
to  make  better  use  of  less  distortive  revenue 
sources. For instance, recurrent property taxes 
are  comparatively  low,  and  Austria  is  one  of 
the few Member States without an inheritance 
tax. 

income 

labour 

and 

on 

challenges 
schemes 

The  pension  system  faces  significant 
sustainability 
and 
remain 
supplementary 
underdeveloped.  Austria  has 
the  EU’s 
second-highest  share  of  public  pension 
expenditure, at 14.5% of GDP in 2025 (10). This 
partly  reflects  its  low  effective  retirement 
ages  (62.4  for  men,  60.4  for  women  in 
2024 (11),  in  spite  of  measures  taken  to 
prolong  working  lives  (see  Section  4).  Federal 
transfers to the pension system are significant 
and  expected  to  reach  4.2%  of  GDP  by  2030 
(12)). 
(7.3%  when 
Austria received a CSR in 2025 to improve the 
fiscal sustainability of the pension system and 
to 
effective 
increase 
retirement  age.  From  2026,  stricter  eligibility 
rules for the ‘corridor pension’ early retirement 
scheme  are  expected  to  raise  the  effective 
retirement age somewhat. However, early and 
statutory 
remain 
retirement  ages  would 
relatively low over the next decades compared 
with  other  Member  States,  limiting  the  extent 
to  which  effective  retirement  ages  can  rise 
further.  Supplementary  pensions  only  play  a 
minor  role  in  the  provision  of  retirement 

including  civil  servants 

significantly 

the 

(10)  European Commission (2024): Ageing Report 2024, 

Institutional Paper, day month. 

(11)  Statistics Austria 2025. 

(12)  Alterssicherungskommission 2025. 

income,  with  low  coverage,  notably  in  the 
absence  of  auto-enrolment,  and 
limited 
financial  depth. They rely mostly on voluntary 
occupational  schemes  and  individual  savings 
(see Annexes 2 and 6). 

by, 

and 

other 

healthcare 

coordination 

The  healthcare  system  suffers  from 
fragmentation  and  inefficiencies,  with 
cost-
limited 
effectiveness.  Austria  received  a  CSR  in 
2025  to  improve  the  fiscal  sustainability  of 
healthcare, 
things, 
among 
streamlining  hospital  infrastructure, improving 
cost-effectiveness 
and 
of 
strengthening  expenditure  control.  Austria 
increased  the  health  insurance  contribution 
rate of pensioners, but this is only expected to 
provide temporary relief to health insurance to 
mitigate  its  growing  deficit.  Budgetary  control 
and governance continue to be undermined by 
a  poor  adherence  to  agreed  expenditure 
targets and performance benchmarks. Despite 
low  hospital  bed  occupancy  rates,  spending 
remains  skewed  towards  in-patient  hospital 
care,  with  health  insurance  funds  required  to 
pay a fixed budget to hospitals (see Annex 15). 
Although  valuable  measures  were  introduced 
thanks to the recovery and resilience plan and 
a new healthcare reform fund was established 
in  2026,  efficiency  gains  from  investments  in 
primary  care  and  digitalisation  have  been 
limited  due  to  insufficient  regulatory  support, 
e.g.  a  lack  of  patient  steering  or  limited 
usability  of  electronic  health  records. 
In 
addition,  the  uptake  of  generic  medicines 
remains relatively low, and the system has not 
tapped  into  the  full  potential  of  involving 
various  non-physician  health  professionals  in 
patient  management  (see  Annex  2).  Overall, 
cost-effectiveness  remains  a  concern.  Despite 
high  spending  on  prevention,  Austria  records 
among 
levels  of  alcohol 
consumption  and  smoking  in  the  EU  and  a 
higher rate of preventable mortality than most 
comparable peers. 

the  highest 

The  long-term  care  system  could  be 
improved  through  better  governance  and 
integrated  care.  Austria  received  a  CSR  in 
2025  to  improve  the  fiscal  sustainability  of 
long-term  care,  including  by  improving  its 
cost-effectiveness 
strengthening 
expenditure  control.  Financial  sustainability 

and 

6 

 
 
Box 3: 

Contribution of cohesion policy funds 

EU  cohesion  policy  funding 
is  supporting  Austria’s  efforts  to  boost 
competitiveness,  environmental  sustainability,  as  well  as  skills  and  social 
fairness.  In  the  2021-2027  programming  period,  EU  cohesion  policy  funds  (13)  are 
providing  EUR  1.07  billion  (amounting  to  EUR  2.7  billion  paired  with  national  co-
financing) to Austria. The value of selected projects corresponded to 65.3% of the total 
allocation as of March 2026, with additional calls for projects in the pipeline. 

• 

Innovation,  business  environment  and  productivity.  More  than 
innovation,  SMEs’ 
is  allocated  for  research  and 
EUR 443  million 
competitiveness and for the regions most affected by the transition away 
from  carbon-intensive  activities.  Around  248  firms  have  already  seen 
their projects approved.  

•  Decarbonisation,  energy  affordability  and  sustainability.  More  than 
EUR 295  million  is  dedicated  to  clean  transition  projects  and  for  the  regions 
most affected by the transition away from carbon-intensive activities, including 
nearly EUR 25 million to circular economy investments in SMEs. EUR 100 million 
supports energy efficiency interventions. 

•  Skills,  quality  jobs  and  social  fairness.  EUR 232 million  is  allocated  to 
supporting  lifelong  learning,  reskilling  and  upskilling  and  to  helping  workers  to 
adapt  to  change,  while  EUR 120 million  is  earmarked  for  fighting  poverty, 
including material deprivation and supporting active inclusion. In addition, social 
innovation and equality are strengthened and around a third (30%) of European 
Social Fund Plus (ESF+) funding is dedicated to youth employment policies and 
more than a fifth (21%) to combating child poverty. 

In  addition  to  cohesion  policy  funding,  Austria  will  be  allocated  up  to  EUR 579 million 
under the Social Climate Fund over 2026-2032 to help mitigate the social impact of the 
new  emissions  trading  system  (ETS2),  supporting  vulnerable  households,  vulnerable 
transport users and small businesses. 

and  quality  of  services  are  lacking  binding 
expenditure  targets  and  stronger  integration 
with  healthcare  services,  to  reduce  cost-
shifting  between  the  sectors.  Despite  the 
principle  of  ‘outpatient  care  before  inpatient 
care’, the relatively high share of spending on 
residential  care  suggests  that  there  is  scope 
for  efficiency  gains.  A  spending  review  could 
identify  opportunities  to  align  care  settings 
with  dependency  needs  (see  Annex  2).  At  the 
same  time,  significant  regional  disparities  in 
service  provision  and  co-payments  point  to 
uneven  quality  and  adequacy  of  care  (see 
Annex 12). 

(13) European Regional Development Fund (ERDF), European 
Social  Fund  Plus  (ESF+),  Cohesion  Fund  (CF)  and  Just 
Transition Fund (JTF). 

7 

layers 

across 

responsibilities 

The  coverage  and  binding  nature  of  the 
medium-term budgetary framework could 
be  strengthened  to  sustain  fiscal  efforts 
over time. Austria received a CSR in 2025 to 
simplify  and  rationalise  fiscal  relationships 
of 
and 
government  and  to  ensure  financing  and 
spending responsibilities are clearly aligned. A 
positive  development  is  the  agreement  on  a 
new Austrian stability pact in November 2025, 
which sets debt and deficit targets for federal, 
regional 
and 
strengthens  reporting  requirements  at  the 
regional  level.  However,  the  pact  does  not 
include  dedicated  targets  for  social  security 
funds  that  contribute  to  the  deficit  of  the 
federal  level  and  faces  limitations  due  to 
possible  inconsistencies  between  the  sub-
national  deficit  targets  and  net  expenditure 
ceilings  used  at  national  level.  At  the  same 

governments 

local 

and 

 
 
 
 
time,  the  medium-term  budgetary  framework 
is usually revised annually with a new budget, 
thus weakening the credibility of its targets. 

through  open  calls  under  Horizon  Europe  and 
the Connecting Europe Facility. 

is 

complex 

government 

Coordination  across  and  between  levels 
of 
and 
contributes  to  capacity  constraints  and 
fiscal  challenges.  Sub-national  entities  play 
a  crucial  role  in  delivering  public  services,  but 
they have limited tax autonomy and contribute 
significantly  to  the  public  deficit.  Out  of  the 
2 092  municipalities  –  more  than  half  of 
which  have  fewer  than  2  000  inhabitants  – 
many  lack  the  administrative  and  financial 
capacity  to  deliver  public  services  efficiently, 
maintain infrastructure and promote economic 
development.  Moreover,  existing  cooperation 
between  municipalities  remains  patchy  and 
inconsistent.  A  first  step  for  more  effective 
inter-municipal  cooperation  could  be  linking 
into  an 
current  municipal  data 
interoperable 
platform. 
Moreover,  incentivising  multi-purpose  service 
the 
(‘Mehrzweckverband’) 
platforms 
functional level could help improve economies 
of  scale,  service  quality  and  cost  control  (see 
Annex 7). 

exchange 

islands 

data 

at 

funding 

instruments 

competitiveness, 

EU 
provide 
considerable  resources  to  Austria.  They 
support investments and structural reforms to 
environmental 
increase 
sustainability,  skills,  social 
fairness  and 
security,  while  helping  to  address  challenges 
identified in the CSRs. Key instruments include 
the  Recovery  and  Resilience  Facility  (see  Box 
2)  and  Cohesion  policy  funds  (see  Box  3).  In 
addition, the Common Agricultural Policy (CAP) 
provides  Austria  with  an  EU  contribution  of 
EUR 6.1 billion under the CAP strategic plan for 
2023-2027  (14).  A  further  EUR  335.9  million 
are available under the Asylum, Migration and 
Integration  Fund  (AMIF),  together  with  the 
Instrument 
Border  Management  and  Visa 
(BMVI)  and  the  Internal  Security  Fund  (ISF). 
Other 
support 
instance 
competitiveness 

programmes 

in  Austria, 

also 
for 

EU 

(14)  An overview of Austria’s formally approved strategy to 

implement the EU’s common agricultural policy 
nationally can be found at 
https://agriculture.ec.europa.eu/cap-my-country/cap-
strategic-plans/austria_en.  

8 

 
 
 
INNOVATION, BUSINESS ENVIRONMENT AND 
PRODUCTIVITY 

the  European  Innovation  Scoreboard  (16).  It 
trails behind innovation leaders, in particular in 
digitalisation, cloud adoption and SME product 
innovation.  Furthermore,  key 
indicators  of 
scientific  excellence  have  slightly  deteriorated 
over  time:  Austria’s  share  of  publications 
within 
top  10%  most-cited 
scientific  publications  has  been  on  a 
(17),  though 
downward  trend  since  2017 
Austria  remains  seventh  globally  in  the  per 
capita Nature Index (18). 

the  world’s 

Graph 2.1: Austria underperforms in patent 
applications despite a top R&D spender 

(CSRs) 

reducing 

regulatory 

country-specific 
2025 
The 
recommendations 
for  Austria 
focused on translating high R&D spending 
into 
innovation  outputs,  accelerating 
advanced  digital  adoption  by  firms, 
promoting  start-up  creation  and  scaling, 
and 
and 
administrative  burdens.  Some  of  these 
challenges  were  addressed  by 
targeted 
measures.  These  included  (i)  updating  the 
research tax credit rules; (ii) adopting the new 
RTI  pact  (iii)  launching  the  industrial  strategy 
fully 
2035  with  dedicated  funding; 
digitising 
via 
business 
GISAExpress; 
the  Flexible 
(v)  adopting 
Kapitalgesellschaft flexible company form; (vi) 
rolling  out  the  package  for  small  to  medium-
sized  enterprises  (SMEs)  (Mittelstandspaket); 
and 
presenting  an  administrative 
simplification  package  with  113  concrete 
measures.  However,  significant  challenges 
related 
business 
environment persist. 

(iv) 
registration 

innovation 

and 

(vii) 

to 

High spending yields uneven 
innovation performance 

Austria’s  high  R&D  expenditure  fails  to 
innovation 
deliver  proportionally  high 
outputs.  Austria  received  a  CSR  in  2025  to 
improve  the  translation  of  the  high  levels  of 
R&D  investment  into  marketable  solutions. 
Austria  ranks  among  the  EU’s  top  R&D 
spenders (3.3% of GDP in 2024 – third highest 
in the EU and well above the 2.2% EU average; 
(15),  yet 
innovation  outputs  underperform 
relative  to  investment.  Austria  ranks  eighth  in 

Source: Eurostat, European Patent Office 

technology 
(research  and 
The  RTI 
infrastructures)  strategy  2030  guides 
Austria’s  research  and  innovation  policy; 
its mid-term evaluation reveals that half 
of  its  20  numerically  trackable  targets 
for 2030 will be met at the current pace 
(19).  In  the  new  three-year  RTI  pact  adopted 
this  year,  R&D  funding  will  rise  somewhat 

(16)  2025 European Innovation Scoreboard, country profile 

Austria, Ec.europa.eu. 

(17)  European Commission, Science-Metrix data using the 

Scopus database. 

(18)  Nature Index 2025, nature.com; Eurostat, 2026, 

Ec.europa.eu.  

(15)  Eurostat, 2026, GERD by sector of performance, 

(19)  Austrian Institute of Economic Research (WIFO) and 

Ec.europa.eu. 

Austrian Institute of Technology (AIT), 2025. 

9 

0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%050100150200250300350400450500SEBEATFIDEDKNL% of GDP spent on R&D (left column)Applications for patents per capita (right column) 
 
 
  
 
there 

collaboration 

remains  scope 

from EUR 5.05 billion (2024-2026) to EUR 5.5 
billion  (2027-2029)  (20).  This  will  help  to 
achieve  the  4%  of  GDP  R&D  intensity  target 
by  2030.  However,  efficiency  gaps  persist. 
is  well 
Science-business 
developed,  but 
to 
strengthen  the  translation  of  research  results 
into breakthrough innovations and marketable 
solutions.  To  foster  competitiveness,  in  2026 
Austria  adopted  the  new  industrial  strategy 
2035, prioritising nine key tech areas (21), with 
EUR 2.6  billion  of  funding  for  2026-2029. 
However,  its  implementation  would  benefit 
from  robust  coordination  of  competencies 
across  ministries 
impact-oriented 
monitoring (22) (see Annex 4). 

and 

areas.  As  regards  connectivity,  Austria  has 
almost complete 5G coverage but lags in fixed 
very high-capacity networks (VHCN) and fibre-
to-the-premises 
in 
(FTTP) 
particular  in  rural  areas  (see  Annexes  5  and 
19).  Sustained 
investment  and  regulatory 
streamlining  (notably,  of  spatial  planning  and 
permitting)  are  needed  to  address  these  gaps 
and improve deployment efficiency. 

connections, 

Funding gaps and regulatory 
hurdles dampen start-up scaling 
and productivity growth 

Firms lag in the adoption of some 
advanced digital technologies and 
broadband gaps persist 

(advanced) 

intelligence 

technologies 

Austria  performs  well 
in  basic  SME 
digitalisation  and  artificial  intelligence 
but trails in other advanced digital tools. 
The 2025 CSR urged Austria to step up the use 
of 
by 
digital 
companies.  Austria  already  performs  well  in 
basic  SME  digital  intensity  and  the  uptake  of 
(AI)  by  companies. 
artificial 
However,  the  adoption  of  other  advanced 
digital  technologies,  such  as  cloud  computing 
and data analytics, continues to lag behind the 
EU  average.  This  adoption  is  hampered  by 
limited targeted funding and uneven diffusion 
of  data-driven  technologies  across  firms  (see 
Annex  4).  Existing  support  measures,  notably 
the 
the  SME.DIGITAL 
European Digital  Innovation Hubs, have yet to 
close this gap.   

programme  and 

Fixed  broadband  infrastructure  remains 
underdeveloped,  in  particular  in  rural 

(20)  Bundeskanzleramt, 2026, Bundeskanzleramt.gv.at. 

(21)  AI and data, chips, robotics, quantum, advanced 
materials, biotech, green energy, mobility and 
aerospace. 

(22)  Austrian Productivity Board, 2026,  Industriestrategie 

Austria’s business dynamic is constrained 
by  low  start-up  scaling.  Austria  received  a 
CSR  in  2025  to  promote  business  dynamism, 
and  the  creation  and  growth  of  young 
companies.  With 
industry  accounting  for 
around  19%  of  total  value  added  in  2024, 
Austria  is  vulnerable  to  structural  shifts  and 
export market competition. Labour productivity 
declined  in  2023-2024  amid  under-utilised 
capacities, 
in  manufacturing, 
construction,  and  some  service  sectors  (23). 
Both the business creation and exit rates, and 
the  share  of  high-growth  companies  remain 
below  the  EU  average  (2023).  Moreover, 
fallen 
business 
significantly in services – the largest sector of 
the  economy  (24).  This  signals  inefficiencies in 
resource allocation towards higher productivity 
activities. 

in  particular 

creation 

rates 

have 

growth 

creation  and 

Austria introduced measures to facilitate 
business 
of 
innovative  companies. As  of  January  2026, 
business  registration  has  been  fully  digitised 
through 
the  Austrian  Business  Licence 
Information  System  (GISAExpress),  making  it 
possible to bypass manual review and to issue 
the  business  licence  instantly.  The  ‘Flexible 
Kapitalgesellschaft’,  a  new  flexible  company 
form  launched  in  2024,  has  supported  the 
growth  of  start-ups  by  simplifying  the  share 

(23)  Austrian Productivity Board, 2025, Productivity report 

2025, Produktivitaetsrat.at. 

Österreich 2035 - Kurzanalyse. 

(24)  OECD Economic Surveys: Austria 2026. 

10 

 
 
 
issuance process, ownership structure and the 
corporate  tax  system.  With  around  1  700 
registrations  as  of  mid-2026,  the  authorities 
project  that  7 500  of  such  flexible  companies 
will be active by 2029 (see Annex 5). In 2025, 
Austria 
package 
adopted 
(‘Mittelstandspaket’)  consisting  of  smaller 
measures  incentivising  business  investment 
and  reducing  the  financial  and  administrative 
burden for SMEs (see Annex 5). 

also 

a 

lack  of 

The  venture  capital  and  equity  markets 
are  not  sufficiently  developed,  limiting 
financing  for  innovative  firms.  The  2025 
CSR  highlighted  the  need  for  better  access  to 
venture  and  growth  capital.  The  number  of 
start-ups in Austria remains high, supported by 
a favourable environment and various support 
schemes,  but 
later-stage  funding 
hinders scaling. Moreover, start-up ecosystems 
are  concentrated  in  Vienna,  not  fully  tapping 
the innovation potential of Austria’s regions. In 
2025, start-up funding dropped by 56% to the 
lowest  level  since  2019,  with  venture  capital 
investments  declining  from  0.08%  of  GDP  in 
2021-2023  to  0.03%  in  2022-2024,  well 
below the EU average of 0.06% (see Annex 6). 
Austria’s pension funds accounted for only 1% 
of 
in  2007–2023, 
raised 
significantly  trailing  behind  the  15%  EU 
(25).  The  capital  market 
average 
is  also 
relatively  small  (28%  of  GDP  at  the  end  of 
2024 vs 67% in the EU). To improve access to 
early-stage  financing,  in  2023,  the  Austrian 
Business  Service  (AWS)  launched  the  venture 
capital  fund  ‘Gründungsfonds  II’,  with  funding 
of  EUR 72  million.  In  2025,  the  government 
announced a new start-up and scale-up fund-
of-funds  (26),  set  to  launch  by  early  2027, 
aimed at mobilising EUR 500 million, including 
up to EUR 100 million in public capital. 

capital 

risk 

Strengthening the supplementary pension 
pillar  could  unlock  long-term  capital.  The 
2025  CSR  urged  Austria  to  remove  barriers 
hindering investment by institutional investors 
in  equity  instruments.  Despite  demographic 
challenges,  participation  in  occupational  and 

(25)  2024, CEPS, Closing the gaping hole in the capital 

market for EU start-ups – the role of pension funds. 

rights 

private  pensions  remains  low,  with  pension 
fund assets amounting to only 7.2% of GDP in 
2024  (vs  32.3%  in  the  EU)  (see  also  Section 
1).  Strict  capital  guarantee  requirements  and 
limit  equity  exposure, 
withdrawal 
contributing  to  the  very  low  10-year  average 
real  return  on  assets  (-0.1%  vs  1.4%  in  the 
EU)  managed  by  Austrian  pension  funds.  In 
December 2025, the government announced a 
reform of the second pension pillar to expand 
access  (27),  enhance  transparency  and  allow 
higher  equity  allocations  in  early  investment 
phases (28). Swift and rigorous implementation 
is  essential  to  improve  the  functioning  of  the 
second  pension  pillar  and  to  deepen  Austria's 
equity market. 

Complex regulations and slow 
permitting raise business costs 
and hinder competition  

permitting 

procedures 

Administrative  and  regulatory  burden 
weigh  on  the  business  environment  (see 
also Graph 2.1). For this reason, the CSR from 
2025  recommends  simplifying  regulation  and 
reducing  administrative  burden  as  well  as 
accelerating 
and 
strengthening  competition  to  lower  prices. 
More  firms  in  Austria  than  the  EU  average 
consider  regulations  to  be  an  obstacle  to 
investment  (29),  requiring  them  to  commit 
significant  resources  to  bureaucratic  tasks. 
Moreover,  permitting  procedures  are  still 
complicated 
things, 
heterogeneity  of  requirements  across  the 
federal states.  

among 

other 

by, 

Planned  simplification  measures  could 
ease  the  administrative  and  regulatory 
burden  if  implemented  effectively.  The 
package 
administrative 
(‘Entbürokratisierungspaket’) 
in 
December  2025  proposes  113  measures  to 

simplification 

presented 

(27)  Currently covering around 25% of active workforce.  

(28)  https://www.bundeskanzleramt.gv.at/dam/jcr:9a1faeb7-
b693-4400-ac3b-52a053d1464e/35_28_mrv.pdf.  

(29)  European Investment Bank, 2026: EIB Investment 

(26)  Rot-Weiß-Rot Dachfonds. 

Survey 2025. 

11 

 
 
 
reduce  regulatory  and  administrative  burden 
for  companies,  individuals  and  the  public 
sector  (see  Annex  5).  (30)  The 
industrial 
strategy  2035  also  targets  the  reduction  of 
instance  by 
administrative  burden, 
digitalisation  and  one-stop-shop  procedures 
(31),  but  execution  details  are  missing.  In 
addition, a proposed reform of the Trade Code 
paper 
aims 
documentation, 
for 
reducing 
thousands  of  site  inspections  every  year  (32) 
(see Annex 5). 

on-site 
the  need 

eliminate 

for 

to 

Graph 2.2: Administrative and regulatory 
burden 

Source: Source: OECD, Product Market Regulation (PMR) 
indicators, 2024(33)  

in  services  trade  and 
Restrictiveness 
regulatory barriers in specific professions 
persist. The regulation of professions, e.g. via 
the  Trade  Code  or  via  professional  chambers, 
aims 
to  ensure  quality  standards  and 
consumer  protection.  However,  it  also  limits 
competition  and  creates  additional  costs  for 
businesses.  Foreign  professionals  may  be 
required to pass a local examination to obtain 
a licence to practice, creating impediments for 
trade  in  services  in  the  single  market.  Civil 
engineering  professions  stand  out  as  being 
heavily regulated in a recent OECD comparison 
(34)(35).  Labour  market 
tests  for  non-EU 

(30)  Federal Ministry of European and International Affairs, 

2025, Entbürokratisierungspaket, bmwet.gv.at. 

(31)  Industriestrategie Österreich 2035, bmwet.gv.at. 

requirements 

professionals  are  frequently  applied  even  in 
intra-corporate  mobility.  Easing 
cases  of 
administrative 
the 
implementation  of  posting  of  workers  rules 
could  reduce  regulatory  fragmentation  within 
the  single  market,  facilitate  cross-border 
mobility  and  foster  competitiveness,  without 
undermining  workers’  protections  (see  Annex 
5). 

in 

(notably 

limited 
High  consumer  prices  reflect 
competition 
supply 
territorial 
and 
constraints. Identically  branded  products are 
often  more  expensive  in  Austria  than  in 
neighbouring  Member  States 
in 
Germany) even if corrected for factors such as 
tax  rates (36).  Market entry in retail is difficult 
due 
stringent 
establishment  rules  (37).  The  food  sector  is 
dominated by four large players (91% market 
share),  limiting  competition.  Austria’s  food 
prices  are  the  fifth  highest  in  the  EU  (38).  In 
general,  Austria  lags  behind  on  timely  and 
correct  transposition  of  EU  directives  (see 
Annex  5),  further  fragmenting  the  single 
market.  

oversaturation 

and 

to 

A proposed reform of the Trade Code has 
the  potential  to  complete  the  one-stop-
shop  and  accelerate  business  permitting. 
The  reform  would  enable  businesses  to  apply 
for  building  permits  via  the  same  one-stop-
shop  used  for  business  installation  permits. 
Moreover,  attachments  to  submissions  would 
generally  be  accepted  also  in  English.  If  fully 
implemented – requiring effective cooperation 
across  the  local,  Länder  and  federal  levels  – 
this  measure  could  reduce  permitting  delays 
and ease administrative burden.  

(35)  This relates, among others, to local examination 
requirements and mandatory membership in the 
professional chamber to be allowed to practice under 
the professional title of a civil engineer, shared 
exclusive rights to provide activities, and restrictions on 
ownership and voting rights for non-licensed 
professionals. 

(32)  Austrian Parliament, 2025, parliament.gv.at. 

(36)  Austrian Federal Competition Authority, Inquiry into the 

(33)  The indicator is based on survey information about 
requirements for setting up new enterprises and 
accessibility of information about national regulations. 
A lower score indicates a lower burden. 

(34)  OECD PMR indicators, 2025, Austria note.pdf. 

food sector, Final report 2023.  

(37)  European Commission, 2022, Retail restrictiveness 

indicator (2022 update). 

(38) Eurostat, 2024: Comparative price levels for food, 

beverages and tobacco - Statistics Explained. 

12 

 - 0.5 1.0 1.5 2.0 2.5 3.0ELDKSEEEFIFREUDEATCHE 
     
 
 
 
DECARBONISATION, ENERGY AFFORDABILITY AND 
SUSTAINABILITY 

in 
Austria  has  made  some  progress 
addressing 
its  2025  country-specific 
recommendations (CSRs) on energy costs, 
fossil-fuel  dependency  and  emissions 
reductions,  but  significant  challenges 
persist  across  all  policy  areas.  The  2025 
CSRs  called  for  tackling  high  energy  costs, 
reducing  fossil-fuel  dependency,  accelerating 
renewable deployment and infrastructure, and 
cutting  emissions  in  transport  and  industry 
through  electrification  and  efficiency  gains. 
While measures to lower energy prices, expand 
renewables  and  decarbonise  transport  and 
industry  have  been 
further 
acceleration,  stronger  incentives  and  more 
coherent  implementation  are  needed  to  meet 
climate and energy targets. 

introduced, 

Sustaining efforts for lower 
energy prices and for a resilient 
and flexible energy system  

but 

prices, 

energy 

to  achieving 

Austria  took  several  measures  to  tackle 
high 
full 
implementation of the Electricity Act will 
be  key 
lasting  price 
reductions.  Given  the  above-average  energy 
prices,  Austria  received  a  CSR  in  2025  to 
tackle  high  energy  costs  including  through  a 
reform of the Electricity Act, by improving the 
flexibility  of 
system  and 
the  energy 
incentivising  power  purchase  agreements. 
(PPAs).  The  Electricity  Act,  which  was  adopted 
end of  2025, represents a  structural  overhaul 
of the electricity market, and aims to improve 
system flexibility, grid efficiency, digitalisation, 
renewable  integration,  PPAs  and  consumer 
rights, including transparency, dynamic pricing 
and  affordability  through  a  social  tariff  for 
vulnerable  households.  Austria  also  adopted 
several  short-term  relief  measures  (such  as 
reducing the electricity levy and introducing an 

announces 

strategy  2035 

electricity  price  compensation  scheme  for 
energy-intensive  companies  for  2025-2026 
which have lowered household retail prices by 
9%  in  February  2026  (see  also  Annex  9).  The 
a 
industry 
prolongation of the energy-price compensation 
measure for energy-intensive industries, plus a 
special  industry  electricity  price  as  of  2027 
following  the  example  of  Germany.  However, 
full  and 
the 
Electricity  Act  is  key  to  achieving  sustainably 
and 
Austria 
lower 
introduced  a  time-limited  “fuel  price  break” 
consisting of a reduction of mineral oil tax and 
a  cap  on  fuel  price  margin  to  protect 
consumers  from  rising  energy  costs  because 
of the Middle East conflict. 

implementation  of 

structurally 

prices. 

timely 

particularly 

infrastructure, 

Clean  energy  is  generally  well  advanced, 
but  wind  energy  deployment  lags  behind. 
Austria  received  a  CSR  in  2025  to  accelerate 
the  roll-out  of  renewable  energy  and  the 
required 
by 
simplifying  permitting  procedures  and  putting 
in  place  dedicated  acceleration  areas.  Austria 
set  itself  the  target  of  100%  renewable 
electricity supply (national balance) by 2030 in 
its Renewables Expansion Act, a key reform in 
the  recovery  and  resilience  plan.  Renewable 
energy  accounted  for  83.9%  of  electricity 
generation in 2025, with a high share of hydro 
power.  Wind  expansion  is  slow,  with  only 
0.2 GW  added  in  2025  (+2%  vs  2024),  which 
is  far  below  the  1.4  GW  onshore  target  for 
2024–2026  under  the  EU  wind  power  action 
plan (see Annex 9). Regional disparities persist, 
as  wind  energy  is  concentrated  in  the  east, 
while  provinces 
the  west  have  no 
installations.  Given  the  seasonal  variability  of 
hydropower  and  photovoltaics,  wind  energy  is 
a  cost-efficient  complement  to  reduce  the 
need  for  electricity 
in 
winter. Reliance on electricity imports in winter 
due  to  lower  seasonal  generation  and  high 
demand  drives  up  prices  as  gas  fired  plants 
maintain their structural role as the dominant, 

imports,  especially 

in 

13 

 
 
and  costly,  marginal  price-setting  technology 
(35%  of  price-setting  hours  over  the  year  for 
only a 13% share of electricity generation).  

by 

the  Austrian 

Accelerating  renewables  permitting  – 
particularly for wind  – is crucial to meet 
Austria’s clean energy targets and reduce 
fossil-fuel  dependency,  but  delays  in  the 
Renewables  Acceleration  Act  hamper 
progress.  Austria  received  a  CSR  in  2025  to 
simplify permitting  for  renewables.  In  autumn 
2025, Austria held a public consultation on the 
draft  Renewables  Acceleration  Act,  which  will 
i.a.  transpose  the  Renewable  Energy  Directive 
(RED  III).  However,  the  Act  is  still  awaiting 
Parliament, 
adoption 
complicated  by  provincial  competencies  over 
spatial planning and zoning. Burgenland is the 
only  federal  state  so  far  that  has  provided 
comprehensive  mapping  and  go-to  areas  for 
wind  energy.  It  will  be  important  for  the 
potential  of  acceleration  areas  to  match  the 
targets laid down in the Renewables Expansion 
Act  and  the  national  energy  and  climate  plan 
(NECP).  For  regulatory  measures  to  develop 
their full potential, sufficient staff and experts, 
including  in  the  courts,  are  needed.  There  is 
also scope to increase the local acceptance of 
wind  power  through  financial  incentives  for 
communities and municipalities. 

implementation  of 

flexibility,  upgrading 

the 
Promoting 
electricity  grid  and  increasing  storage 
remain  key  to  driving  the  clean  energy 
transition.  Fast 
the 
Electricity  Act  will  be  necessary  to  unlock  its 
full potential for improving grid efficiency and 
system flexibility. There is potential to increase 
storage capacity, including batteries, but while 
there  are  several  projects  for  extending 
storage  capacity  (see  Annex  9),  they  are 
hampered  by  the  generally  long  permitting 
times  for  energy  infrastructure  projects.  In 
addition,  high  infrastructure  costs  –  projected 
at  EUR 53  billion 
transmission  and 
for 
distribution  grids  by  2040  –  remain  a  major 
challenge.  The  government’s  grid  operator 
support programme (via state guarantees) is a 
step 
grid 
infrastructure fund (39) or the dedicated use of 

dedicated 

forward, 

but 

a 

emissions trading system (ETS) revenues could 
improve  financing  for  investments  in  energy 
infrastructure. ETS revenues amounting to EUR 
1.7 billion for the period 2021-2025 have not 
been used for decarbonisation investments(40). 
Austria’s  electricity 
is  at 
interconnection 
24.3%,  but 
interconnectivity  varies  across 
borders. Especially on the borders with south-
east Europe, congestion seems more frequent, 
leading  to  high  price  disparities  during  peak 
times 
in  summer.  Maximising  cross-zonal 
electricity  trading  over  existing  cross-border 
infrastructures  in  a  regionally  coordinated 
manner  while  respecting  operational  security 
requirements  will  help  to  balance  supply  and 
demand  on  a  wider  scale. 
In  addition, 
expanding  interconnections  with  central  and 
south-east  Europe,  as  identified  in  the  ten-
year  network  development  plan,  would 
enhance  regional  resilience.  Reinforcing  the 
also 
internal 
important  for  overall  network  development. 
(see Annex 9). 

transmission 

network 

is 

Strengthening efforts to 
decarbonise industry and transport 
through electrification and clean 
industrial infrastructure 

Austria  has  taken  measures  to  reduce 
greenhouse  gas  emissions,  but  not  yet 
quickly  enough  to  meet  its  2030  targets 
and  achieve  climate  neutrality  by  2040. 
The  2025  CSRs  highlighted  the  scope  for 
reducing  overall  reliance  on  fossil  fuels,  for 
improving  energy  efficiency  and  for  stronger 
emission 
the 
reductions,  particularly 
transport  and  industrial  sectors.  Austria  has 
made  some  progress,  while  further  measures 
would  be  beneficial.  In  2024,  greenhouse  gas 
emissions fell by 3% across all sectors, partly 
due  to  the  economic  downturn  and  milder 
weather  conditions  but  also  supported  by 
climate  measures  such  as  the  expansion  of 
renewable  energy,  CO2  pricing  and  incentives 

in 

(39)  Bundesministerium für Wirtschaft, Energie, Tourismus: 

Industriestrategie Österreich 2035.   

(40)  EU ETS Auctions2 (weblink: EU ETS Auctions | EEX). 

14 

 
 
 
for  switching to  climate-friendly  solutions (41). 
However,  emissions  are  projected  to  have 
increased again, by 1%, in 2025 (42). Based on 
current  greenhouse  gas  emission  scenarios, 
Austria  is  not  on  track  to  meet  its  2030 
emission  reduction  targets  (43)  and  would 
benefit  from  greater  decarbonisation  efforts. 
National  funding  for  the  climate  and  the 
environment  has  been  reduced  as  part  of 
budget 
out 
environmentally  harmful  subsidies,  Austria 
could  both  promote  decarbonisation  (44)  and 
create  more  fiscal  space  (45)  (see  Annex  3). 
Consistent  implementation  of  the  measures 
set out in the NECP is key (46).  

consolidation.  By 

phasing 

Graph 3.1: Energy Mix 

(1) In 2024, gross inland energy consumption in Austria 
was 1,330 TJ (2.5% of the total EU consumption) 
Source: Eurostat - NRG_BAL_C 

but 

while 

Austria  is  taking  action  to  decarbonise 
industry 
preserving 
effective 
competitiveness, 
implementation  and  sustained  support 
are  critical.  Manufacturing 
the 
largest source of greenhouse gas emissions in 
Austria, although emissions have been reduced 
lately.  Certain  regions  are  characterised  by  a 
high  concentration  of  fossil-fuel-dependent 

remains 

(41)  Environment Agency Austria: Treibhausgas-Emissionen 

sinken 2024 um drei Prozent. 

(42)  Environment Agency Austria: Anstieg der Treibhausgas-

Emissionen für 2025 erwartet 

(43)  Environment Agency Austria: Treibhausgas-Szenarien 

für die langfristige Budgetprognose 2025. 

(44)  Daniela Kletzan-Slamanig et al. (2022): Analyse 

klimakontraproduktiver Subventionen in Österreich, 
WIFO Study. 

(45)  Fiscal space is the flexibility available to the 

government for its spending choices. 

(46)  Environment Agency Austria: Treibhausgas-Emissionen 

sinken 2024 um drei Prozent. 

and  energy-intensive  sectors  accounting  for  a 
large  portion  of  jobs  (see  Annex  18).  Austria 
has  taken  measures  to  promote  industry 
decarbonisation,  such  as  targeted  funding  to 
the 
complement  EU  ETS  carbon  pricing, 
Transformation  of  Industry  programme  and 
the Climate and Energy Fund (see Annex 8). In 
January  2026,  Austria  presented  its  industrial 
strategy  2035,  which  aims  to  secure  growth 
and  competitiveness. 
to 
decarbonise  industry  through  measures  such 
as  advancing  hydrogen  infrastructure,  lifting 
the  ban  on  geological  CO2  storage  and 
establishing a legal framework for geothermal 
effective 
energy. 
(47)  and 
implementation  of  this  strategy 
sustained  support  for  transitioning  industrial 
production  and  developing  integrated  clean 
industrial  infrastructure  will  allow  Austria  to 
harness its potential. 

It  also  seeks 

coherent 

and 

A 

Transport  emissions  have  decreased  only 
slightly  and  there  is  no  structural  basis 
for  sustained  progress.  Road  transport  is 
Austria’s second largest source of greenhouse 
gas  emissions.  Austria  reduced  its  emissions 
by  2.7%  in  2024  (48),  primarily  due  to  falling 
freight traffic as a result of adverse economic 
conditions.  While  significant  greenhouse  gas 
emission  reductions 
in  the  effort-sharing 
sectors  (49)  are  key  to  Austria  achieving  its 
targets in  these sectors, policy  steps taken so 
far have remained limited (e.g. Climate Ticket, 
funding  programmes  for  emission-free  buses, 
commercial  vehicles  and  heavy-duty  vehicles, 
supported  by  the  Recovery  and  Resilience 
Facility  (RRF)).  Motorised  individual  transport 
remains 
travel, 
the  dominant  mode  of 
particularly in rural areas. Despite an increase 
in  the  use  of  public  and  rail  transport,  a 
comprehensive  mobility  transition  has  yet  to 
be  achieved (see Annex  8).  Electric mobility is 
increasingly 
reducing 
emissions,  and  progress  has  been  made  in 

contributing 

to 

(47)  Austrian Productivity Board: Industriestrategie 

Österreich 2035: Von der programmatischen Leitlinie 
zur wirksamen Umsetzungs- und Steuerungsarchitektur.  

(48)  Environment Agency Austria: Rückblick Sektorale 

Entwicklung. 

(49)  These sectors are domestic transport (excluding 

aviation), buildings, agriculture, small industry and 
waste. 

15 

0.080.080.080.070.230.220.180.180.350.360.360.340.340.350.390.4000.10.20.30.40.50.60.70.80.912021202220232024Solid fossil fuels, peat and oil shaleNatural gasOilRenewables 
     
 
 
from 

Austria 

charging 

important 

infrastructure 

the  mobility 
independence 

and 
expanding 
introducing  the  ‘eMove  Austria’  programme, 
supporting  electric mobility.  Further  expansion 
is  particularly  important  in  rural  areas.  Fiscal 
for 
incentives  are  an 
lever 
transition  and 
promoting 
fossil-fuel 
increasing 
imports.  However, 
taken 
counterproductive  steps  by  phasing  out  tax 
incentives  for  e-mobility  and  abolishing  the 
vehicle 
tax 
(Normverbrauchsabgabe)  for  small  transport 
vehicles. In line with its commitment under the 
NECP to reduce fossil-fuel subsidies, it will be 
important  to  clarify  the  scope  and  timetable 
for their phase-out through the working group 
to  address 
that  Austria  has 
environmentally  harmful 
incentives  and 
subsidies.  

registration 

set  up 

has 

Austria  has  introduced  subsidy  schemes 
that  support  thermal  renovations  and 
renewable  heating  technology.  As  a  result 
of  the  RRF-supported  Renewable  Heating  Act 
(2024),  which  prohibits  the  installation  of 
fossil  heating  systems  in  new  buildings,  in 
combination  with  subsidy  schemes,  the  share 
of  households  using  fossil  heating  declined 
from around 50% in 2003 to just under 38% 
in  2025  (50).  Achieving  climate  neutrality  by 
2040  would  require  replacing  approximately 
25 000 oil-based heating systems and 47 000 
gas-based  systems  annually.  With  subsidy 
budgets 
further  decarbonisation 
requires  alternative  funding  and  regulatory 
including  of 
the  Tenancy  Act 
reforms, 
(Mietrechtsgesetz) 
Residential 
and 
Property Act (Wohnungseigentumsgesetz) (see 
Annex 9). 

reduced, 

the 

Final  energy  consumption  declined 
in 
industry,  services  and  transport,  but  fell 
only  marginally  in  the  residential  sector. 
The  decreases  are  driven  by  modal  shifts 
towards  public  transport  and  rail,  and  fleet 
renewal.  Gains  from  energy 
renovations, 
supported  by  the  Renewable  Heating  Act  and 
financial 
incentives,  were  offset  by  an 
expanding  housing  stock  and  an  increase  in 

average dwelling size. This underlines the need 
for additional measures to meet targets under 
the  2030  Energy  Efficiency  Directive, 
in 
particular  by  addressing  regulatory  barriers, 
and funding gaps for the renovation of multi-
storey residential buildings (see Annex 9). 

Adapting to extreme weather 
events as costs are starting to 
strain public finances 

has 

Austria 

started 

its  climate 
Austria  has  strengthened 
adaptation 
rising 
but 
framework 
economic  losses  from  extreme  weather 
events  are  increasingly  burdening  public 
finances. 
to 
systematically  integrate  climate  adaptation 
into  its  policy  framework.  In  2025,  it  adopted 
the  RRP-supported  ‘climate  checks’  reform, 
which  requires  new  legislative  proposals  to 
assess  climate  risks  and  adaptability.  Nature-
based solutions that link climate adaptation to 
biodiversity  and  habitat  conservation  are 
increasingly  being  incorporated  into  policy 
responses  (51).  Moreover,  Austria’s  energy  and 
transport  infrastructure  has  a  low  level  of 
vulnerability  and  is  bound  by  law  to  monitor 
and  address  climate-related  risks  (52).  Despite 
these  efforts,  projections  show  that  Austria 
will  need  to  increase  its  annual  spending  on 
climate  adaptation  by  60%  (53)  –  EUR  1.6 
billion up to 2050  – as economic losses from 
climate  change  continue  to  increase.  Average 
annual  net  damages  are  projected  to  reach 
EUR 4.3–10.8 billion by 2050, driven in part by 
increasingly  frequent  major  floods.  Between 
1980  and  2024,  Austria  had  the  fifth  highest 
losses  per  capita  from  extreme  weather 
events  in  the  EU,  but  only  19%  of  these 

(51)  Federal Ministry for Agriculture and Forestry, Climate 
and Environmental Protection, Regions and Water 
Management, Biodiversitätsstrategie Österreich 2030+, 
Link. 

(52)  Critical Entities Resilience Act. 

(50)  Gebäudereport 2025 and https://www.erneuerbare-

energie.at/fd-hiw-nachbericht.  

(53)  European Commission, 2026, Assessment of EU and 
Member States Adaptation Investment Needs.  

16 

 
 
 
required  to  substantially  reduce  land  use  in 
Austria.   

Austria  produces  the  highest  amount  of 
municipal  waste per  inhabitant in  the  EU 
but  this  has  been  on  a  downward 
trajectory  for  several  years.  In  2023, 
Austria  generated  782 kg of  waste  per  capita 
compared  with  511 kg  per  capita  on  average 
in  the  EU.  An  overall  high  recycling  rate 
partially  mitigates  the  problem  of  waste 
generation, except for plastic packaging, which 
remains  below  the  EU  average.  Austria  has 
taken  steps  to  address  this  problem  through 
the  2022  circular  economy  strategy  and  two 
RRF-funded  initiatives  (57).  These  include  a 
‘repair  bonus’(58)  scheme 
the 
lifespan  of  electrical  and  electronic  devices 
and  a  new  deposit-refund  system  for  plastic 
and metal packaging launched in 2025. Strong 
waste  management 
including 
separation, reuse and recycling, have been the 
main  driver  behind 
in 
reduction 
greenhouse gas emissions from waste (59). 

to  extend 

policies, 

the 

damages  are  privately  insured  (54).  However, 
very  severe  events  –  such  as  the  floods  in 
autumn  2024  -  require  additional  ad  hoc 
public  funding.  Strengthening  incentives  for 
private  insurance  coverage  could  rebalance 
the  distribution  of  private  and  public  risk  and 
ease  pressure  on  public  finance  as  extreme 
weather events become more frequent. This, in 
turn,  would  free  up  additional  resources  for 
preventative measures. In particular, improved 
spatial planning and investing in nature-based 
solutions could help limit future flood damage. 

regions 

Water resilience and sustainable land use 
are  increasingly  emerging  as  challenges 
for  Austria.  The  eastern 
face 
seasonal  water  scarcity  driven  by  rising 
demand,  declining  groundwater  levels  and 
comparatively low water productivity. By 2050, 
Austria’s  water  demand 
is  estimated  to 
increase by 11-15% while water resources are 
set to decline by up to 23% (55). Reduced water 
availability  also 
increases  the  density  of 
pollutants  in  surface  water  bodies,  which 
poses challenges for regions with high nitrate 
emissions. Moreover, in the past five years, the 
land  use, 
land  use  change  and  forestry 
(LULUCF) sector has turned from a carbon sink 
into  a  net  emission  source.  This  has  been 
caused  by  reduced  growth  rates,  decay  in 
forest  soils  and  salvage  loggings  due  to 
storms  and  bark  beetle  infestations.  As  a 
result, Austria is not on track to meet its 2030 
target for net carbon removals (56). The forest-
based bioeconomy is an important income and 
employment  factor  in  certain  rural  areas.  In 
2020,  Austria  established  the  Austrian  Forest 
Fund  to  support  climate-resilient  forests  and 
biodiversity.  Further  stepping  up  action  to 
improve 
strengthen 
ecosystem 
through 
mobilisation of necessary investments, will be 
essential.  Moreover, 
timely 
implementation of the national soil strategy is 

forest  health  and 
including 
services, 

and 

full 

(54)  Economic losses from weather- and climate-related 

extremes in Europe | Indicators | European Environment 
Agency (EEA). 

(55)  Federal Ministry Republic of Austria, 2023, Austria’s 

Water Treasure, Link.  

(56)  Austria's Annual Greenhouse Gas Inventory 1990-2024 

p.18. 

(57)  The Austrian Circular Economy Strategy p.10. 

(58)  Following the expiry of the ’repair-bonus’ in May 2025, 
the scheme was reintroduced in 2026 in a revised form 
and under the new name ’Geräte-Retter-Prämie’. 

(59)  News | Treibhausgas-Bilanz 2024 | Umweltbundesamt. 

17 

 
 
 
SKILLS, QUALITY JOBS AND SOCIAL FAIRNESS 

on 

(CSRs) 

significant 

in 
Austria  has  made  some  progress 
its  2025  country-specific 
addressing 
recommendations 
labour 
supply,  skills  development  and  social 
inclusion,  but 
challenges 
persist  across  several  areas.  The  2025 
CSRs  called  for 
labour  market 
increasing 
participation  of  women,  improving  the  quality 
and availability of childcare, raising basic skills 
from  an  early  age,  strengthening  green  skills 
and  enhancing  the  labour  market  integration 
of  older  workers  and  disadvantaged  groups. 
While  measures  were  introduced  to  expand 
early  childhood  education  and  care,  adapt 
vocational  training  curricula  for  the  green 
transition, 
reform  pension  pathways  and 
strengthen adult learning programmes, further 
efforts  are  needed  to  reverse  declining  basic 
levels,  reduce  high  part-time  rates 
skills 
among  women, 
apprenticeship 
improve  social  protection 
shortages  and 
among vulnerable groups. 

address 

There is scope to raise full-time 
labour market participation of 
women  

Despite  strong  female  labour  market 
participation,  part-time  work  among 
women  remains  high,  lowering  overall 
hours  worked  and  constraining  women’s 
lifetime incomes. In 2025, Austria received a 
CSR to create incentives to boost the numbers 
of  hours  worked  overall  and  the  full-time 
labour  market  participation  of  women.  In 
2025,  the  share  of  women  working  part-time 
decreased  slightly  (by  1.5  pps  to  49.6%)  but 
remains the second highest in the EU. Average 
usual  weekly  hours  worked  across  genders 

stagnated at 35.8 hours (60). Widespread part-
time  work  among  women  also  contributes  to 
one  of  the  highest  unadjusted  gender  pay 
gaps  in  the  EU  and  gender  gap  in  lifetime 
earnings,  with  a  significantly  higher  share  of 
women working in low-paid jobs (61). Together 
with shorter contributory periods, this leads to 
lower  pensions  for  women  on  average, 
resulting  in  a  higher  poverty  risk  in  old  age 
to  higher  pay 
among  women.  A  shift 
transparency  could  help  reduce  the  relatively 
high  gender  pay  gap  and  thereby  create  and 
incentivise more weekly hours for women (62). 
Caregiving  responsibilities  are  listed  as  the 
main  reasons  for  part-time  employment  (see 
graph  4.1)  among  women  in  Austria  (over 
40%), while less than 25% of women working 
part-time do not desire full-time employment. 
Recent  reforms  focused  on  improved  tax 
incentives  for  overtime  and  holiday  work  but 
did not tackle the disincentives in the tax  and 
benefit system to shift from part-time to full-
time  employment  (63)  as  well  as  the  single-
earner tax credit which in many cases leads to 
a disincentive for one parent, often women, to 
work full-time (64).  

(60)  Average actual weekly hours worked stagnated, at 33.8 
hours. On both indicators, Austria is among the lowest in 
the EU. 

(61)  Statistik Austria, Gender pay gap in Austria at 17.6% in 

2024, 2026.  

(62)  IMF, Austria. Selected Issues. IMF Country Report No. 

24/108, 2024. 

(63)  Increasing hours worked from 0% to 50% and from 

50% to 100% in Austria entails a large loss of earnings 
due to taxes, lower benefits and net childcare costs, 
amounting to up to 80% of earnings. See OECD (2024): 
OECD Economic Surveys: Austria 2024.  

(64)  See also OECD Economic Surveys: Austria 2026 (EN). 

18 

 
 
 
Graph 4.1: Women’s part-time employment in 
percentage of full-time and reasons for part-
time work 

Improving basic skills and 
addressing skills shortages remain 
urgent priorities  

in 

Increasing  support  to  pupils  with  a 
disadvantaged 
socio-economic 
teacher 
background  and  addressing 
shortages  could  contribute  to  increase 
basic  skills  and  social cohesion.  The  2025 
CSRs  called  on  Austria  to  improve  levels  of 
basic skills, starting from an early age, notably 
at  school 
literacy, 
level.  Basic  skills 
numeracy  and  digital  competencies  are 
declining (see Annex 13). Austria is off track to 
reach  the  European  Education  Area  target  of 
less  than  15%  underachievement  by  2030, 
with  wide  socio-economic  and 
regional 
disparities.  Early  school  leaving  is  increasing, 
particularly  among  disadvantaged 
learners 
and  those  with  a  migrant  background.  Over  a 
quarter  of 
the  Austrian  population  and 
students have a migrant background and face 
in  education  outcomes 
substantial  gaps 
compared  with  non-immigrant 
students. 
Around 43.5% of young people with a migrant 
background  attend  schools  for  children  with 
special  educational  needs  (66);  this  share  is 
twice  as  high  as  for  their  peers  without  a 
migration  background 
(see  Annex  13). 
Language  training  is  a  key  enabler  for  early 
integration  into  education  and  acquiring  solid 
basic  skills.  For  this  reason,  the  government 
increased  the  resources  and  revising  the 
model  for  German 
in 
schools. 
educational  outcomes 
remain uneven across federal states (67). Pupils 
with  a  migrant  background,  from  low-income 
households or in structurally weak regions, are 
more 
to  underperform.  Persistent 
teacher  shortages,  despite  the  adoption  of  a 
resource  strategy, 
comprehensive  human 
constrain  the  capacity  to  improve  learning 
outcomes,  particularly 
in  disadvantaged 
regions,  in  science,  technology,  engineering, 

language  support 

Inclusive 

likely 

(66)  https://www.statistik.at/fileadmin/publications/BiZ-

2024-25.pdf.  

(67)https://www.statistik.at/atlas/?languageid=1&mapid=the
m_bevoelkerung_kth_bq&utmBundesergebnisbericht_iK
MPLUS_PRIM_2023-2025. 

19 

(1) 15-64 year-olds, 2024 
(2) Data excluded for countries with women's part-
time work below 20% 
Source: Eurostat, lfsa_eppga and lfsa_epgar 

have 

years,  measures 

Participation in early childhood education 
and care improved, but challenges remain 
in terms of quality and regionally uneven 
provision. In 2025, Austria received a CSR to 
the  quality  and  availability  of 
improve 
childcare services in order to support the full-
time labour market participation of women. In 
recent 
been 
implemented to increase the number of places 
in  early  childhood  education  and  care,  along 
with  additional  training  for  staff.  A  second 
compulsory  year  in  ECEC  is  envisaged  to  be 
introduced in 2027. However, both access and 
quality  remain  uneven  across  federal  states 
and  municipalities,  also  due  to  the  significant 
fragmentation  of  the  governance  system  and 
of financing (see Annexes 13 and 18). In 2024, 
participation  in  early  childhood  education  and 
care  under  the  age  of  three  was  highest  in 
Vienna  and  Burgenland,  and  lowest  in  Styria 
and  Upper  Austria  (65).  Shortages  of  qualified 
staff  also 
risk  for  quality.  A 
compulsory  quality  framework  with  clear 
quality  standards  could  help  address  uneven 
quality at the local level. 

imply  a 

(65)  Statistik Austria, STATatlas - Daycare centers -

attendance rates, 2026. 

0102030405060MTESFIFRSEITEU-27IELUEADKBEDEATNLCare responsibilitiesOther personal reasonsOther family reasonsEducation or trainingOwn illness or disabilityNo full-time job foundOther reason 
       
 
 
and  mathematics  and  vocational  tracks  (see 
Annex  13).  Keeping  young  people  in  general 
education  with  systematic  follow-up  systems 
could help ensure that investment in education 
into  higher  participation,  skills 
translates 
utilisation. 
adopted 
recently 
‘Chancenbonus’  programme  aims  to  address 
these  gaps.  Targeted  support  combining basic 
inclusive  teacher 
learning, 
skills, 
training  and  flexible  second-chance  pathways 
could  improve  integration,  employability  and 
social cohesion. 

language 

The 

of 

greening 

including 

Austria has made substantial progress on 
green  skills,  but  skills  shortages  remain 
high  with  a  clear  regional  pattern.  In 
2025, Austria received a CSR to step up policy 
efforts aimed at the provision and acquisition 
of  skills  and  competencies  needed  for  the 
green  transition.  Austria  made  substantial 
progress by adapting vocational education and 
training curricula, including new labour market 
responsive  qualifications, 
in  the 
Annex  13). 
areas 
Nevertheless,  skills  shortages  and  regional 
mismatches 
the 
recruitment  of  skilled  tradespeople,  for  jobs 
qualifications, 
medium-level 
requiring 
vocational  education  and 
(VET) 
qualifications  or  completed  apprenticeships. 
High  vacancy  rates  in  some  regions  (e.g. 
relatively  high 
Salzburg) 
unemployment  in  others  (e.g.  Vienna).  Marked 
differences  in  rental  prices,  social  housing 
availability and of childcare places for children 
under  the  age  of  three  hinder  regional  labour 
mobility (see Annex 11).  

contrast  with 

continue 

hamper 

training 

(see 

to 

in  2025,  and 

The  vocational  education  and  training 
system  faces  growing  challenges.  Around 
24 500  aspiring  apprentices  were  unable  to 
find  placements 
regional 
disparities  continue  to  affect  the  balance 
between  supply  and  demand,  with  small-  and 
medium-sized  enterprises 
facing 
greater  challenges.  Training  quality  is  also  a 
concern, including the use of digital tools (see 
Annex  13).  The  public  employment  service 
partly  addresses  training gaps  through  supra-
company  apprenticeships,  which  provide 
access  to  vocational  training  for  vulnerable 
young people. The apprenticeship system could 
be  strengthened  by  bolstering  the  monitoring 

(SMEs) 

and delivery of basic skills in schools, including 
VET institutions, increasing access to education 
and  training  for  individuals  with  a  migrant 
background,  ensuring  rigorous  quality  control 
in  both  education  and  apprenticeships,  and 
providing 
psycho-social 
support. 

comprehensive 

of 

skills 

adults 

have 
among 
Basic 
deteriorated, requiring stronger upskilling 
and  reskilling  efforts.  Austria  received  a 
CSR in 2025 urging to raise the levels of basic 
skills  in  the  overall  population.  The  latest 
results  of  the  OECD  Programme  for  the 
International 
Adult 
Assessment 
Competencies  (PIAAC)  point  to  a  worsening 
trend in basic skills among adults, notably for 
literacy  skills  (68).  To  counteract  this  trend, 
Austria  provides  free  and  quality-assured 
basic  skills  classes  for  adults  as  well  as 
courses leading to a compulsory school leaving 
certificate  (see  Annex  13).  Further  enhancing 
upskilling  and  reskilling  efforts, 
including 
improving  access  to  courses,  together  with  a 
strengthened  coordination  of 
future 
‘lifelong  learning  2040  strategy’  between  the 
federal  states  and  the  federal  level,  could 
further  improve  basic  skills  and  help  Austria 
reach its 2030 adult learning target of 62%.  

the 

Labour market integration of older 
workers and disadvantaged groups 
lags behind, and poverty and 
housing risks remain elevated 

Austria  could  do  more  to  prevent  early 
labour  market  exit  of  older  workers  and 
raise  the  effective  retirement  age.  In 
2025,  Austria  received  a  CSR  to  improve  the 
labour  market  outcomes  for  older  workers,  to 
improve the fiscal sustainability of the pension 
system  and 
the  effective 
retirement  age  (see  Section  1).  The  gradual 
increase  of  the  statutory  pension  age  of 
women  that  started  in  2024  has  already 
contributed  to  improving  the  employment  of 
older  women  and  increased  their  effective 

increase 

to 

(68)  See Austria Country Report 2025. 

20 

 
 
in 

trend 

among 

(20.9%). 

transfers 

risks, 
Poverty  and  social  exclusion 
particularly 
and 
children 
vulnerable  groups,  rose  in  2025.  In  2019, 
Austria  pledged  to  decrease  its  at-risk-of-
poverty  or  social  exclusion  (AROPE)  rate  by 
204 000  people  by  2030.  After  two  years  of 
recession,  and  incomes  in  the  lowest  ten 
percentile  growing  at  a  slower  pace  than 
average  and  high  incomes,  the  AROPE  rate 
increased  in  2025  to  18.8%,  counter  the  EU 
wide 
Children  were 
disproportionately  more  affected,  with  25.3% 
(2024:  20.9%)  being  at  risk  of  poverty  or 
social  exclusion,  which  places  Austria  above 
the EU average. At the same time, the impact 
of  social 
reducing  poverty 
decreased  from  40.7%  in  2024  to  32.8%  in 
2025,  Austria  is  today  further  away  from 
reaching  its  2030  target  than  in  2019  and 
sustained  and  comprehensive  anti-poverty 
policies  remain  essential  to  ensure  sufficient 
progress.  Significant 
imbalances 
persist  (from  14.6%  in  Salzburg  to  29.4%  in 
Vienna)  and  groups  such  as  older  people, 
single  parents,  people  with  a  migrant 
background  and  persons  with  disabilities  face 
elevated  risks  (see  Annex  12).  People  born 
outside  the  EU  face  an  AROPE  rate  of  42.5% 
compared with 11.5% of those born in Austria 
(EU:  38.9%),  resulting  in  one  of  the  highest 
poverty  gaps  in  the  EU  of  31  pps  (EU: 
21.3 pps).  Access  to  integration  measures  is 
also  hampered  by  non-compatibility  with 
working hours or childcare or the lack of digital 
skills.  

regional 

and 

rates 

co-payment 

Regional differences in care provision and 
high  service  costs  pose  challenges  to 
equitable access to long-term care. Long-
term care (LTC) recipients face a high level of 
cost  heterogeneity  across  Austria  due  to 
varying 
social 
assistance  schemes  across  federal  states, 
which  undermine  equity  in  the  uptake  of  care 
(see Annex 12). With a dominant focus on one-
to-one  care  performed  by  family members  or 
live-in carers (24h care), LTC provision remains 
expensive.  The  LTC  allowance  is  only  granted 
from  65  hours  of  care  needs  per  month  and 
co-payments  are  higher  for  low  care  needs. 
This  creates  an  incentive  for  the  use  of 
informal care.   

retirement age, albeit from a low level. Recent 
reforms  –  including  tighter  access  to  early 
retirement,  the 
introduction  of  a  partial 
pension and support for the re-employment of 
older  long-term  unemployed,  as  well  as  the 
announcement of tax incentives for work after 
the statutory retirement age – are steps in the 
right  direction  but  the  effects  remain  to  be 
seen.  Moreover,  Austria  continues  to  work  on 
implementing  measures  to  address  other 
drivers  of  early  labour  market  exit.  These 
relate  to  health  problems,  the  need  for  age-
adapted  workplaces  and  roles,  and  the  need 
for  training, including  for  digital  skills.  Further 
incentives  for  deferred  retirement  would  also 
improve the fiscal sustainability of the pension 
system  and  help  Austria  to  reach  its  2030 
employment 
(see 
rate 
Annexes 2 and 20). 

target  of  79.9% 

and 

jobseekers 

Labour  market  integration  policies  for 
people  with  a  migrant  background  and 
low-skilled 
remain 
insufficient.  In  2025,  Austria  received  a CSR 
to  improve  the  labour  market  integration  of 
disadvantaged groups,  such  as  low-skilled  job 
seekers 
a  migrant 
people  with 
background. In-work poverty in Austria rose in 
2025  and  people  born  outside  the  EU  are 
significantly  more  at  risk  compared  to  those 
born  in  Austrian  (22.4%  vs  6%).  For  people 
with  a  migrant  background,  conditional 
integration  measures  starting  from  ‘day  one’ 
have  been  announced.  Further  efforts  are 
needed 
recognition  of 
qualifications,  the validation  of  skills  acquired 
outside the EU, and to provide flexible up- and 
reskilling  opportunities,  additional  language 
classes, 
including  at  the  workplace,  and 
improve advisory services on the links between 
social  benefits,  housing  and  employment (see 
Annexes  11  and  12).  From  2026,  the  former 
education 
(Bildungskarenz)  will  be 
replaced  by  a  new  streamlined  system  where 
financial support is no longer guaranteed as a 
legal  entitlement  (69).  Sustained  funding  of 
active  labour  market  policies  could  further 
improve the situation of low-skilled jobseekers. 

to  support 

leave 

the 

(69)  Parlament Österreich, Nachfolgemodell für 

Bildungskarenz steht, 2025.  

21 

 
 
Shortages  in  the  healthcare  workforce 
limit timely access to healthcare. There is 
an  uneven  geographical  distribution  of  health 
professionals,  with  the  density  highest  in 
Vienna and up to 36% lower in regions such as 
Upper  Austria.  The 
share  of  general 
practitioners  is  low  and  has  declined  from 
16% of all physicians in 2010 to 13% in 2023, 
leading  to  shortages  especially  in  rural  areas. 
At  the  same  time,  the  number  of  doctors 
contracted  with  the  public  health  insurance 
funds  has  stagnated,  while  the  number  of 
non-contracted  physicians  has  more  than 
doubled  over  the past two  decades.  This  shift 
towards  non-  contracted  private  practice 
inequities  and 
exacerbates  geographical 
times  for 
increases  variation 
accessing 
the 
government  estimates  that  around  51  000 
additional  nursing  staff  will  be  needed  by 
2030 compared with 2023, to replace retirees 
and  meet  rising  care  needs  due  to  an  ageing 
population (see Annex 15). 

in  waiting 

healthcare. 

Moreover, 

22 

 
on  the  basis  of  expensive  fossil  fuels,  in 
particular from imports; 

•  further  improving  energy  efficiency 
and reducing emissions in industry and 
transport, in particular by accelerating the 
electrification  of  road  transport,  and  by 
sustaining 
decarbonising 
industrial processes and developing a clean 
industrial  infrastructure  prioritising  regions 
with the highest emission intensity; 

support 

for 

•  addressing the high share of part-time 
work,  especially  among  women,  through 
better labour market incentives including by 
improving 
further 
improving  access  and  quality  of  early 
childhood  education  and 
care,  also 
addressing regional disparities;  

incentives  and 

tax 

•  promoting  human  capital  development 
by  accelerating  efforts  to  bolster  basic 
skills  from  an  early  age,  including  through 
an  improved  focus  on  equity  and  inclusion 
in  education,  and  further  promoting  the 
availability  of  vocational  education  and 
training,  addressing  regional  disparities; 
and  targeted  measures  for  the  skills 
development  of  older  workers,  low-skilled 
and  those  with  a  migrant  background  to 
enhance labour market outcomes. 

In other areas, Austria would benefit from: 

costs 

construction 
building 

•  reducing 
by 
and 
reviewing 
expanding  affordable  housing 
to 
alleviate  pressures  on  new  entrants  and 
vulnerable  groups  and 
reduce  severe 
housing deprivation. 

standards 

KEY FINDINGS 

In  areas  covered  by  existing  country-
specific  recommendations,  Austria  would 
benefit from: 

•  strengthening  the  sustainability  and 
finances  by 
efficiency  of  public 
containing  the  projected  increase  in  age-
related  public  expenditure  (particularly  on 
pensions,  healthcare  and  long-term  care), 
including  by  further  raising  the  effective 
retirement age, as well as by enhancing the 
quality  of  spending  and  by  simplifying  the 
fiscal  framework  across  and  between 
government levels; 

• 

improving the tax mix to support growth 
and  jobs,  by  shifting  the  tax  burden  away 
from labour;  

•  strengthening 
by 
productivity 
innovation  and  business 
fostering 
dynamism,  in  particular  by  improving  the 
efficiency  of  R&D  spending  and  research 
commercialisation,  by  facilitating  faster 
adoption of digital technologies, and better 
including  by 
access  to  growth  capital, 
pensions 
strengthening 
for 
schemes  and 
institutional investors; 

removing  barriers 

supplementary 

•  reducing 

burden, 
administrative 
regulatory  and  single  market  barriers 
for  businesses,  in  particular  in  highly 
regulated  business  services,  including  by 
streamlined  permitting  and  digital  one-
stop-shop solutions; 

•  tackling  high  energy 

costs  and 
accelerating  the  energy  transition  by 
implementing  and  adopting  the  necessary 
regulatory  reforms  (electricity  market  and 
permitting, 
respectively)  and  ensuring 
investments  in  wind  energy,  grids  and 
storage  to  make  the  energy  system  more 
flexible and to avoid electricity price-setting 

23 

 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

A1.  CSR implementation 

Fiscal 

A2.  Fiscal developments and debt sustainability 

A3.  Taxation 

Productivity 

A4. 

Innovation to business 

A5.  Single market and industry 

A6.  Savings, investment and access to finance 

A7.  Effective institutional framework 

Sustainability 

A8. 

Industry decarbonisation, circularity and climate mitigation 

A9.  Affordable energy transition 

A10.  Climate adaptation, preparedness and environment 

Fairness 

A11.  Labour market 

A12.  Social policies 

A13.  Education and skills 

A14.  Social scoreboard 

A15.  Health and health systems 

A16.  Housing 

Horizontal 

A17.  Sustainable development goals 

A18.  Competitive regions 

A19.  Transport 

LIST OF TABLES 

A1.1. 
A2.1. 
A2.2. 
A2.3. 
A2.4. 
A3.1. 

CSR implementation and Commission assessment 
Supplementary pension schemes - scope for expansion 
Projected change in ageing-related expenditure in 2025-2040 and 2025-2070 
Fiscal governance database indicators and public accounting maturity 
Reforms and Investments underpinning the extension of the adjustment period for Austria 
Taxation Indicators 

27 

30 

36 

36 

43 

47 

47 

54 

64 

70 

75 

75 

83 

89 

97 

97 

101 

105 

110 

111 

115 

120 

120 

122 

128 

30 
38 
38 
41 
42 
44 

 
 
 
Key innovation indicators 
Single Market and Industry 
Savings and Investments Union summary diagnostic 
Financial sector indicators 
Austria. Selected indicators on better regulation practices for primary legislation 
Digital Decade key performance indicators: availability of digital public services 
Key clean industry and climate mitigation indicators: Austria 

A4.1. 
A5.1. 
A6.1. 
A6.2. 
A7.1. 
A7.2. 
A8.1. 
A10.1.  Key Adaptation Indicators 
A14.1.  Social Scoreboard for Austria 
A15.1.  Key health indicators 
A18.1.  Main development trends, challenges and the concentration of resources 
A18.2.  Key regional indicators (at NUTS 2 level) for Austria 
A19.1.  ERTMS deployment in Austria. 

LIST OF GRAPHS 

Composition of non-financial companies' funding 
Capital markets and financial intermediaries 
Composition of households' financial assets 
Trust in the justice system, regional / local authorities and in governments 

Contributions to the change in the general government balance (% of GDP) 
Public investment evolution and composition (% of GDP) 
Primary spending evolution and composition 
Investment composition, % of GDP 
Tax revenue by economic function in 2024, AT (outer ring) and EU-27 (inner ring) 
Property tax revenues as % of total tax revenues 
Tax wedge for single and second earners as % of total labour costs, 2025 
Share of publications in the top 10% most-cited publications worldwide, 2012 and 2022 
Patent Cooperation Treaty patents per EUR billion GDP in key emerging technologies, 2020-2022 (Austria vs EU-27) 
Venture capital (market statistics) as a percentage of GDP, 2024 

A2.1. 
A2.2. 
A2.3. 
A2.4. 
A3.1. 
A3.2. 
A3.3. 
A4.1. 
A4.2. 
A4.3. 
A5.1.  Manufacturing industry production: total and selected sector, index (2021=100), 2015-2024 
A6.1. 
A6.2. 
A6.3. 
A7.1. 
A7.2.  Most time-consuming aspects of service delivery 
A8.1. 
A9.1. 
A9.2. 
A9.3. 
A11.1.  Key labour market indicators 
A11.2.  Labour and skills shortages and the vacancy rate 
A12.1.  AROPE rates across subgroups 
A13.1.  Number of apprentices in Austria 
A15.1.  Treatable mortality 
A15.2.  Out-of-pocket payments: share in healthcare spending and categories, 2023 
A16.1.  House prices, rents and price-to-income evolution in IT and EU27 since 2005 
A16.2.  House supply indicators in AT since 2005 
A16.3.  Borrowing costs and housing loans, in AT and EA since 2018 
A16.4.  Housing affordability selected indicators 
A17.1.  Progress towards the SDGs in Austria 
A18.1.  Productivity per hour worked: growth and level, NUTS 2 
A19.1.  Austria's road fatalities per million, 2024 

Greenhouse gas emissions in the effort sharing sectors, 2005, 2023, and 2024 
Electricity and gas prices for household and non-household consumers, first half of 2025 
Low-carbon electricity generation vs. electricity wholesale prices, 2025 
Austria’s installed renewable capacity vs electricity generation mix 

LIST OF MAPS 

A18.1.  GDP per head compared with the EU average. 
A18.2.  Population change, NUTS 3, 2015-2024 
A18.3.  Housing affordability – price-to-income ratio NUTS 3, 2020 
A19.1.  TEN-T cross-border & national priority sections in Austria. 

28 

53 
63 
64 
69 
71 
72 
82 
96 
110 
113 
123 
126 
128 

36 
37 
37 
40 
43 
43 
45 
48 
49 
51 
61 
64 
65 
66 
70 
71 
77 
84 
84 
86 
97 
98 
101 
107 
111 
112 
115 
116 
116 
119 
120 
122 
130 

122 
125 
127 
129 

 
 
 
A19.2.  Austria's road safety map 

130 

29 

 
 
 
 
ANNEX 1: CSR IMPLEMENTATION  

30 

 
 
 
 
 
 
 
 
31 

 
 
32 

 
33 

 
34 

 
 
35 

 
 
 
FISCAL 
ANNEX 2: FISCAL DEVELOPMENTS AND DEBT SUSTAINABILITY 

in 

developments 

This annex discusses selected topics in public 
finance  and 
fiscal-
structural  country-specific  recommendations 
(CSRs)  addressed  to  Austria  in  July  2025. 
These  CSRs  include  a  call  to  strengthen  defence 
spending  and  readiness  while  implementing  a 
the  Council 
fiscal 
Recommendation  of  8  July  2025.  Austria  also 
received  a  recommendation  in  July  2025  to  take 
decisive  action  to  safeguard  the  sustainability  of 
its  public  finances,  including  by  improving  the 
fiscal  sustainability  of  its  healthcare,  long-term 
care and pension systems.  

line  with 

strategy 

in 

endorsing 

On  8  July  2025,  the  Council  adopted  the 
Recommendation 
Austria’s 
medium-term  fiscal-structural  plan  (70).  The 
plan  includes  an  extended  fiscal  adjustment  over 
seven years, underpinned by a set of reforms and 
investments.  At  the  same  time  the  Council  also 
adopted  a  Recommendation  under  Article  126(7) 
TFEU to correct the excessive deficit in Austria (71). 
On  17 February 2026,  the  Council  also  activated 
the  national  escape  clause  for  Austria  in  order  to 
facilitate  its transition  to higher  levels  of  defence 
spending (72). 

Developments in the government 
balance, debt and public expenditure 
(73) 

Austria’s  government  deficit  amounted  to 
4.2%  of  GDP  and  the  government  debt-to-
GDP  ratio  amounted  to  81.5%  at  the  end  of 
2025.  Based  on  the  Commission  Spring  2026 
Forecast,  Austria’s government deficit is projected 
to  decrease  to  4.1  %  of  GDP  in  2026  and  to 
remain  at  the  same  level  in  2027.  A  previous 
increase  in  the  deficit  was  largely  driven  by 
Austria’s  rising  general  government  expenditure, 
which  reached  55.2%  of  GDP  in  2024,  around  3 
pps  higher  than  in  previous  years.  Expenditure  is 
expected  to  decline  over  the  forecast  horizon, 
reaching 55.0% of GDP in 2027, still above the EU 
average.  

Graph A2.1: Contributions to the change in the 
general government balance (% of GDP) 

(70)  OJ C, C/2025/3958, ELI: 

http://data.europa.eu/eli/C/2025/3958/oj.  

(71)  Council Recommendation with a view to bringing an end to 
the situation of an excessive deficit in Austria, adopted on 
8 July 2025. The corrective net expenditure path 
recommended by the Council under the excessive deficit 
procedure is consistent with the maximum growth rates of 
net expenditure set out in the plan. 

(72)  Council Recommendation of 17 February 2026 allowing 

Source: European Commission Spring Forecast 

Rising  public  investment  is  improving  the 
in  Austria.  Unlike 
quality  of  expenditure 
previous  shocks  that  led  to  significant  cuts  in 
Austrian public investment, public investment was 
preserved during the pandemic and is expected to 
reach 4.1% of GDP in 2026, up from 3.1% in 2019 
(see  Graph  A2.2).  It  is  set  to  stabilise  in  2027 
despite  the  lower  support  from  the  Recovery  and 

Austria to deviate from the maximum growth rates of net 
expenditure as set by the Council under Regulation (EU) 
2024/1263 (Activation of the national escape clause) (OJ C, 
C/2026/1158). 

(73)  Figures underpinning fiscal surveillance (net expenditure 
growth) are provided in the Fiscal Statistical Tables 
(SWD(2026)200) providing background data relevant for the 
assessment of the budgetary policies of the Member States. 

36 

-4-3-2-1012342021202220232024202520262027RevenueExpenditureChange in budget balance% of GDP 
 
 
 
   
 
 
 
thanks 

Resilience  Facility 
to  higher 
(RRF) 
investment financed by national budgets, including 
in  defence.  Austria  is  projected  to  spend more  on 
nationally  financed  investment  than  it  did  before 
the COVID-19 pandemic.  

in  %  of  total  spending  has  declined  since  2019, 
which is a point to watch as these are considered 
to be growth-friendly spending categories. Despite 
declines  on  spending  in  these  specific  growth-
friendly 
categories,  growth-friendly  spending 
overall has increased since 2019.   

Graph A2.2: Public investment evolution and 
composition (% of GDP) 

Graph A2.3: Primary spending evolution and 
composition 

Source: Spring Forecast  

The  type  of  expenditure  that  has  a  greater 
impact  on  GDP  had  remained  broadly  stable 
over  three  decades  but  has  now  slightly 
increased  since  2019.  This  may  be  related  to 
the impact of the RRF, which possibly facilitated a 
more quality-based fiscal strategy. Zooming in on 
the  composition  of  spending,  social  protection 
represents  the 
largest  share  of  total  public 
expenditure  (above  40%)  followed  by  health, 
economic  affairs(74),  general  public  services  and 
education  (each  accounting  for  at  least  10%  of 
total  government  spending).  Since  2019,  Austria’s 
public  expenditure  on 
the 
(See 
environment  has 
Graph  A2.3).  Spending  in  other  areas  (such  as 
economic 
social 
protection, housing and public order) has also risen 
since  2019  but  more  modestly,  with  the  rise  in 
defence  spending 
recent  security 
developments.  By  contrast,  expenditure  on  R&D, 
education  and,  to  a  lesser  extent,  communication 

transport  and 
increased  significantly 

reflecting 

defence, 

affairs, 

health, 

(74)  This refers to the set of government activities, policies, and 

expenditures aimed at regulating, supporting, and developing 
economic activity across major sectors, including general 
economic and labour policies, agriculture and natural 
resources, energy, industry, construction, and other economic 
functions not elsewhere classified.  

Source: Based on the Classification of the Functions of 
Government (COFOG data).  
Note: Based on economic literature, the categories considered 
to have a greater growth impact include education, R&D, 
health, transport and communication (See Barbiero and 
Cournede (2013), Gemmel et al. (2016), Lupu et al. (2018), 
Cepparulo and Mourre (2020) and OECD (2025)).   

contributions) 

Austria  has  very  high  tax  revenues  as  a 
share  of  GDP  and  relies  heavily  on  labour 
taxes  are 
taxes,  while  growth-friendly 
underused.  In  2025  Austria’s  total  tax  revenues 
as  a  percentage  of  GDP  (including  compulsory 
social 
to  44.0%. 
compared with an EU average of 39.9%. Total tax 
revenues  are  projected  to  increase  to  44.1%  of 
GDP in 2026 and to decrease to 43.9% of GDP in 
2027  according  to  the  Spring  2026  Forecast  (75). 
The  tax  mix  in  Austria  relies  heavily  on  labour 
taxation,  including  social  contributions,  while  tax 
types  that  are  considered  less  detrimental  to 

amounted 

(75)  Data retrieved from the AMECO database (https://economy-

finance.ec.europa.eu/economic-research-and-
databases/economic-databases/ameco-database_en).  

37 

0.00.51.01.52.02.53.03.54.04.5201920202021202220232024202520262027% of GDPDefenceRRF grants and other EU fundsOther nationally-financed1014182244485256200720082009201020112012201320142015201620172018201920202021202220232024a) Evolution (% of GDP)Primary expenditureSpending with higher impact on GDP (rhs)-1.0-0.6-0.20.20.6GeneralservicesInterestspendingEducationR&DCultureCommunicationDefencePublicorderHousingSocialprotectionHealthOther economicEnvironmentTransportb) Compositional change 2024-2019 ( % of total spending) 
   
 
   
 
Table A2.1:  Supplementary pension schemes - scope for expansion 

Source: European Commission. 

Table A2.2:  Projected change in ageing-related expenditure in 2025-2040 and 2025-2070 

Source: 2024 Ageing Report (EC/EPC). 

growth 
or 
environmental taxes) are underused (see Annex 3).  

recurrent 

property 

(such 

as 

The costs of ageing 

Total  ageing-related  spending  in  Austria  is 
projected  to  rise  by  about  1 pp.  of  GDP 
between  now  and  2040,  to  around  29%  of 
GDP,  with  a  further  1 pp.  increase  between 
2040  and  2070  (see  Table  A2.2).  The  overall 
increase is mainly the result of a projected rise in 
long-term  care  and  healthcare. 
spending  on 
Austria  has  the  second  highest  total  spending  on 
ageing-related items of all EU Member States. This 
will remain the case in 2040 and 2070 according 
to projections.(76) 

Public  spending  on  pensions  as  a  share  of 
GDP is projected to increase by about 0.5 pps 
over the next decade and decline thereafter. 
Despite  its  projected  overall  stability  in  the  long 
term, with public pension spending at around 14% 
of  GDP,  Austria  is  forecast  to  remain  among  the 
Member States with the highest pension spending 
as a share of GDP. In 2025, Austria received a CSR 
to  improve  the  fiscal  sustainability  of  its  pension 
system  by,  among  other  things,  significantly 

increase 

(Aliquotierung); 

increasing  the  effective  retirement  age.  Relevant 
recent  measures  taken  by  Austria  to  address  the 
sustainability  of  pensions  include:  (i)  the  re-
introduction  of  a  modified,  partial,  first,  annual 
pension 
the 
introduction  of  a  possibility  to  receive  a  partial 
pension (Teilpension); and (iii) raising the minimum 
age – and the years of contribution required – for 
the  most  widely  used  early  retirement  scheme 
(‘corridor  pension’).  Statutory  retirement  ages  for 
women  are  in  the  process  of  being  aligned  with 
those  for  men  at  65  years,  with  full  convergence 
by 2033. 

(ii) 

of 

uptake 

however, 

Supplementary  pension  schemes  can  make 
the  pension  system  more  resilient  by 
diversifying  retirement  income  sources.  In 
Austria, 
these 
the 
supplementary  schemes  remains  limited.  By  the 
end  of  2024,  private  pension  assets  were 
equivalent to around 7% of GDP and participation 
in  supplementary  schemes  covered  only  around 
16%  of  the  working-age  population,  well  below 
the  EU  average  (77).  This  coincides  with  rising 
medium-term  public  pension  spending  pressures 
and a projected decline in the replacement rate by 

(76)  Source: 2024 Ageing Report (EC/EPC). 

(77)  Source: OECD Pension Market in Focus 2025. The highest 

participation rate in at least one supplementary pension plan 
is reported.   

38 

Assets in 2024 (% GDP)Participation in 2024 (% working-age population)AT7.2-1.316.0ATEU32.4-2.855.9EUGross replacement rate at retirement: (pps change 2025-2040) AT28.30.20.70.5-0.31.029.3ATEU24.30.50.30.4-0.30.925.2EUAT28.3-0.41.21.4-0.21.930.2ATEU24.30.20.60.8-0.31.325.6EUageing-related expenditure change in 2025-2070 (pps GDP) due to:ageing-related expenditure pensionshealthcarelong-term careeducationtotalageing-related expenditure change in 2025-2040 (pps GDP) due to:ageing-related expenditure pensionshealthcarelong-term careeducationtotal 
 
 
 
 
     
 
 
      
 
1.3 pps between  2025  and  2040 (Table  A2.2  and 
A2.3).(78)  

to 

the 

risk 

pose 

control. 

improve 

expenditure 

long-term  care;  and 

fiscal  sustainability  of 

The projected increases in public spending on 
health and long-term  care, due  to an  ageing 
fiscal 
a 
population, 
sustainability  in  the  medium  and  long  term 
for  Austria.  In  2025,  Austria  was  recommended 
its 
to 
healthcare and long-term care systems, by, among 
other  things,  streamlining  underused  hospital 
infrastructure; (ii) improving the cost-effectiveness 
(iii) 
of  healthcare  and 
strengthening 
Public 
healthcare expenditure is projected to be  7.8% of 
GDP in 2025 (above the EU average of 6.6%) and 
is  expected  to increase  by  0.7  pps between  2025 
and 2040 and by a further 0.5 pps between 2040 
and  2070 (79).  Recent  structural  reforms  that 
focused  on  strengthening  primary-care  and 
prevention were not sufficient to address the fiscal 
sustainability  challenge  for  Austrian  healthcare. 
Regulatory measures to accompany these reforms 
could  have:  (i)  encouraged  the  uptake  of  these 
primary-care  and  preventive  services  (such  as  for 
instance  gatekeeping);  or  (ii)  ensured  that  the 
increased  availability  of  primary-care  services  did 
not  duplicate  existing  specialist  care  services  and 
capacities. 
accompanying 
measures were not put in place and the result was 
an 
in  public  spending.  One  of  the 
measures  underpinning  the  extension  of  the 
adjustment  period  in  the  Austrian  medium-term 
plan  aimed  to  improve  the  revenue  base  of 
Austria’s 
by 
increasing  the  health  insurance  contribution  rate 
for  pensioners  (from  5.1%  to  6%  as  from  June 
2025).  This  additional 
revenue  has  been 
earmarked for the next five years (2026-2031) to 
in 
balance  out  the  aforementioned 
expenditure on primary healthcare, prevention and 
mental health services. 

healthcare 

insurance 

However, 

increase 

increase 

system 

these 

Public  expenditure  on  long-term  care  is 
projected to be equivalent to 1.6% of GDP in 
2025  (slightly  below  the  EU  average  of 
1.7%) and is expected to increase by 0.5 pps 

(78)  The (gross) replacement rate refers, depending on data 

availability, to both public and private pensions. It is based 
on projections from the 2024 Ageing Report.  

(79)  Key performance characteristics, recent reforms and 

investments of the Austrian healthcare system are discussed 
in Annex 15.     

of  GDP  between  2025  and  2040  and  by  a 
further  0.9  pps  of  GDP  between  2040  and 
2070 (80).  Recent  reform  packages  in  Austria 
required  additional  public  resources  to  finance 
measures  to:  (i)  train  staff  in  the  long-term  care 
sector; (ii) improve working conditions in long-term 
care and the financial situation of informal carers; 
and  (iii)  close  the  financing  gap  caused  by  the 
abolished  asset-testing  for  residential  care.  These 
reform  measures  aimed  at  better  adequacy  and 
quality of LTC, as well as to secure an increase in 
staff  numbers,  and  are  expected  to  increase 
expenditure already driven by demographic ageing. 
This  in  turn  will  further  exacerbate  Austria’s 
existing fiscal sustainability challenge. 

National fiscal framework 

relationships  and 

The  CSRs  addressed  to  Austria  in  2025 
include  a  call  to:  (i)  simplify  and  rationalise 
fiscal 
responsibilities 
across  layers  of  government;  and  (ii)  ensure 
that  financing  and  spending  responsibilities 
are  clearly  aligned.  The  new  Austrian  Stability 
Pact, agreed in November 2025, entered into force 
retroactively  as  of  1 January 2024  in  order  to 
align the  country’s  national  fiscal  framework  with 
the  reformed  fiscal  governance  framework  of  the 
European Union. It sets out revised debt and deficit 
targets  for  Austria’s  federal,  regional  and  local 
governments,  and  introduced  monthly  reporting 
requirements  at  the  regional  level.  However,  risks 
persist due to possible inconsistencies between the 
sub-national  deficit  targets  and  net  expenditure 
ceilings set under the EU framework. Furthermore, 
concrete  changes  to  fiscal  relationships  and 
responsibilities  across  layers  of  government  and 
accountability  mechanisms  remain  limited.  As  the 
pact  builds  on  constitutional  arrangements  it 
cannot 
complex 
distribution  of  powers  and  responsibilities  across 
levels  of  government.  Discussions  on  reforming 
intergovernmental  (i.e.  between  federal,  regional 
and  local  levels  of  government)  fiscal  relations  in 
order  to  better  align  financing  and  spending 
responsibilities, including in health and social care, 
are set to continue as part of negotiations for the 

fundamentally 

alter 

the 

(80)  The adequacy and quality of the Austrian long-term care 

system are covered in Annex 12.    

39 

 
 
 
long-term  budget  forecast 

long-term budget forecast in 2022. Its 2025–
includes  an 
2060 
updated assessment of the fiscal impacts of both 
climate change and climate policies up to 2060. It 
indicates that these will have  a significant impact 
that 
on 
implementing  a  climate-activity  scenario  aligned 
with  the  government  programme  can  reduce  the 
long-term  debt-to-GDP  ratio  compared  with  the 
baseline. 

fiscal  outcomes,  and 

concludes 

of 

public 

quality 

The 
investment 
management  in  Austria  is  relatively  high. 
Austria  has  well-structured  sectoral  investment 
planning  and 
latest 
integrated  climate  and  transport  investment  plan 
(‘Master  Plan  2030’  aims  to  translate  climate 
targets into key performance indicators (KPIs). 

targets.  The 

integrated 

Graph A2.4: Investment composition, % of GDP 

next intergovernmental fiscal equalisation scheme 
(Finanzausgleich). 

Independent  fiscal  institution  (IFI)  tasks  in 
Austria  are  carried  out  by  two  institutions. 
Institute  of  Economic  Research 
The  Austrian 
(WIFO)  produces  the  macroeconomic  forecast 
underlying  the  government's  budgetary  plans, 
while  the  Austrian  Fiscal  Advisory  Council  (FISK) 
monitors compliance with fiscal rules and delivers 
forecasts,  long-term  projections  and  costing  of 
measures.  This  division  of  tasks  could  make  it 
difficult to identify a clear reference IFI in Austria. 
Both institutions seem to have sufficient resources 
for  their  current  tasks,  but  there  are  no  explicit 
mechanisms  in  place  to  ensure  stable  levels  of 
funding.  The  policy  dialogue  between  these  two 
IFIs  and  both  the  government  and  national 
parliament could be improved. Both IFI institutions 
are  present  in  the  media,  and  have  standalone 
websites,  and  standalone  social  media  presences. 
However,  an  external  evaluation  of  these  IFIs  by 
independent evaluators is either not performed (in 
the  case  of  FISK)  or  not  made  public  (in  the  case 
of the WIFO).  

conducts 

spending 

investments 

Austria 
reviews 
periodically on an ad hoc basis. Recent reviews 
in  the  green 
have  focused  on 
transition  and  digitalisation.  The  reviews’  findings 
are documented in public reports and shared with 
relevant ministries and departments. Following up 
on  the  spending  reviews  has  so  far  been 
discretionary,  and  the  insights  from  the  reviews 
are not formally linked to the budget process. 

Source: Ameco; % of GDP 

Austria  has  one  of  the  most  comprehensive 
national  frameworks  for  integrating  green 
budgeting into its budgetary decision-making 
process.  Austria  has  developed  instruments  to 
support  the  implementation  of  green  budgeting 
such  as 
impact  assessments,  green  budget 
‘tagging’  and  green  spending  reviews.  Green 
budgeting activities cover the climate-specific and 
environment-specific  impacts  of  all  budgetary, 
regulatory,  and  tax  policy  measures.  The  Ministry 
of Finance’s green budgeting unit gave impetus to 
collaboration  across  institutions  with  the  creation 
of  a  new  working  group  on  budget  measures 
harmful  to  climate  goals  and  by  encouraging 
regions and municipalities to also engage in green 
budgeting.  

Austria’s Federal Ministry of Finance started 
its 
integrating  climate-related  risks 

into 

40 

3.93523.319.621.1051015202530202410-y averages% of GDPgovernmentnon-government 
   
 
Table A2.3:  Fiscal governance database indicators and public accounting maturity 

implementation  status  of  the  set  of  reforms  and 
investments  due  in  2025  and  the  first  half  of 
2026. 

Source: Fiscal Governance Database, European Commission 

Implementation of the set of reforms 
and investments underpinning the 
extension of the adjustment period  

investments 

The CSRs for Austria also call for implementing the 
set  of  reforms  and  investments  underpinning  the 
extension  of  the  adjustment  period.  This  set  of 
reforms  and 
is  composed  of 
commitments  from  the  recovery  and  resilience 
plan  (RRP),  commitments  extending  previously 
existing RRP measures, as well as some additional 
commitments on reforms and investments. Taking 
into  account  the  information  provided  in  the 
Annual  Progress  Report,  Table  A2.4  shows  the 

41 

2024AustriaEU AverageCountry Fiscal Rule Strength Index (C-FRSI)13.4814.81Medium-Term Budgetary Framework Index (MTBFI)0.600.722025 Public accounting maturity of general government73%65%Fiscal Governance Database IndicatorsThe Country Fiscal Rule Strength Index (C-FRSI) shows the strength of national fiscal rules aggregated at the country level based on i) the legal base, ii) how binding the rule is, iii) monitoring bodies, iv) correction mechanisms, and v) resilience to shocks. The Medium-Term Budgetary Framework Index (MTBFI) shows the strength of the national MTBF based on i) coverage of the targets/ceilings included in the national medium-term fiscal plans; ii) connectedness between these targets/ceilings and the annual budgets; iii) involvement of the national parliament in the preparation of the plans; iv) involvement of independent fiscal institutions in their preparation; and v) their level of detail. A higher score is associated with higher rule and MTBF strength. The score for public accounting reflects the degree of maturity in relation to the International Public Sector Accounting Standards (IPSAS). Countries with an accounting maturity of 70% or more in relation to IPSAS are deemed to apply accrual accounting. For more information, see the report on public accounting in the EU (COM(2025)746 and accompanying Staff Working Document SWD(2025)396). 
 
   
 
Table A2.4:  Reforms and Investments underpinning the extension of the adjustment period for Austria 

Source: Commission’s assessment taking into account Austria’s Annual Progress Report 

42 

MeasuresKey stepsRecommended implementation dateCOM assessment 2026Step 1: Implementation of milestone 91a under the RRP Q4 2025Completed*Step 2: Attribution of fundingQ1 2026CompletedIncrease in health insurance contribution rate for pensionersImplementation of the law Q3 2025CompletedFirst pensions increase (‘Aliquotierung’)Implementation of the law Q1 2026Completed*Increase in effective retirement age (‘Corridor pension’)Step 1: Adoption of the law Q3 2025Completed*Early childhood education and careStep 1: Allocation of additional funding for Länder (federal states) from federal budget Q1 2026CompletedStep 1: Adoption of the lawQ1 2026CompletedStep 2: Implementation of the lawQ2 2026CompletedReform of unemployment benefitsImplementation of the lawQ1 2026CompletedLottery taxImplementation of the law (budget accompanying law)Q1 2026CompletedConcession and lottery tax for electronic lotteriesImplementation of the law (budget accompanying law) Q1 2026CompletedReal estate taxation share dealsImplementation of the law (budget accompanying law) Q1 2026CompletedReal estate taxation upzoning gainsImplementation of the law (budget accompanying law) Q1 2026CompletedFoundation donation taxImplementation of the law (budget accompanying law) Q1 2026CompletedEducation (‘Opportunity bonus’)Labour market – educational leaveNote: The progress of each backward-looking key step (i.e., those scheduled for completion by 30 April 2026) is either classified as ‘completed’ or factual information is provided. The status of forward-looking key steps does not appear in the table, as these will be assessed by the Commission in future Country Reports.*These key steps correspond to milestones 91a,  153 and 155a of Austria’s RRP, which have been assessed as fulfilled as part of a payment request under the RRF.   
 
     
 
ANNEX 3: TAXATION 

This  annex  provides  an 
indicator-based 
overview  of  Austria’s  tax  system.  It  includes 
information  on  the  tax  mix,  on  competitiveness 
and fairness aspects of the tax system, and on tax 
collection and compliance. In the area of taxation, 
the 2025 country-specific recommendations (CSR) 
for Austria highlighted challenges in improving its 
tax  mix  to  reduce  the  high  tax  wedge  on  labour 
and supporting inclusive and sustainable growth in 
a challenging fiscal environment.  

labour  taxation 

Austria has relatively high tax revenues as a 
percentage  of  GDP.  In  2024,  total  tax  revenues 
amounted to  43.4%  of GDP  compared  to  the  EU-
27  average  of  39.4%.  The  Austrian  tax  mix  relies 
strongly  on 
(including  social 
security contributions), representing 56.1% of total 
tax  revenue  in  2024  (compared  to  51.5%  in  the 
EU).  Consumption  taxes  represented  25.8%  of 
total  (vs  EU  average  of  26.8%)  and  capital  taxes 
18.1%  (vs.  EU  average  of  21.6%).  Looking  into 
specific  tax  types,  VAT  revenue  amounted  to 
18.2% of total tax revenue in 2024, roughly in line 
with the EU average (18.0%).  

The  tax  mix  could  be  improved.  Given  the 
strong reliance on labour taxation, Austria received 
in 2025 a CSR to improve its tax mix to reduce the 
high tax wedge on labour and to support inclusive 
and  sustainable  growth  in  a  challenging  fiscal 
environment. 

Graph A3.1: Tax revenue by economic function in 
2024, AT (outer ring) and EU-27 (inner ring) 

Source: Taxation Trends Data, DG TAXUD. 

Austria  continues  to  rely  heavily  on  labour 
taxation,  comparatively  underusing  more 
In  particular, 
growth-friendly 
recurrent  taxes  on  immovable  property,  including 
land,  buildings  and  other  immovable  structures, 
account  for  only  0.4%  of  total  tax  revenues  in 
2024,  compared  to  an  EU  average  of  2.4%  (see 

tax  bases. 

43 

Graph A3.2). Given that recurrent property taxation 
is generally considered among the least distortive 
forms  of  taxation,  this  suggests  scope  for 
rebalancing.  The  effectiveness  and  fairness  of 
recurrent  property  taxes  depend,  however,  on  tax 
bases reflecting current market values. In Austria, 
property  taxation  still  largely  relies  on  cadastral 
values  last  comprehensively  updated  in  1973, 
which weakens the link between tax liabilities and 
actual  property  values.  Similarly,  revenues  from 
environmental taxes remain below the EU average 
(4.4%  vs  5.3%  of  total  tax  revenues  in  2024), 
despite the introduction of national carbon pricing.  

Graph A3.2: Property tax revenues as % of total 
tax revenues 

Source: Taxation Trends Data, DG TAXUD. 

At the same time, some recent tax measures 
point  toward  a  gradual  diversification  of 
revenue  sources.  Noteworthy  developments  in 
Austria’s  medium-term 
fiscal-structural  plan 
include  the  adjustment  and  extension  of  tobacco 
taxation  to  cover  new  alternative  products  and 
increases  in  sports  betting  fees.  These  measures 
broaden  the  tax  base  and  strengthen  taxation  of 
consumption-related 
thereby 
contributing,  albeit  to  a  limited  extent,  to  a 
rebalancing  of  the  tax  mix  away  from  labour. 
Overall, however, the composition of tax revenues 
continues 
for  a  more 
indicate  scope 
comprehensive  shift  toward  tax  bases  that  are 
typically  seen  as  more  supportive  of  sustainable 
growth. 

activities, 

to 

Company  profits  in  Austria  are  taxed  at  the 
standard  corporate  income  tax  (CIT)  rate  of 

51.526.821.656.125.818.1Taxes on labourTaxes on consumptionTaxes on capital0.01.02.03.04.05.06.0AT'19EU'19AT'20EU'20AT'21EU'21AT'22EU'22AT'23EU'23AT'24EU'24Recurrent property tax ATOther property tax ATRecurrent property tax EUOther property tax EU 
 
   
  
 
 
Table A3.1:  Taxation Indicators 

(1) Forward-looking effective tax rate (KPMG). 
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average. 
(**) Forecast value for 2024. EU-27 refers to the median value. For more data on tax revenues as well as the methodology 
applied, see the Data on Taxation Trends webpage. 
Source: European Commission, OECD, ISORA. 

in 

the 

investment 

23%.  The  forward-looking  effective  CIT  rate  has 
been on a gradual downward trend in recent years, 
declining  from  22.7%  in  2022  to  21.8%  in  2023 
and 20.9% in 2024  – around 2 percentage points 
above  the  EU  average.  In  addition,  a  temporary 
increase 
tax  allowance 
(Investitionsfreibetrag)  applies  from  November 
2025 through 2026, raising the deduction rate for 
eligible  capital  expenditures  from  10%  (15%  for 
eco-investments) 
for  eco-
to  20% 
investments).  By  lowering  the  corporate  tax  base 
for  firms  undertaking  investment,  this  measure 
provides  targeted  CIT-related  support,  particularly 
for  environmentally  oriented  capital  formation. 
More  broadly,  the  corporate  tax  system  also 
the 
includes  R&D-related 
Forschungsprämie,  which  provides  a  refundable 
tax credit of 14% of eligible R&D expenditure and 
is  available  irrespective  of  firms’  profitability, 
thereby  supporting  innovation  and  investment  in 
knowledge-based activities. 

incentives,  notably 

(22% 

for various income groups, including single persons 
earning the average wage (100%) as well as those 
earning  50%,  67%  and  167%  of  the  average 
wage  (see  Graph A3.2).  For  a  single  individual 
without children at the income level of the average 
worker,  Austria  had  the  sixth  highest  labour  tax 
wedge  in  the  EU-27  in  2025,  highlighting  the 
comparatively strong tax burden on labour. Second 
earners earning 67% of the average wage, whose 
spouses earn the average wage, face a tax wedge 
higher  than  the  EU  average,  although  they  are 
taxed  only  slightly  higher  than  single  persons  at 
the same wage level.  

Overall,  the  tax-benefit  system  is  effective 
in reducing income inequality. In 2024, it led to 
a  reduction  of  the  Gini  coefficient  by  8.4 pps, 
whereas  the  EU  average  reduction  was  at 

Austria’s labour tax burden is relatively high 
at various wage levels. In 2025, the labour tax 
wedge (81) was substantially above the EU average 

(81)  The  tax  wedge  is  an  indicator  of  the  tax  burden  on  labour 
that  can  be  assessed  at  various  levels  of  earnings.  It  is 
defined as the sum of personal income taxes, employee and 
employer  social-security  contributions  and  other  mandatory 

security 

contributions,  expressed  as  a  percentage  of  total  labour 
costs  (composed  of  the  net  wage,  personal  income  tax, 
social 
contributions,  and  other  mandatory 
contributions).  Tax  wedge  data  in  the  2026  country  reports 
are calculated by the Joint Research Centre of the European 
Commission and based on the EUROMOD model, but in past 
reports they were based on the OECD tax and benefit model. 
While the underlying methodology is very similar, differences 
in  the  assumptions  can  lead  to  different  results  between 
both models. 

44 

2019202220232024202520192022202320242025Tax structureTotal taxes (including compulsory actual social contributions) (% of GDP)43.043.042.643.439.939.739.039.4Taxes on labour (% of GDP)23.722.923.324.420.620.119.920.3of which, social security contributions (SSC, % of GDP)15.014.814.915.613.012.712.713.0Taxes on consumption (% of GDP)11.611.211.311.211.210.910.510.6of which, value added taxes (VAT, % of GDP)7.77.97.97.97.17.47.17.1Taxes on capital (% of GDP)7.78.98.17.88.18.78.58.5Personal income taxes (PIT, % of GDP)9.79.79.49.99.69.49.39.6Corporate income taxes (CIT, % of GDP)2.83.53.33.12.63.23.23.1Total property taxes (% of GDP)0.80.80.60.52.22.11.91.8Recurrent taxes on immovable property (% of GDP)0.20.20.20.21.21.00.90.9Environmental taxes (% of GDP)2.41.92.01.92.62.12.12.1Effective carbon rate in EUR per tonne of CO2 equivalentsnana89.9nanana84.8naTax wedge at 50% of average wage (single person) (*)35.431.633.533.233.132.431.631.531.531.6Tax wedge at 100% of average wage (single person) (*)45.345.044.444.244.240.139.739.939.940.0Corporate income tax - effective average tax rates (1) (*)23.022.721.820.920.019.219.019.3Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)9.79.59.08.47.88.07.97.8Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)7.58.26.7na31.832.630.7naVAT gap (% of VAT total tax liability, VTTL) (**)6.83.01.00.610.57.38.2naEU-27AustriaProgressivity & fairnessTax administration & complianceBy tax baseSome tax types 
 
 
 
 
   
 
7.8 pps (82).  Austria  counteracts  fiscal  drag  with 
inflation-based indexation of tax brackets (thereby 
compensating  for  two  thirds  of  the  impact  of  the 
bracket creep, with targeted transfers covering the 
remaining  third).  However,  the  full  indexation  via 
the  remaining  third  has  been  suspended  until 
2029.  Additionally, 
indexing  for  many  family 
benefits  (such  as  the  family  allowance  and  child 
tax  credit)  has  been  suspended  for  2026  and 
2027. 

Graph A3.3: Tax wedge for single and second 
earners as % of total labour costs, 2025 

Some  tax  expenditures  may  also  have 
implications  for  greenhouse  gas  emissions, 
particularly  in  the  transport  sector.  Certain 
provisions  of  the  tax  system 
(such  as  the 
Pendlerpauschale  commuting-related  tax  relief 
and  the  Dieselprivileg  preferential  taxation  of 
diesel  compared  to  petrol)  can  indirectly  support 
fossil-fuel  consumption  by  lowering  the  effective 
cost  of  carbon-intensive  mobility.  While  these 
measures pursue distributional or competitiveness 
objectives,  their  environmental  impact  may  run 
counter to decarbonisation goals. A comprehensive 
review  of  tax  expenditures  could  therefore  also 
help  assess  the  consistency  of  existing  tax 
incentives  with  climate  objectives  and  identify 
opportunities  to  better  align  the  tax  system  with 
emission  reduction  targets  while  safeguarding 
social considerations. 

Note: The second earner tax wedge shows a household’s tax 
wedge resulting from the wage that a second earner taking 
up a job at 67% of the average wage receives. It does not 
show the total tax wedge of the household. The household is 
assumed to have a first earner at 100% of the average wage 
and no children. For the methodology of the tax wedge for 
second earners, see OECD (2024), Taxing Wages 2024. 
Source: European Commission 

Tax expenditures in Austria are sizeable and 
have been increasing in recent years. In 2023, 
they amounted to EUR 25.5 billion, or around 5.2% 
of  GDP  (an  increase  of  8.6%  compared  to  2022). 
Notably,  close  to  one  third  of  tax  expenditures 
could not be quantified, limiting transparency and 
fiscal oversight. In a context of relatively high tax 
code  complexity  and  tight  fiscal  space,  a  more 
systematic  evaluation  of  tax  expenditures  could 
help  identify  measures  that  no  longer  effectively 
improve 
achieve 
efficiency and support efforts to rebalance the tax 
mix in line with the relevant CSR. 

intended  objectives, 

their 

(82)  The  Gini  coefficient  measures  the  extent  to  which  the 
distribution  of  income  within  a  country  deviates  from  a 
perfectly  equal  distribution.  A  coefficient  of  0  expresses 
perfect equality where everyone has the same income, while 
a coefficient of 100 expresses full inequality where only one 
person has all the income. 

regularly  estimates 

Austria’s  efforts  to  monitor  tax  compliance 
gaps  currently  focus  primarily  on  VAT (83). 
While  Austria 
the  VAT 
compliance  gap,  it  does  not  at  present  produce 
comparable  gap  estimates  for  corporate  income 
tax  (CIT)  or  personal  income  tax  (PIT).  Developing 
CIT and PIT compliance gap  estimates would help 
policymakers  better  understand  the  scale  and  the 
drivers  of  non-compliance  in  these  areas  and 
strengthen 
targeted 
enforcement  and  policy  design.  More  systematic 
measurement  and monitoring  of  compliance  gaps 
across  major  taxes  could  also  improve  the  tax 
administration’s ability to assess the effectiveness 
of 
improve  overall  revenue 
performance. 

the  evidence  base 

its  actions  and 

for 

Austria  performs  strongly  in  tax  collection. 
The  VAT  compliance  gap  is  very low  and  declined 
further  to  0.6%  of  VAT  total  tax  liability  in  2024, 
down  from  1.0%  in  2023  and  significantly  below 
its 2019 level (6.8%). Austria’s shadow economy is 
among the smallest in the EU,  estimated at 6.6% 
of  GDP.  Outstanding  tax  arrears  have  remained 
relatively stable, amounting to 6.7% in 2023, well 
below  the  EU  average  of  30.7%.  In  addition,  on-
time  payment  rates  are  close  to  100%  across 
major tax categories (CIT, PIT and VAT), indicating 
a high level of compliance. 

Austria  has  also  made  progress 
digitalising 

in 
administration. 

tax 

its 

(83)  European Commission, Directorate-General for Taxation and 

Customs Union, Mind the gap - 2025 report. 

45 

33.138.744.249.239.6202530354045505550100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - ATSingle earner - EU averageSecond earner -  ATSecond earner -  EU average 
   
 
 
the 

resilience 

recovery  and 

Digitalisation  measures  have  been  implemented 
plan, 
under 
strengthening  administrative  efficiency.  The  tax 
administration  pre-fills  personal 
tax 
returns,  and  the  share  of  PIT  returns  submitted 
electronically  has  increased  significantly  in  recent 
years,  contributing  to  improved  compliance  and 
reduced administrative burden. 

income 

46 

 
PRODUCTIVITY 
ANNEX 4: INNOVATION TO BUSINESS  

and 

innovation 

Austria  remains  a  strong  innovator,  but  its 
solid  innovation  capacity  and  high  level  of 
R&D  investment  do  not  fully  translate  into 
business 
high-impact 
dynamism. According to the European Innovation 
Scoreboard  2025 (84),  Austria  achieves  114%  of 
the EU average on the Summary Innovation Index 
but has progressed more slowly than the EU since 
2018.  Austria’s  R&D  intensity  increased  from 
3.11% in 2018 to 3.26% of GDP in 2024, placing 
the  country  among  the  top  three  EU  Member 
States and well above the EU average of 2.24% in 
2024.  Despite 
the 
translation  of  high  R&D  spending  into  disruptive 
innovation  and  marketable  products  remains 
limited.  

this  strong  performance, 

Austria  shows  solid  performance  in  the 
digitalisation of businesses, with SME digital 
intensity  above  the  EU  average  and  strong 
uptake  of  artificial  intelligence,  progressing 
well  towards Digital Decade 2030  targets  in 
these  areas.  By  contrast,  adoption  of  cloud 
services  and  data  analytics  remains  below  EU 
levels,  indicating  limited  targeted  funding  and 
uneven  diffusion  of  data-driven  technologies 
across  firms.  This  challenge  is  identified  in  the 
2025  country-specific 
(CSR) 
calling for stepping up the use of advanced digital 
technologies by companies.  

recommendation 

At  the  same  time,  Austria  shows  limited 
business  dynamism,  reflected  in  firm  entry 
and exit rates (85) and a share of high-growth 
enterprises  below  the  EU  average.  This  is 
highlighted 
in  the  2025  CSR  on  promoting 
business dynamism, and the creation of growth of 
young companies. This is coupled with a relatively 
small venture capital market, which weighs on the 
development  of  a  more  vibrant  ecosystem  of 
innovative firms. This challenge was also noted in 
the  2025  CSR  on  providing  better  access  to 

(84)  European Commission, 2025, European Innovation 

Scoreboard, country profile Austria: 
https://ec.europa.eu/assets/rtd/eis/2025/ec_rtd_eis-country-
profile-at.pdf The scoreboard provides a comparative 
analysis of innovation performance in EU countries, including 
the relative strengths and weaknesses of their national 
innovation systems (also compared with the EU average). 
Strong Innovators are countries with performance between 
100 and 125% of the EU average. 

venture  and  growth  capital  and  removing  barriers 
hindering investment from institutional investors in 
equity instruments. 

Excellent science 

Austria  has  a  solid  research  base,  but 
scientific  excellence  has  been  on  a  slightly 
weakening trend despite continued increases 
in  public  R&D investment.  Public  R&D  intensity 
increased  from  0.85%  in  2013  to  1.0%  in  2024, 
making it the third highest in the EU. However, key 
indicators  of  scientific  excellence  have  slightly 
deteriorated over time.  

Austria’s  share  of  publications  within  the 
world’s 
top  10%  most-cited  scientific 
publications  has  been  on  a  downward  trend 
since 2017. The figure  has now fallen to  9.95%, 
only slightly above the EU average of 9.44%  (see 
Graph  A4.1).  On  this  indicator,  Austria  performs 
below other innovation leaders, including Denmark, 
Finland, the Netherlands and Sweden.  

Austria’s universities are starting to catch up 
but  still  lag  behind  in  major  global  rankings 
of  universities (86).  In  this  context,  the  Strategy 
for  Research,  Technology  and  Innovation  (RTI 
Strategy  2030) (87)  aims  to  strengthen  research 
excellence,  with  the  strategic  objective  of  having 
two  Austrian  universities  among  the  global  top 
100  in  the  Times  Higher  Education  ranking.  The 
excellent=austria initiative of the Austrian Science 
Fund represents a step in this direction. It supports 
research, 
large-scale  and  competitive  basic 
including  high-risk  and  high-gain  projects  under 
the  Emerging  Fields  and  Clusters  of  Excellence 
programmes.  These  initiatives  aim  to  strengthen 
the foundations for long-term scientific excellence. 
Given  the  current  budgetary  constraints,  ensuring 
greater  efficiency  and  impact  of  public  research 
and  innovation  (R&I)  spending  remains  a  key 

(86)  In the Times Higher Education World University Rankings 

2026, only one Austrian University (University of Vienna, 95) 
is ranked among the 100 best universities worldwide. 

(87)  The strategy sets out the objectives and fields of activity of 

(85)  OECD, July 2024, OECD Economic Surveys Austria. 

Austrian RTI policy for the coming decade. 

47 

 
 
 
 
 
 
 
priority 
outcomes. 

for 

improving 

research 

excellence 

Graph A4.1: Share of publications in the top 10% 
most-cited publications worldwide, 2012 and 
2022 

Source: Science-Metrix data using the Scopus database. 

of 

the 

share 

Austria’s public science base is characterised 
by a high degree of international integration. 
Austrian  universities  and  research  institutions  are 
deeply  embedded  in  European  and  international 
research  networks.  Research  collaborations  are 
strong,  with 
international 
total 
co-publications  as  a  percentage  of 
publications  exceeding  that  of  innovation  leaders 
and  continuing  to  increase (88).  This  high  level  of 
international  openness  makes  Austria  more 
attractive for international researchers and talents. 
In  2025,  this  orientation  was  supported  by  the 
launch  of  the  APART-USA  fellowship  by  the 
Austrian Academy of Sciences, aimed at attracting 
excellent  researchers  from  the  United  States  and 
further strengthening international research links. 

Austria’s  research  and  innovation  policy  is 
guided  by  the  RTI  Strategy  2030,  which 
provides  a  coherent  long-term  framework 
with  clear  strategic  objectives.  The  strategy 
is implemented through three-year RTI pacts. 
At  mid-term  (2025),  evaluation  evidence  shows 
that  at  current  trends  about  half  of  the  strategy 
targets  will  be  reached  by  2030,  suggesting  that 
further  efforts  are  needed (89).  In  February  2026, 
the government adopted the third RTI pact for the 
period 2027-2029, with a total funding of around 
EUR  5.5  billion,  slightly  higher  than  the  EUR 5.05 

(88)  Austria had the fourth-highest share of international 

scientific co-publications among EU Member States in 2024. 
Source: Scopus database. 

(89)  Austrian Institute of Economic Research (WIFO) and Austrian 
Institute of Technology (AIT), 2025, Mid-term evaluation of 
the RTI Strategy 2030. 

billion  allocated  for  2024-2026.  Around  EUR 3 
billion  is  allocated  to  basic  research,  reflecting 
increased emphasis on strengthening the scientific 
base.  At  the  same  time,  funding  for  applied 
research  is  expected  to  slightly  decline  compared 
with  the  previous  pact.  The  pact  supports  key 
technologies,  knowledge  transfer  and  business 
innovation through funding for major research and 
innovation  organisations.  It  also  contributes  to 
Austria’s  objective  of  raising  R&D  intensity  to  4% 
of  GDP  by  2030 (90).  As  noted  by  the  Austrian 
Council  for  Sciences,  Technology  and  Innovation, 
there  is  a  scope  to  further  strengthen  cross-
departmental  and  cross-ministerial  cooperation 
and  to  streamline  the  still  fragmented  landscape 
of  programmes  and  supporting 
instruments. 
Clarifying  the  implementation  responsibilities  of 
the  different  RTI  actors  and  setting  clear 
milestones  could  help  increase  the  effectiveness 
and impact of research and innovation policy (91). 

Business innovation 

into 

fully 

translate 

Austria’s  high  level  of  R&D  investment  does 
not 
high-impact 
innovation  outputs  compared  with  other  R&I 
leaders. Business R&D intensity reached 2.25% of 
GDP in 2024, well above the EU average of 1.49%. 
However,  business  R&D  expenditure 
remains 
in  medium-  and 
predominantly  concentrated 
medium-high-tech  sectors  such  as  mechanical 
engineering,  metalworking 
electrical 
industries. Austria is characterised by a strong role 
for  large  and  foreign-controlled  firms  in  R&D 
activities (92).  While 
reflects  Austria’s 
this 
attractiveness  as  a  research  location  and  its 
integration  into  global  value  chains,  it  also  points 
to  a  concentration  of  R&D  activities  and  limited 
diversification across different technological fields, 
particularly  in  emerging  technologies.  Despite  the 
strong involvement of firms in research, borne out 
by  a  share  of  researchers  employed  in  the 
business  sector  higher  than  the  EU  average  and 

and 

(90)  Austrian federal government, 2026, ‘Bundesregierung 
beschließt FTI-Pakt für die Jahre 2027 bis 2029’, 
24 February 2026. 

(91)  Austrian Council for Research and Technology Development 
(FORWIT), 2025, Recommendation for the preparation of the 
FTI Pact 2027-29. 

(92)  Austrian Research and Technology Report, 2025. 

48 

0246810121416%2022 (citation window: 2022-2024)2012 (citation window: 2012-2014) 
     
 
 
translating 

technological  capabilities 

increasing  over  time,  structural  challenges  persist 
into 
in 
innovation  outcomes.  This  is  highlighted  in  the 
2025  CSR  on  the  need  to  improve  the  translation 
of  the  high 
into 
marketable solutions. 

levels  of  R&D 

investment 

innovation 

investment (93). 

Overall,  Austria  generates  comparatively 
fewer innovation outputs relative to its level 
of 
Patenting 
activity,  measured  by  Patent  Cooperation  Treaty 
patent applications per billion GDP, remains above 
the  EU  average.  However,  the  figure  has  steadily 
declined over the past decade, from 4.6 in 2013 to 
3.5  in  2022.  Austria  demonstrates  strengths  in 
several  key  technology  areas  such  as  advanced 
technology  and 
manufacturing,  environmental 
quantum, supported for instance through the RRF-
backed  Quantum  Austria-initiative,  implemented 
by  the  FWF  and  the  FFG  (94).  Nevertheless,  some 
in  the  development  of  digital 
gaps  remain 
technologies,  including  AI  and  big  data  (see 
Graph A4.2) (95).  Broadening  and  strengthening 
R&D  capabilities  in  critical  technologies  would  be 
necessary  to  foster  high-impact  innovation  and 
improve sustainability and competitiveness. In this 
context, 
Industrial  Strategy  2035  was 
announced  in  January  2026,  allocating  EUR 2.6 
billion  over  2026-2029  to  nine  key  technologies 
including  AI,  advanced materials  and life  sciences 
and  biotech,  particularly  through  additional  grant-
based  support  and targeted  funding programmes. 
The  strategy  could  help  address  these  gaps  and 
strengthen R&D capabilities in critical technologies. 
This  is  complemented  by  the  AI  Factory  Austria 
launched  in  2025,  which  provides  access  to  a 
high-performance computer, with support from EU 
funding under EuroHPC. 

the 

Graph A4.2: Patent Cooperation Treaty patents per 
EUR billion GDP in key emerging technologies, 
2020-2022 (Austria vs EU-27) 

Source: PATSTAT, European Patent Office database, extracted 
by Fraunhofer, Eurostat for GDP 

Uptake  of  digital  technologies  by  firms  is 
increasing,  but 
the  adoption  of  more 
advanced digital technologies remains below 
EU levels. Austria performs above the EU average 
in the share of SMEs with at least a basic level of 
digital intensity (72.99% vs 71.39% in 2025) and 
in  AI  adoption  by  enterprises  (29.95%  vs  19.95% 
EU  average).  In  contrast,  cloud  uptake  remains 
below the EU average (41.70% vs 46.69%), while 
the use of data analytics also lags behind (26.34% 
vs  39.85%),  pointing  to  a  gap  persisting  in  data-
driven  business  transformation.  To  support  wider 
adoption of advanced digital  technologies, Austria 
continues  to  rely  on  established  instruments  that 
are  being  scaled  up  or  put  into  operation.  Of 
particular  note  are  the  SME.DIGITAL  programme 
and  the  network  of  European  Digital  Innovation 
Hubs, which provide advisory services, training and 
digital 
investment 
transformation. Austria is also advancing its data-
through 
innovation  agenda 
driven 
the  data 
strategy 
related  measures 
for  Austria  and 
supporting the data economy. 

support 

SMEs’ 

for 

(93)  In the Global Innovation Index 2025, Austria ranks 17th in 
innovation input but 21st in innovation output. The index 
points to growth in patenting activity slowing down despite 
sustained R&D investments. 

(94)  https://www.bundeskanzleramt.gv.at/eu-

aufbauplan/projekte/quantum-austria.html.  

(95)  Austrian Research and Technology Report, 2025. 

role 

in  Austria’s 

Total  public  support  for  business  R&D  has 
increased over the past decade and plays an 
innovation 
important 
system,  notably through  R&D  tax  incentives. 
Austria  has  one  of  the  highest  levels  of  R&D  tax 
incentives  as  a  share  of  GDP  in  the  EU,  ranking 
fourth  overall.  In  December  2025 (96),  Austria 
amended  the  Research  Premium  Ordinance  to 

(96)  Austrian Federal Ministry of Finance, 2026, Information on 

changes to the research premium following the amendment 
of the Research Premium Ordinance (FoPV), BGBl. II No. 
302/2025, Information note, 23 January 2026. 

49 

0.000.050.100.150.200.25AdvancedManufacturingand RoboticsAdvancedMaterials andNanotechnologyMicro- andNanoelectronicsand PhotonicsLife ScienceTechnologiesArtificialIntelligenceSecurity andConnectivityATEU27 
 
     
 
intended 

to  clarify 

clarify  eligibility  and  calculation  rules,  aligning 
eligible  costs  more  closely  with  tax  accounting, 
introducing  new  correction  mechanisms  for  direct 
investments,  and  narrowing  the  scope  of  certain 
eligible  R&D  activities,  particularly  those  closer  to 
research 
commercialisation.  A  complementary 
premium  guideline, 
the 
interpretation  of  eligible  R&D  activities,  is  still 
under  preparation  and  has  not  yet  been  adopted. 
These  changes  primarily  improve  legal  certainty 
and  the  consistency  of  the  scheme,  but  their 
practical  impact  on  the  overall  incentive  structure 
for  business  R&D  investment  remains  to  be  seen 
and  will  depend  on  the  final  implementation 
framework.  While  the  strong  R&D  public  support 
has contributed  to stimulating private investment, 
it  tends  to  favour  incremental  innovation  in  well-
established medium- and medium-high technology 
sectors.  Gaps 
in  fostering 
breakthrough innovation  and  supporting  emerging 
technological  fields.  The  continued  reliance  on 
to 
established 
opportunities 
for 
disruptive  technologies  and  the  scaling-up  of 
innovation.  In  this  context,  a  more  systematic 
review  of  existing  support  schemes  could  help 
increase  the  efficiency  and  impact  of  public 
support for innovation (97). 

industrial 
points 
sectors 
for  strengthening  support 

therefore 

remain 

is  not 

the  high 

marketable 

translation  of 
into 

collaboration,  but 
translated 

Austria  benefits  from  a  well-functioning 
this 
science-business 
fully 
into 
potential 
breakthrough 
marketable 
innovation, 
solutions  and  business  dynamism.  This  is 
reflected in the 2025 CSR on the need to improve 
levels  of  R&D 
the 
investment 
solutions. 
Collaboration  intensity  is  high,  as  shown  by  the 
share  of  public-private  co-publications,  which  at 
15.9% of total scientific publications is well above 
the EU average of 7.6%, placing Austria first in the 
EU.  However,  strong  collaboration  does  not  yet 
sufficiently translate into commercially successful 
breakthrough  innovations.  Recently,  Austria  has 
put  in  place  several  instruments  to  strengthen 
knowledge  transfer  and  commercialisation.  The 
Competence  Centres  for  Excellent  Technologies 
strategic 
(COMET) 
technologies  and  fosters  collaboration  between 
SMEs,  large  firms  and  research  organisations, 

programme 

supports 

(97)  Austrian Institute of Economic Research (WIFO) and Austrian 
Institute of Technology (AIT), 2025, Mid-term evaluation of 
the RTI Strategy 2030. 

50 

results. 

In  addition, 

enabling  the  transfer  of  research  results  into 
applied  projects  and  prototypes.  As  announced  in 
the  Industrial  Strategy  2035,  the  COMET  centres 
will  in  future  be  more  strongly  oriented  towards 
the  exploitation,  implementation  and  scaling  of 
the  spin-off 
research 
fellowship  programme  of  the  Federal  Ministry  of 
Women,  Science  and  Research,  as  well  the  ‘Spin-
off Initiative’ of the Austrian Federal Development 
and  Financing  Bank  (aws),  launched  in  September 
2024, 
the 
further 
commercialisation  of  publicly  funded  research. 
the 
This  will  be  achieved  by  supporting 
establishment  of  spin-off  hubs  at  universities, 
covering  part  of  the  operational  costs  in  the 
start-up  phase  and  facilitating  access  to  private 
venture capital for research-based start-ups. As of 
2025,  the  target  for  economically  successful 
academic  spin-offs  set  out  in  the  RTI  Strategy 
2030  has  been  achieved,  indicating  progress  in 
strengthening research commercialisation (98). 

strengthen 

aim 

to 

Entrepreneurial dynamism 

role 

important 

Overall  business  dynamism  is  weak,  even  if 
in 
start-ups  play  an 
supporting  Austria’s  competitiveness  and 
innovation  capacity.  As  reflected  in  the  2025 
recommendation on the need to promote business 
dynamism  and  the  creation  and  growth  of  young 
companies,  business  dynamism  is  overall  weak, 
with  firm  entry  and  exit  rates  and  the  share  of 
high-growth companies below the EU average: this 
hinders  the  renewal  of  the  Austrian  economic 
fabric (99).  However,  Austria’s  start-up  ecosystem 
exhibits some strengths. According to the Austrian 
Startup  Monitor  2024,  the  number  of  newly 
created start-ups has stabilised at around 370 per 
year (100).  Austria’s 
is 

ecosystem 

start-up 

(98)  Austrian Institute of Economic Research (WIFO) and Austrian 
Institute of Technology (AIT), 2025, Mid-term evaluation of 
the RTI Strategy 2030. 

(99)  According to Eurostat, the share of high-growth enterprises 

measured in employment was 0.59% in Austria in 2023, well 
below the EU average of 0.87%. The birth and death rates of 
business are 6.23% and 5.08% respectively, well below the 
EU averages of 10.46% and 8.51% in 2023. 

(100) There is no common international definition for start-ups. 

Austrian Startup Monitor defines start-ups as companies that 
are less than 10 years old; which offer innovative products, 
services, technologies or business models; or that show or 
aim for significant growth in revenue and or time size. ‘Deep 

 
 
 
 
characterised  by  strong  emphasis  on  research-
based  and  academic  spin-offs.  Around  one  in  six 
newly  founded  start-ups  operates  in  deep  tech 
fields,  reflecting  the  close  links  between  the 
start-up  ecosystem  and  the  country’s  research 
base.  Overall,  the  survival  rate  of  Austrian 
start-ups  remains  relatively  high  compared  with 
peers, and start-ups display a strong international 
orientation  from  an  early  stage.  Recognising  the 
importance  of  start-ups  for  economic  dynamism, 
the  Startup  Council  established  in  2022  brings 
together 
start-up 
from 
ecosystem  to  advise  on  the  development  and 
implementation  of  start-up-related  measures  and 
on  improving  framework  conditions.  Young  people 
in  Austria  show  a  medium-level  knowledge  of 
financial literacy (101). The 2021 National Financial 
Literacy  Strategy  consolidated  earlier  efforts  to 
introduce  and  strengthen  financial  literacy  in  all 
types of schools, through inclusion in curricula and 
adult learning (102). 

Austria’s 

experts 

ownership 

Regulatory barriers persist, although several 
initiatives  have  been  recently  introduced  to 
reduce them. Since 2024, a new flexible company 
form,  ‘Flexible  Kapitalfesellschaft’  (FlexCo),  has 
been introduced. This offers founders of start-ups 
issuing  shares  and 
a  simplified  process  for 
5). 
Annex 
(see 
structuring 
Administrative 
in 
particular 
in 
accessing  public  funding,  is  perceived  by  some 
start-ups  as  a  significant  obstacle (103).  Easier 
access  to  public  procurement  could  make  a 
significant  contribution  to  the  market  introduction 
of  innovative  solutions.  For  young  and  innovative 
companies  in  particular,  public  procurement  can 
represent  an  important  first  market  opportunity. 
An  opportunity  that  one  in  three  young  and 
innovative companies in Austria is actively seeking. 

complexity, 

Limited  availability  of  risk  capital  continues 
to  constrain  the  scaling-up  of  Austrian 
start-ups. 
2025 
reflected 
recommendation  on  the  need  to  provide  better 
access to venture and growth capital and removing 

the 

on 

As 

barriers  hindering  investment  from  institutional 
investors  in  equity  instruments,  Austria’s  venture 
capital market remains relatively small (0.029% of 
GDP  vs  EU  0.063%  in  2024),  a  level  well  below 
those observed in leading EU countries. Investment 
activity  has  declined  in  recent  years,  reflecting 
lower  participation  by  international  investors  and 
fewer financing deals, in particular at the scale-up 
stage  (104).  Financing  for  young  and  innovative 
reliant  on  bank 
companies 
lending,  while  equity  financing  plays  a  limited 
role (105). 
2025 
recommendation,  increased  availability  of  risk 
capital  and  stronger  participation  of  institutional 
investors is key to unlocking business dynamism.  

remains  heavily 

highlighted 

the 

As 

in 

institutional 

The  limited  development  of  the  venture 
capital  market  is  partly  linked  to  the  low 
participation  of 
investors, 
including  pension  funds.  Institutional  investors 
accounted  for  only  around  1%  of  private  equity 
and venture capital funds raised annually between 
2007  and  2023,  substantially  below 
levels 
observed in leading EU countries (see Annex 6). To 
achieve this objective, the government announced 
in  January  2026  the  creation  of  a  new  fund  of 
funds  (rot-weiß-roter  Scale-up  Fonds)  to  mobilise 
and  pool  capital  from  institutional  and  private 
investors  in  support  of  the  innovation  ecosystem. 
The  new  fund  is  expected  to  be  operational  from 
the beginning of 2027 (106). 

Graph A4.3: Venture capital (market statistics) as 
a percentage of GDP, 2024 

Source: Invest Europe 

tech’ are defined as companies that develop technological 
solutions based on scientific discoveries supported by R&D 
activities; that face a high level of technological risk; or that 
have filed for a patent or plan to do so. 

Austria benefits from a strong human capital 
base  in  research  and  innovation  and  has 

(101) OECD, 2024, PISA 2022 Results, OECD Publishing, Paris. 

(104) Ernst & Young, 2026, Start-up Investment Barometer Austria 

(102) Austrian Federal Ministry of Finance (BMF), 2021, Nationale 

2025. 

Finanzbildungsstrategie für Österreich. 

(105) OECD, July 2024, OECD Economic Surveys Austria. 

(103) Austrian Startup Monitor 2024. 

(106) Industriestrategie Österreich 2035, January 2026. 

51 

0.000.020.040.060.080.100.120.14% 
 
     
 
In 

particularly  among 

taken early steps to include entrepreneurship 
education  in  its  school  system,  yet  skills 
shortages  remain  a  binding  constraint.  With 
R&D  personnel  accounting  for  2.2%  of  the 
workforce  in  2023,  Austria  ranks  fifth  in  the 
EU-27. 
international  comparison,  Austria 
performs relatively well in terms of new graduates 
in STEM (107). Despite these strengths, shortages of 
skilled  workers  continue  to  limit  Austria’s  growth 
potential, 
and 
engineering  professionals (108)  (see  Annex  11). 
While  Austria  is  implementing  a  broad  range  of 
its 
reforms  to 
education  system  (see  Annex  13),  companies  still 
identify  skills  shortages  as  a  major  obstacle  to 
investment  (72%  of  companies  surveyed) (109). 
like  the  Start-up  Employee 
Recent 
Participation 
(Mitarbeiterbeteiligung) 
introduced in January 2024, which contains a new 
tax-friendly  employee  participation  regime,  could 
contribute to improving the attractiveness of start-
ups to talents.  

improve  the  performance  of 

initiatives 

science 

Act 

projects 

strengthens 

curriculum 
by 

Austria has also started since mid-2000’s to 
embed  entrepreneurship  education  in  the 
school  system.  The  2024  reform  of  the primary 
school 
this 
further 
entrepreneurship 
introducing 
approach 
education  as  a  cross-cutting  topic,  integrated 
across  various  school  subjects.  The  University 
Colleges  of  Teacher  Education,  inspired  by  EU-
YouthStart 
innovative 
entrepreneurial  challenges,  offer  compact  and 
practice-oriented 
the 
‘Empowering  every  child’ programme.  This  holistic 
learning  programme  aims  to  support  schools  in 
implementing  the  new  curriculum  under  the 
overarching  theme  of  entrepreneurship  education 
in  primary  schools.  The  Youth  Entrepreneurship 
Week  (YEW)  project  successfully  supports  upper 
secondary  school  students  in  developing  their 
creative potential and entrepreneurial skills. 

training  as  part  of 

such 

as 

(107) Austria has a higher-than-EU-average share of new 
graduates in science and engineering per thousand 
population, as well as in the field of ICT: 17.9 and 4.1 
respectively in 2023, compared with the EU averages of 
16.8 and 3.8. 

(108) Cedefop, Skills forecast 2025: Austria, 2025. 

(109) European Investment Bank, 2025, EIB Investment Survey 

2024: Austria Overview. 

52 

 
 
 
Table A4.1:  Key innovation indicators 

(1) EU average for the last available year or the year with the largest number of country data. 
Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database), Invest Europe, European Innovation Scoreboard. 

53 

R&D intensity (gross domestic expenditure on R&D as % of GDP)2.743.073.213.173.223.26:2.243.44Public expenditure on R&D as % of GDP0.850.860.960.970.981.00:0.720.64Scientific publications of the country within the top 10% most-cited publications worldwide as % of total publications of the country 11.6710.6810.249.95:::9.4412.31Researchers (FTEs) employed by public sector (Gov+HEI) per thousand active population3.33.54.24.64.54.6:4.3:International co-publications as % of total number of publications55.2461.2067.1168.1468.6370.64:57.24:Business enterprise expenditure on R&D (BERD) as % of GDP1.882.192.232.182.222.25:1.492.69Business enterprise expenditure on R&D (BERD) performed by SMEs as % of GDP:0.63::0.58::0.470.30Researchers employed by business per thousand active population5.56.47.48.38.48.6:5.9:Patent applications filed under the Patent Cooperation Treaty per billion GDP (in PPS €)4.864.494.173.48:::2.812.20Employment share of high-growth enterprises measured in employment (%):::0.540.59::0.87:SMEs with at least a basic level of digital intensity% SMEs (EU Digital Decade target by 2030: 90%)::::57.93:72.9971.39:Data analytics adoption% enterprises (EU Digital Decade target by 2030: 75%)::::23.94:26.3439.85:Cloud adoption% enterprises (EU Digital Decade target by 2030: 75%)::::35.56:41.7046.69:Artificial intelligence adoption % enterprises (EU Digital Decade target by 2030: 75%)::::10.7920.2729.9519.95:Public-private scientific co-publications as % of total number of publications12.6413.5814.7515.5816.2315.90:7.62:Public expenditure on R&D financed by business enterprises (national) as % of GDP:0.05::0.05::0.060.02Total public-sector support for BERD as % of GDP:0.43:::::0.21:R&D tax incentives: foregone revenues as % of GDP0.110.150.270.17:::0.10:BERD financed by the public sector (national and abroad) as % of GDP :0.28::0.13::0.11:Venture capital (market statistics) as % of GDP (calculated as a 3-year moving average)0.0200.0240.0210.0790.0740.029:0.06:Seed stage funding share (% of GDP)0.0020.0030.0010.0010.0020.001:0.01:Start-up stage funding share (% of GDP)0.0090.0080.0090.0150.0170.013:0.03:Later stage funding share (as % of GDP)0.0080.0130.0120.0630.0550.014:0.03:New graduates in science & engineering per thousand population aged 25-3416.918.319.418.117.918.3:16.8:Graduates in the field of computing per thousand population aged 25-343.322.913.223.704.064.29:3.8:Science and innovative ecosystemsAustria2010201520202022202320242025EU average (1)USHeadline indicatorInnovative talentR&D investment & researchers employed in businessesInnovation outputsDigitalisation of businessesAcademia-business collaboration Public support for business innovationFinancing innovation 
 
 
   
 
ANNEX 5: SINGLE MARKET AND INDUSTRY 

is 

industry 

Austria’s  business  environment  is  impacted 
by  high  energy  costs,  slow  productivity 
growth as well as administrative burden and 
regulatory  barriers.  The 
losing 
competitiveness  due  to  high  energy  and  labour 
costs  and  structural  deficits  while  structural 
change  is  accelerating,  and  value  creation  is 
shifting  from  production  to  knowledge-  and 
technology-intensive  activities.  In  this  vein,  the 
2025  country-specific  recommendations  (CSRs) 
called  for  measures  to  strengthen 
long-term 
competitiveness,  targeting,  among  other  things, 
promoting business dynamism by providing better 
access  to  venture  and  growth  capital,  simplifying 
regulation, 
burden, 
accelerating  permitting  as  well  as  strengthening 
competition  (CSR  3 2025).  The  2025  CSRs  also 
called  on  Austria 
industrial 
decarbonisation (CSR 4 2025). 

administrative 

to  advance 

reducing 

its 

the 

While  a  lack  of  skilled  labour,  uncertainty 
about the future and high energy costs weigh 
heavily  on  companies’  investment  decisions, 
Austria  is  taking  some  steps  to  improve  its 
business  environment  and  enhance  business 
dynamism. This is being done by endeavouring to 
improve  access  to  equity  finance,  which  remains 
an  obstacle  (see  also  Annex  6).  Austria  is  also 
tackling 
and 
administrative 
cumbersome permitting processes. Barriers persist 
with  regard  to  the  Single  Market,  for  instance  in 
terms of services and regulated professions. Other 
key  indicators  also  show  considerable  room  for 
improvement.  Related  to  competition,  an  aspect 
addressed  in  the  2025  recommendations,  the 
country’s restrictiveness for retail operations and a 
high  market  concentration  remain  a  concern  and 
may  impact  prices  for  consumers.  Austria  also 
continues 
fixed  gigabit 
infrastructure, particularly for fibre, despite strong 
performance in mobile connectivity. 

face  gaps 

burden 

to 

in 

Business dynamics 

Austria  is  a  small,  open  and  diversified 
economy.  Industry  made  up  19%  of  the  total 
gross  value  added  (GVA)  in  2024  (110).  Together 
with  the  mechanical  engineering  industry,  vehicle 

(110) Eurostat, 2026, Gross value added and income by main 

construction,  including  motor  vehicle  engines  and 
vehicle parts, is one of the sectors with the highest 
export  volume.  Other  top  product  groups 
in 
Austrian  exports  include  chemical  products,  iron 
and  steel,  food  and  beverages  (111).  Small  to 
medium-sized  enterprises (SMEs)  make  up  99.7% 
of  businesses  and  generate  57.3%  of 
the 
economy’s value added (112). 

it 

comes 

Despite  some  signs  of  recovery,  Austria’s 
economic situation remains challenging. While 
Austria  has  a  high  level  of  labour  productivity,  it 
has been declining since 2022 amid under-utilised 
capacities  (see  Table  A5.1),  with  growth  in  total 
factor productivity also remaining flat. The decline 
was  due  in  particular  to  manufacturing  and 
construction,  which  suffered  the  largest  drops  in 
demand,  but  also  to  some  service  sectors  (113). 
Some  companies  are  also  increasingly  facing 
restrictions  when 
financing 
investments,  despite  the  shares  of  public  as  well 
as  private  investment  relative  to  GDP  remaining 
slightly  higher  than  the  EU  average  (114).  The 
perceived  investment  gap  reported  by  companies 
is slightly higher than the EU average, with 13% of 
firms  reporting  underinvestment  over  the  past 
three years (115) (see Annex 6). In terms of foreign 
direct  investment  (FDI),  EUR 10.7  billion  flowed 
into  Austria  from  abroad  in  2024,  an  increase 
compared with 2023 (116), with Germany remaining 
the  largest  foreign  investor  (117).  Generally,  FDI  is 
mainly  directed 
service  activities, 
towards 
reflecting  Austria’s  role  as  a  regional  hub  for 
multinational enterprises (118). 

to 

Business dynamism, an element addressed in 
the  2025 CSRs, is traditionally  rather low in 
Austria. This signals the presence of obstacles to 

(111) Federal Chamber of Commerce, 2025, So wichtig ist Export 

für Österreich, Wko.at. 

(112) European Commission, 2025, SME Performance Review, 

Country Fact Sheet Austria Ec.europa.eu. 

(113) Austrian Productivity Board, 2025, Productivity report 2025, 

Produktivitaetsrat.at. 

(114) Austrian Productivity Board, 2025, Productivity report 2025, 

Produktivitaetsrat.at. 

(115) European  Investment  Bank,  2025,  EIB  investment  survey 

2025, Eib.org. 

(116) Austrian National Bank, 2025, Österreich erzielt in 

schwierigem Umfeld ein Leistungsbilanzplus, Oenb.at. 

(117) EY, 2025, Standort Österreich, Ey.com. 

industry, Ec.europa.eu. 

(118) OECD, 2023, FDI Qualities Review of Austria, Oecd.org. 

54 

 
 
 
 
 
 
efficient  resource  reallocation  and  within-firm 
productivity  growth.  Both  the  business  churn  rate 
and  the  share  of  high-growth  enterprises  were 
below  the  EU  aggregate  in  2023.  Considering  the 
2021-2023  average,  Austria  ranks  in  the  bottom 
quartile  of  EU  Member  States  for  both  indicators. 
While  Austria  has  a  low  share  of  high-growth 
firms,  business  creation  data  from  the  Austrian 
Federal  Economic  Chamber  shows  that  a  total  of 
40 936 firms were newly registered in 2024. This 
is  slightly  higher  than  in  2023  (+0.4%),  with 
preliminary  2025  data  also  indicating  a  positive 
trend.  Since  January  2026,  a  completely  digital 
business  registration,  the  ‘GISAExpress’  has  been 
available.  Commercial 
be 
completed directly electronically by entering them 
Information 
in  the  Austrian  Business  Licence 
System (GISA). 

procedures 

can 

with 

retail, 

construction 

there  was  a  slight  decrease 

Following a surge in 2024, 2025 saw another 
increase  in  corporate  insolvencies,  with  19 
companies sliding into bankruptcy every day. 
The  number  of  company  bankruptcies  rose  by 
and 
3.4%, 
gastronomy/accommodation  as  insolvency  drivers 
although 
in 
insolvencies  in  the  latter  sector  in  2025.  Despite 
this  increase,  preliminary  liabilities  fell  by  55.2% 
year-on-year  to  approximately  EUR 8.48  billion. 
This  is  due  to  the  significantly  lower  number  of 
insolvencies  with liabilities  of  more  than  EUR 200 
million  in  2025.  While  the  number  of  employees 
affected  (21 900)  fell  by  26%  compared  with 
2024,  there  was  an  8.5%  increase  in  terms  of 
affected  creditors  (54 600).  In  addition,  a  high 
number  of  unopened  proceedings  is  putting  a 
strain on the domestic economy (121).  

reported 

investment 

A  lack  of  skilled  labour,  uncertainty  about 
the  future  and  high  energy  costs  are  the 
main 
obstacles. 
According to the EIB Investment Survey,  the main 
long-term  obstacles  to  investment  reported  by 
Austrian  firms  in  2025  were  the  availability  of 
skilled staff (85%, 2024: 86%), uncertainty about 
the  future  due  to  geopolitical  tensions  and  weak 
economic  outlook  (85%,  2024:  81%),  and  high 
energy costs (81% in 2024 and 2025)  (119). All of 
these  are  slightly  higher  than  their  EU  averages, 
indicating  a  slightly  more  pessimistic  outlook  in 
the Austrian business community. However, recent 
trends  show  that  export-oriented  companies  are 
once  again  looking  more  optimistically  into  the 
future,  despite  uncertainties  regarding  long-term 
decisions  such  as  investment  and  staffing  (120). 
Labour shortages persist in many sectors and, due 
to  demographic  trends,  the  labour  supply 
is 
expected to become an increasingly limiting factor 
for  economic  growth  in  the  future.  One  of  the 
highest  vacancy  rates  in  the  EU,  an  increasing 
part-time  rate  for  men  and  women  and  a 
comparatively  low  employment  rate  of  older 
people have further aggravated shortages in many 
sectors  (see  also  Annex  11  and  Annex  13). 
Particularly  energy-intensive  industries  have  also 
felt  the  burden  of  energy  costs  on  business 
revenues  since  the  energy  crisis  (see  also  Annex 
9). 

(119) European Investment Bank, 2025, EIB investment survey 

2025, Eib.org. 

(120) Federal Economic Chamber, 2025, WKÖ-

Wirtschaftsbarometer Winter 2025, Wko.at. 

55 

Business environment 

regulatory 
Austria’s  administrative  and 
burden, an issue addressed in the 2025 CSRs, 
remains  high.  The  country  is  ranked  as  less 
competition-friendly  than  the  OECD  average (122). 
Business  regulation  is  also  seen  as  a  greater 
obstacle  to  investment  than  the  EU  average. 
According  to  the  EIB  Investment  Survey,  this  is 
reported  as  an  issue  by  78%  and  as  a  major 
obstacle by 41% of businesses (EU averages: 69% 
(123).  On  average,  a 
and  34%,  respectively) 
company  has  to  spend  13  hours  of  working  time 
per  week  on  bureaucracy  alone,  according  to  the 
Federal  Economic  Chamber  (124).  While  licensing 
and  permitting,  a  key  element  of  the  2025 
recommendation,  was  assessed  by  the  OECD  as 
comparatively  less  cumbersome  in  the  past  (125), 
administrative  and  regulatory  constraints  can  still 
hamper  faster  progress  in  important  areas,  such 
as  the  deployment  of  renewables.  Despite  efforts 
to simplify procedures, such as the adoption of the 

(121) KSV1870, 2026, Unternehmensinsolvenz 2025, Ksv.at. 

(122) OECD, 2024, Product market regulation – country note 

Austria, 2024, Oecd.org. 

(123) European Investment Bank, 2025, EIB investment survey 

2025, Eib.org. 

(124) Federal Economic Chamber, 2025, WKÖ-Danninger drängt 
auf Umsetzung des Entbürokratisierungspakets, Wko.at. 

(125) OECD, 2024, Product market regulation – country note 

Austria, 2024, Oecd.org. 

 
 
 
Renewables Expansion Act and the amendment of 
the Environmental Impact Assessment Act, the far-
reaching  powers  of  federal  states  in  areas  like 
spatial  planning  and  zoning  can  still  lead  to 
complex  requirements  and  differing  procedures. 
Permitting  issues  may  also  persist  relating  to 
building  permits.  Approval  processes  related  to 
building regulations are regulated at federal state 
level,  resulting  in  differences  in  depth,  deadlines 
and detail requirements (126). 

and 

the 

and 

over 

suggestions 

Deregulation 

permitting,  which 

field  of  simplification,  burden 
In 
are 
reduction 
addressed  by  the  2025  CSRs,  a  number  of 
measures  to 
improve  the  situation  are 
ongoing.  In  2025,  individuals  and  businesses 
for 
4000 
submitted 
simplification  to  the  new  Office  for  Reducing 
Bureaucracy 
(SEDA). 
Furthermore, a package of measures comprising a 
total  of 113 reform steps affecting various areas 
to reduce regulatory burden was presented by the 
federal  government.  As  part  of  this  initiative  to 
reduce  administrative  burden,  there  are  plans  to 
rules  and 
overturn  more 
regulations.  Furthermore,  an  acceleration  of 
permitting  procedures  and  an  end  to  duplicate 
checks  (one-stop-shop)  is  envisaged.  This  would 
mean  that  permits  will  be  processed  in  a  single 
procedure, with just one decision being issued (127). 
Prior  to  these  endeavours,  Austria  adopted  a 
package  to  relieve  the  administrative  burden  on 
SMEs. 
accelerate 
permitting  for  renewable  energy  projects  and  for 
smaller businesses of any kind are also ongoing. 

than  a  hundred 

Legislative 

initiatives 

to 

Austria’s  e-government  performance 
is 
mixed. The country leads in certain areas, such as 
total digital public services (128) for individuals and 
technical  deployment  of  electronic  health  records. 
While  still  lagging  behind  that  of  some  other 
Member  States,  Austria’s  performance  in  digital 
public  services  for  businesses  shows  a  promising 
development, with higher growth rates than the EU 

(126) European Commission, 2025, Development of a business 

case on the concept and potential impact of implementing 
Digital Building Permits (DBP) within the EU construction 
sector. 

(127) Federal Ministry of European and International Affairs, 2025, 

in  both  total  and  cross-border  digital  public 
services (129). The provision of cross-border digital 
public  services  is  also  expected  to  improve  with 
progress  being  made  in  implementing  the  Single 
Digital Gateway (see Annex 7). 

in 

in 

trends 

(FTTP)  coverage 

remaining  gaps 

Although 
connectivity 
infrastructure are generally  positive,  Austria 
continues  to  display  a  mixed  performance, 
with  strong  results  in  mobile  connectivity 
and 
fixed  gigabit 
networks. 5G coverage is close to saturation and 
aligned  with  the  Digital  Decade  2030  targets, 
while  very  high-capacity  network  (VHCN)  and 
fibre-to-the-premises 
remain 
below  the  EU  averages,  including  in  rural  areas, 
despite  robust  growth  rates. Overall  5G  coverage 
reached  99.55%  in  2024,  above  the  EU  average, 
including high-quality 5G in the 3.4-3.8 GHz band 
(83.97%),  and  robust  coverage  even  in  sparsely 
populated  areas.  By  contrast,  VHCN  coverage 
stood  at  72.16%  in  2024,  still  below  the  EU 
average  (82.49%),  while  FTTP  coverage  reached 
44.82%, remaining significantly below the EU level 
(69.24%),  with  lower  coverage  in  rural  areas  at 
33.89%  (against  the  EU  average  of  58.78%), 
which  continues  to  be  a  challenge. Austria  has 
recorded  growth  rates  above  the  EU  average  for 
both  VHCN  and  FTTP  and  relies  primarily  on  the 
Broadband  Austria  2030  initiative,  including  RRF 
(Recovery 
Facility)-backed 
Resilience 
investments,  as  its  main  funding  instrument  for 
fibre deployment, complemented by the alignment 
the  Gigabit 
of 
legislation  with 
Infrastructure  Act.  Overall,  Austria 
is  broadly 
aligned  with  its  national  connectivity  trajectory, 
but 
fibre 
deployment remains key  to  closing  the  gap  with 
EU averages. 

acceleration 

national 

further 

and 

of 

Availability  of  finance  remains  an  obstacle 
investment  and  hampers  business 
to 
dynamism.  While 
share  of  Austrian 
the 
businesses reporting this as an obstacle is slightly 
below the EU  average (44% vs 45%) (130), Austria 
is still at the lower end of the EU when it comes to 
the use of equity and venture capital for corporate 
financing,  with  business  financing  heavily  skewed 

Entbürokratisierungspaket, Bmwet.gv.at. 

(129) European Commission, 2025, Digital Decade Country Report 

(128) Part of the barriers highlighted in the Single market strategy 
(“Terrible Ten”) and the 2026 Annual Single Market and 
Competitiveness Report. 

Austria, Ec.europa.eu. 

(130) European  Investment  Bank,  2025,  EIB  investment  survey 

2025, Eib.org. 

56 

 
 
 
invented 

in-house 

intellectual  property 

towards bank loans (131) (see Annex 6). In addition, 
in  its  medium-term  fiscal-structural  plan  (MTP), 
Austria committed to a reform of the capitalisation 
of 
in 
businesses’ balance sheets, which is also expected 
to  improve  access to risk  capital  for  innovative 
firms,  especially  start-ups.  Furthermore, 
the 
planned  creation  of  a  fund  of  funds,  will  aim  to 
mobilise national and international venture capital 
to  facilitate  better  access  of  Austrian  companies 
to growth capital (see also Annex 4). 

2025  saw  some  positive  developments 
regarding  late  payments  (132).  Despite  an 
increase  compared  with  2024,  Austria  has  one  of 
the  narrowest  payment  gaps  for  business-to-
business  payments  (i.e.  the  gap  between  the 
agreed  and  actual  payment  times).  The  gap  for 
payments  from  the  public  sector  decreased  to 
14.8  days  but  remains  above  the  EU  average.  In 
the  same  vein,  while  44.6%  of  SMEs  were  still 
reporting  late  payments  from  other  businesses, 
this  share  is  below  the  EU  average.  The  share  of 
SMEs  reporting  payment  delays  from  public 
entities  (12.1%)  decreased  compared  with  2024 
and is one of the lowest in the EU (see Table A5.1). 

Single Market 

trade 
Recent  economic  volatility  and 
tensions underlined the importance of the EU 
Single Market for growth and resilience. Intra-
EU  trade  stood  at  37.1%  of  GDP  in  2025  (EU 
average  40.7%).  According  to  the  EIB  Investment 
Survey,  75%  of  Austrian  firms  either  imported 
and/or  exported  goods  and/or  services  (within  the 
Single  Market  or  beyond),  which  is  considerably 
above  the  EU  average  of  66% (133),  with  most 
exporters  being  SMEs  (134).  EU  Member  States,  in 
particular  Germany,  remain  among  Austria’s most 
important  trading  partners.  Exports  to  Germany 

alone  made  up  a  total  export  share  of  29.7%  of 
the  entire  Austrian  economy  in  2024.  Germany  is 
also  the  largest  investor  in  the  country (135).  The 
world market share of Austrian goods exports fell 
strongly in 2024, as the increase in global interest 
for  machinery  and 
rates 
investment  goods,  in  which  Austria  is  specialised. 
Sharp  increases  in  energy  and  unit  labour  costs 
and  the  strong  appreciation  of  the  euro  against 
the  US  dollar  since  the  beginning  of  2025  are 
creating additional pressure (136). 

reduced  demand 

indicators 

Single  Market 

show 
Key 
considerable  room  for  improvement.  Austria’s 
transposition  and  conformity  deficits  with  respect 
to  Single  Market  directives  (137)  are  clearly  higher 
than the EU averages. The percentage of directives 
not  transposed  in  a  timely  manner  (transposition 
deficit)  increased  to  1.5%,  which  is  above  the  EU 
average  of  1.1%  and  takes  Austria  another  step 
away  from  reaching  the  0.5%  target  proposed  in 
the  Single  Market  Act.  The  conformity  deficit  (i.e. 
the  percentage  of  all  directives 
transposed 
incorrectly) also slightly increased to 1.7% in 2024 
(EU  average  1.1%)  and  is  now  the  fourth  highest 
in  the  EU,  behind  Hungary,  Italy  and  Poland.  The 
number  of  infringement  cases  is  also  marginally 
higher  than  the  EU  average.  In  addition,  Austria 
resolved 73.3% of the SOLVIT EU rights resolution 
cases  it  handled  as  lead  centre  in  2025  (against 
an EU average of 84.6%). After Greece, Poland and 
Sweden,  this  is  the  fourth  lowest  share  among 
Member States (138).  

Compliance  of  products circulating  in  the 
Single Market (139) is key to ensuring a level-
playing  field  for  law-abiding  companies  and 
the safety of consumers. In Austria, the number 
of  market 
has 
increased  compared  with  2019.  In  2025,  national 
authorities  reported  in  the  EU  system  for  market 

investigations 

surveillance 

(135) Federal Ministry of Economy, Energy and Tourism, Bilateral 

economic relations with Europe, Bmaw.gv.at. 

(136) Austrian Productivity Board, 2025, Productivity report 2025, 

(131) Austrian Productivity Board, 2024, Productivity Report, 

Produktivitaetsrat.at. 

Produktivitaetsrat.at. 

(132) Part of the barriers highlighted in the Single market strategy 
(‘Terrible Ten’) and the 2026 Annual Single Market and 
Competitiveness Report. 

(137) Part of the barriers highlighted in the Single market strategy 
(“Terrible Ten”) and the 2026 Annual Single Market and 
Competitiveness Report. 

(138) European Commission, Single Market and Competitiveness 

(133) European Investment Bank, 2025, EIB Investment Survey 

Scoreboard, Ec.europa.eu. 

2025, Eib.org. 

(134) Austrian Federal Economic Chamber , 2025, So wichtig ist 

Export für Österreich, Wko.at. 

(139) Part of the barriers highlighted in the Single market 

strategy (‘Terrible Ten’) and the 2026 Annual Single Market 
and Competitiveness Report. 

57 

 
 
 
a 

of 

total 

(ICSMS) 

surveillance 
215.3 
investigations per one million inhabitants, which is 
higher  than  the  EU median  of  136.2.  The  number 
of  notifications remains limited  in  absolute  terms, 
which  may  also  be  the  result  of  insufficient  IT 
national interoperability to the ICSMS system. The 
upcoming  revision  of  the  Market  Surveillance 
Regulation  will  upgrade 
fully 
interoperable EU digital platform.  

ICSMS 

to  a 

and 

secondary  materials 

Regulatory and administrative barriers to the 
Single Market persist, affecting goods trade, 
and  particularly  the  provision  of  services. 
Businesses report that cross-border movements of 
waste 
remain 
burdensome,  as  EU  waste-shipment  rules  are 
complemented  by  national  requirements  under 
Austria’s  Waste  Management  Act, 
creating 
additional  compliance  obligations  and  complexity 
for  operators  engaged  in  import,  export  and 
transit.(140). While the overall regulatory framework 
provides  favourable  conditions  for 
in 
services,  restrictions  remain  in  several  policy 
areas. In terms of sectors, courier services are the 
most open sector in Austria, while logistics freight-
(141). 
forwarding  are 
the  most 
Restrictions affecting the temporary movement of 
engineering professionals are significant compared 
with EU best  performers. Potential  hindrances are 
a  relatively  short  initial  duration  of  stay  for 
contractual  and  independent  services  suppliers 
foreign  engineering 
for 
and  a 
professionals to take a local examination to obtain 
a  licence  to  practice  (142).  Furthermore,  labour 
market  tests  are  applied  to  workers  seeking  to 
provide services in Austria on a temporary basis as 
intra-corporate  transferees,  contractual  services 
suppliers or independent service providers (143).  

requirement 

restricted 

trade 

Barriers also persist in professional services 
(144).  Related  to  the  2025  CSR  on  strengthening 
competition overall, Austria has not yet taken any 

(140) European Round Table for Industry (ERT), 2025, Single 

Market Compendium of Obstacles, ert.eu. 

(141) OECD, 2026, Services Trade Restrictiveness Index (STRI), 

Oecd.org. 

(142) OECD, 2026, Services Trade Restrictiveness Index (STRI), 
Oecd.org and OECD, 2025, Services Trade Restrictiveness 
Index (STRI),Oecd.org. 

(143) OECD, 2026, Services Trade Restrictiveness Index (STRI), 

Oecd.org. 

(144) Part of the barriers highlighted in the Single market strategy 
(‘Terrible Ten’) and the 2026 Annual Single Market and 
Competitiveness Report. 

58 

regarding 

specific  measures 
services  and 
professions.  The  OECD  found  that  regulatory 
restrictiveness  is  higher  in  Austria  than  the  EU 
average  for  regulated  professions,  such  as  civil 
engineers,  accountants,  and  estate  agents  (145). 
include 
Access  barriers  and  restrictive  rules 
extensive  reserved  activities  and  interdisciplinary 
restrictions  (146).  So  far,  progress  in  addressing 
barriers  in  the  field  of  business  services  has 
remained limited. In answer to a survey carried out 
by  the  European  Commission  between  December 
2025 and February 2026, Austria reported it fully 
implemented  12  and  partially  implemented  3  out 
of  18  of the  2021 Commission  recommendations 
(147).  The  Commission 
is  currently  assessing 
Austria’s  answer  to  measure  actual  progress  in 
implementing the 2021 recommendations. 

and 

simplify 

With regard to the 2025 recommendation on 
simplification  and  reducing  administrative 
burden,  Austria  has  taken  some  action  to 
accelerate 
business 
establishment  procedures  in  recent  years 
(148). Since 1 January 2026, it has been possible to 
register businesses in a completely digital fashion, 
including  via  smartphone.  The  aim  is  to  reduce 
manual  checks,  leading  to  considerable  time  and 
administrative  cost  savings  (149).  Against  the 
backdrop  of  low  dynamism  and  young  innovative 
companies  and  start-ups  struggling  with  liquidity, 
Austria also adopted a start-up package as part of 
its  recovery  and  resilience  plan.  This  package 
included the introduction of the new legal form of 
‘flexible  company’  (FlexKapG).  It  aims  to  cater  to 
the  specific  needs  of  start-ups  and  other 
innovative  companies  by  reducing  the  minimum 
share  capital  at  the  time  of  incorporation  as  well 
as  by  reducing  the  minimum  corporation  tax  by 
over  70%  (see  also  Annex  6).  Austria  expects  the 

(145) OECD, 2024, Product market regulation – country note 

Austria, 2024, Oecd.org. 

(146) European Commission, 2021, Communication on updating 
the reform recommendations for regulation in professional 
services, COM(2021)385. 9/7/2021, Eur-lex.europa.eu. 

(147) European Commission, 2021, Communication on updating 
the reform recommendations for regulation in professional 
services, COM(2021)385. 9/7/2021, Eur-lex.europa.eu. 

(148) Part of the barriers highlighted in the Single market strategy 
(‘Terrible Ten’) and the 2026 Annual Single Market and 
Competitiveness Report. 

(149) Federal Economic Chamber, 2025, Aktuelle Entwicklungen: 

Maßnahmenpaket der Bundesregierung zur 
Entbürokratisierung, Wko.at. 

 
 
 
total number of flexible companies to reach 7 500 
after five years. 

a 

to  high 

boasting 

Also  tied  to  the  2025  CSR  on  strengthening 
competition,  Austria  remains  among  the 
most  restrictive  Member  States  for  retail 
operations, 
high  market 
concentration.  Market  entry,  which  is  already 
investment  costs  and 
difficult  due 
oversaturation,  is  further  hindered  by  stringent 
establishment  rules (150).  For  instance,  by  end 
2024,  more  than  200  local  retailers  had  closed 
down  their  shops  since  2019,  while  the  top  four 
food  retailers  were  able  to  open  even  more 
branches  during  the  same  period.  Austria  already 
has  one  of  the  highest  market  concentrations  in 
the EU, especially in food retailing, where the four 
biggest players in the sector generate around 91% 
of  the  total  turnover  (151).  Market  concentration  is 
often linked to structural competition issues, such 
as  higher  market  entry  barriers  and  a  higher  risk 
of  collusion  between  competitors  (152).  Market 
entry  barriers  are  also  of  a  regulatory  and 
infrastructural  nature,  including  the  availability  of 
land,  zoning  and  development  plans,  building  law 
requirements,  the  attitude  of  cities/municipalities 
towards  the  establishment  of  branches,  traffic 
the 
transport 
development  and 
availability of labour (153). 

links,  and 

The  ‘Austria  surcharge’  in  retail  also  puts 
consumers  at  a  disadvantage.  In  2023,  the 
Austrian Federal Competition Authority highlighted 
the  aforementioned  high  market  concentration  as 
well  as  higher  prices  compared  with  other 
countries, which could result from territorial supply 
constraints  (154).  Often  referred  to  as  an  ‘Austria 
surcharge’, 
can 
disadvantage  Austrian  consumers.  It  can  mean 
that  identical  branded  products  are  significantly 

constraints 

these 

(155) 

(150) European Commission, 2022, Retail restrictiveness indicator 

(2022 update), Ec.europa.eu. 

(151) OECD, 2024, Competition in the Food Supply Chain – 

Contribution from Austria, OECD.org. 

(152) OECD, 2024, Competition in the Food Supply Chain – 

Contribution from Austria, OECD.org. 

(153) OECD, 2024, Competition in the Food Supply Chain – 

Contribution from Austria, OECD.org. 

(154) Austrian Federal Competition Authority (AFCA), 2023, Final 

report on sector Inquiry, Bwb.gv.at. 

(155) Part of the barriers highlighted in the Single market strategy 
(‘Terrible 10’) and the 2026 Annual Single Market and 
Competitiveness Report. 

59 

more  expensive  in  Austria  than  in  neighbouring 
Member  States,  especially  Germany,  with  a  price 
difference  that  cannot  be  explained  by  other 
factors such as tax rates (156). In October 2025, the 
parliamentary  groups  of  the  government  parties 
called  on  the  Minister  for  Economy,  Energy,  and 
Tourism  in  another  motion  for  a  resolution  to 
continue  advocating 
for  effective  measures 
against  the  surcharge  at  European  level  (157).  In 
addition  to  these  challenges,  like  elsewhere  in 
Europe, physical retail is also under pressure from 
online competition (often from abroad). 

On public procurement, Austria is an average 
performer  overall.  The  percentage  of  contracts 
awarded  after  just  one  bid  was  submitted  was 
27%  in  2025,  which  corresponds  to  the  EU 
median. Furthermore, the rate of direct awards of 
12%  in  2024  and  2025  was  the  fourth  highest 
among EU Member States, thus surpassing the EU 
median. 

To  strategically  leverage  the  approximately 
18% of GDP that Austria spends annually on 
public  procurement (158),  the  country  has 
become a front runner in terms of innovation 
procurement.  Austria’s  new  industrial  strategy 
announced  an  upcoming  action  plan  for  strategic 
and  innovation  procurement  (159).  In  addition,  the 
country’s recently presented administrative burden 
reduction  package  also  includes  the  promotion  of 
innovation  procurement  as  one  of  its  objectives, 
though specific details on measures planned have 
yet to be announced (160). With the ‘IÖB initiative’, 
Austria  belongs  to  a  group  of  frontrunners  that 
have  already  established  a  central  hub  dedicated 
its 
to 
innovation  procurement,  acknowledging 
value  and  experimenting  at  advanced 
level. 
Furthermore,  the  Austrian  Start-Up  Council  is 
currently advising on the involvement and support 
of  innovative  start-ups  in  public  procurement.  In 
addition,  Austria  aims 
to  promote  socially 
responsible  public  procurement,  which  is  also 

(156) Chamber of Labour Vienna, Why is food so much more 

expensive in Austria?, Wien.arbeiterkammer.at. 

(157) Parlament Österreich, 2025, Parlamentskorrespondenz Nr. 

934 vom 21.10.2025, Parlament.gv.at. 

(158) Austrian Parliament, 2023, Fachinfos- Fachdossiers, 

Nachhaltige öffentliche Beschaffung, Parlament.gv.at. 

(159) Federal Ministry of Economy, Energy and Tourism, 2026, 

Industrial Strategy Austria 2035, Bmwet.gv.at. 

(160) Federal Ministry of European and International Affairs, 2025, 

Entbürokratisierungspaket, Bmwet.gv.at. 

 
 
 
anchored 
in  the  country’s  social  partnership 
system, and previously published an action plan on 
green public procurement (GPP) (161). 

(EU  average:  25%) 

Businesses’  views  on  corruption  risks  in 
public  procurement  are  below  the  EU 
average.  In  Austria,  52%  of  companies  (EU 
average: 58%)  consider tailor-made  specifications 
for  particular  companies  in  public  procurement 
procedures,  and  50%  (EU average:  53%)  conflicts 
of interest in the evaluation of bids, to be a ‘very’ 
or  ‘fairly  widespread’  practice.  Among  companies 
that have experience of and have participated in a 
public  procurement  procedure,  22%  think  that 
corruption  has  prevented  them  from  winning  a 
public  tender  or  a  public  procurement  contract  in 
(162).  88%  of 
practice 
businesses  perceive  the  level  of  independence  of 
the  public  procurement  review  body  at  federal 
level (the Federal Administrative Court) to be ‘very’ 
is  reviewing  public 
or 
procurement  cases  (163).  The  Austrian  Court  of 
Audit  regularly  examines  areas  with  particularly 
high  risks  of  corruption  and  had  recommended 
that federal authorities procure more via a central 
purchasing  body  (164).  The  Federal  Ministry  of 
Justice  is  planning  a  project  aimed  at  further 
developing  e-procurement,  also  with  a  view  to 
enhancing  efficiency  and  transparency  (165).  When 
identifying  sectors  at  high  risk  of  corruption,  civil 
society  and  the  prosecution  service  still  point  to 
the  links  between  some  media  outlets  and  the 
political 
state 
advertising,  as  well  as  to  the  zoning  and  urban 
planning sector, particularly at local level (166). 

‘fairly  good’  when 

sphere,  especially 

regarding 

it 

There  are  currently 4  eProcurement  services 
operating 
them 
specialised on 
construction, 
train and highway 
fragmentation  still exits not  only  cross-border  but 

in  Austria.  With one  of 

(161) Federal Ministry of Justice, 2021, National Action Plan to 
promote sustainable public procurement, Bmj.gv.at. 

(162) European Commission, 2025, Flash Eurobarometer 557, 

Data.europa.eu. 

(163) European Commission, 2025, EU Justice Scoreboard, 
Ec.europa.eu and European Commission, 2025, Flash 
Eurobarometer 555, Ec.europa.eu. 

(164) European Commission, 2025, Rule of Law Report – Country 

Chapter Austria, Ec.europa.eu. 

(165) European Commission, 2025, Rule of Law Report – Country 

Chapter Austria, Ec.europa.eu. 

(166) European Commission, 2025, Rule of Law Report – Country 

Chapter Austria, Ec.europa.eu. 

service. 

Similarly, 

also within Austria.  German economic  operators 
seeking  to  participate  in  Austria  are  currently 
required  to  use  the Austrian buyer’s  designated 
eProcurement 
an 
Austrian economic  operator  seeking  to  participate 
in  Germany  must  use  the eProcurement  service 
specified by the German buyer, effectively creating 
a  factual  barrier.  This  fragmentation  underscores 
the  need  for introducing 
interoperability  and 
common standards. The once-only principle is only 
partially implemented at national level (see Annex 
7),  and  buyers  across  the  EU  still  lack  digital 
relevant  evidence.  The  Austrian 
access 
authorities  have  also 
reported  data  quality 
concerns, pointing to the need for robust validation 
system 
the 
rules. 
Therefore, 
public 
a 
would benefit from 
procurement  data  collection  and  analysis  service 
within  the  government  to  support  data-driven 
oversight of the procurement life cycle (167). 

Austrian 
dedicated 

to 

and 

International 

As  the  pace  of  technological  development 
intensifies,  the  strength  of  the  European 
Standardisation  System  increasingly  relies 
on  the  capacity  of  national  standardisation 
bodies  (168)  to  engage  a  broad  and  highly 
skilled  expert  community.  In  Austria,  it  is 
therefore essential to reinforce the role of Austrian 
Standards 
the  Austrian 
Electrotechnical  Association  (OVE)  so  they  can 
sustain active participation from a critical mass of 
stakeholders and technical specialists. At the same 
time,  advancing 
towards  a  more  digitalised 
national  standardisation  framework—designed  to 
enhance  responsiveness,  streamline  processes, 
require  greater 
and  widen  participation—will 
allocation of resources. Such efforts are crucial for 
Austria  to develop  a  resilient  and  forward-looking 
standardisation  ecosystem,  enabling  its  industries 
to  fully  leverage  opportunities  within  the  Single 
Market. 

(167) European Court of Auditors, Special Report 28/2023: Public 
Procurement in the EU. Less competition for contracts 
awarded for works, goods and services in the 10 years up to 
2021, 2023, Special report 28/2023: Public procurement in 
the EU. 

(168) Part of the barriers highlighted in the Single market strategy 
(‘Terrible 10’) and the 2026 Annual Single Market and 
Competitiveness Report. 

60 

 
 
 
Industry and economic security 

Graph A5.1: Manufacturing industry production: 
total and selected sector, index (2021=100), 
2015-2024 

to 

respectively 

in  the  emissions 

Energy-intensive industries have been facing 
sectors  are 
particular  challenges.  These 
in  production,  while 
experiencing  a  decline 
knowledge-intensive  services  are  gaining 
in 
importance.  Energy-intensive  industries  saw  their 
energy  costs  increase  by  as  much  as  28%  and 
in  2021  and  2022,  and 
46% 
companies 
trading  system 
recorded  increases  of  up  to  59%  (169).  Although 
support  measures  partially  alleviated  the  burden, 
electricity  prices  for  Austrian  companies  have 
remained  among  the  highest  in  the  EU  (170).  As  a 
result, around 75% of energy-intensive companies 
consider energy prices to be a particularly relevant 
(171).  An 
risk 
their  business  operations 
announced industrial electricity price of 5 cents per 
kWh, to be introduced in 2027, is expected to bring 
some  relief,  as  will  the  adoption  of  the  Electricity 
Act.  This  Act  overhauls  the  existing  electricity 
market  rules  and,  among  other  things,  introduces 
power  purchase  agreements  and  strengthens  grid 
renewables 
efficiency, 
integration.  However, 
is  only 
expected  in  2-3  years.  Furthermore,  several  one-
off measures are being implemented, such as the 
Stromkosten-Ausgleichsgesetz, 
grants 
subsidies to offset the increase in electricity prices 
resulting  from  the  EU  Emissions  Trading  System 
for 2025/2026, and the reduction of the electricity 
levy from 1.5 cents/kWh to 0.82 cents for the year 
2026 (see also Annex 9). 

digitalisation 

its  full 

impact 

which 

and 

Source: Eurostat 

4.7% 

value 

added 

(172).  Gross 

accounted 
Austria’s 

Following  growth  in  2021-2022,  production 
in manufacturing also fell from the beginning 
of  2023 
in 
manufacturing  declined  by  8.75%  between  2022 
and 2024 but started to grow again in 2025 (173). 
for 
industries 
Energy-intensive 
approximately 
total 
of 
manufacturing  gross  value  added 
in  2024. 
rubber  and  plastic 
in  chemicals, 
Production 
products,  as  well  as  paper  and  paper  products 
declined by around 10% between 2021 and 2024, 
while  manufacturing  of  non-metallic  mineral 
products  fell  by  just  over  15%  (see  Graph  A5.1). 
Austria's  industry  is  being  affected  not  only  by 
energy costs but also by sharply rising unit labour 
costs  as  well  as  by  protectionist  tendencies  in 
global  trade  and  China’s  increasing  industrial 
dominance (174). 

Related  to  the  2025  CSR  sub-part  on 
the 
advancing 
industrial  strategy  recently  presented  by  Austria 

industrial  decarbonisation, 

(169) Austrian Productivity Board, 2025, Productivity report 2025, 

Produktivitaetsrat.at. and WIFO, 2025, Industry Survey 2025, 
Wifo.ac.at. 

(172) Austrian Productivity Board, 2025, Productivity report 2025, 

(170) Eurostat, 2025, Electricity price statistics, Ec.europa.eu. 

Produktivitaetsrat.at. 

(171) Austrian Productivity Board, 2025, Productivity report 2025, 

(173) Eurostat, 2026, Gross value added and income by main 

Produktivitaetsrat.at. and WIFO, 2025, Industry Survey 2025, 
Wifo.ac.at. 

industry (nama_10_a10), Ec.europa.eu. 

(174) Austrian Productivity Board, 2025, Productivity report 2025, 

Produktivitaetsrat.at. 

61 

7080901001101201301401502015201620172018201920202021202220232024ManufacturingManufacture of wood and of products of wood and cork, except furniture;manufacture of articles of straw and plaiting materialsManufacture of paper and paper productsManufacture of chemicals and chemical productsManufacture of rubber and plastic productsManufacture of other non-metallic mineral productsManufacture of basic metals 
 
 
       
 
initiate  additional  activities  in  these  key  strategic 
value chains. 

in 
Austria  has  made  some  progress 
implementing  the  Net-Zero 
Industry  Act 
(NZIA).  It  has  successfully  designated  a  single 
point  of  contact,  which  is  crucial  for  streamlining 
communication 
among 
stakeholders. Furthermore, Austria has established 
a  national  contact  point  to  process  applications, 
facilitating  the  advancement  of  net-zero  strategic 
projects.  However,  so  far,  Austria  has  not 
confirmed any net-zero strategic projects and has 
not designated any net-zero acceleration valleys. 

coordination 

and 

Manufacturing depends heavily on imports of 
critical  raw  materials.  The  main  imports  are 
coking  coal,  aluminium  and  copper  waste  (179). 
in  manufacturing 
40.9%  of  material 
inputs 
production  originated  from 
in  2024, 
imports 
showing Austria’s particular vulnerability to supply 
chain  disruptions.  To  mitigate  such  vulnerabilities, 
Austria  adopted 
raw  materials  2030 
masterplan in 2021 (180), whose implementation is 
ongoing  (181).  In  addition,  recycling  can  also  offer 
some  further  potential  to  reduce  the  need  for 
critical  raw  materials.  Austria’s  overall  circular 
material use rate is already above the EU average 
and the recycling rate for e-waste, a key source of 
critical raw materials, is also slightly above the EU 
average (at 83.3% vs 82.2% in 2023 (182).  

its 

includes  commitments 

(175) 
to  strengthening 
circularity,  improving  resource  productivity  and 
promoting  key  and  innovative  technologies.  These 
commitments have yet to be implemented. Several 
initiatives,  for  instance  on  the  transformation  of 
industry  (176),  were  launched  in  recent  years  but 
are 
constrained  by  budgetary 
consolidation measures (see also Annex 8). 

increasingly 

automotive 

Austria’s  automotive  supplier  industry,  in  a 
similar way to its counterparts in other parts 
of  Europe,  is  struggling  to  achieve  global 
competitiveness in the midst of the e-vehicle 
The 
transformation. 
supplier 
industry 
industrial  sector, 
important 
is  an 
employing  35 900  people.  It  also  has  an  export 
quota  of  87%,  of  which  around  40%  goes  to 
Germany  (177).  As  a  result,  difficulties  in  the 
German market also hit Austrian companies in the 
value  chain.  Higher  costs  than  those  of  Asian 
competitors  and  a  weak  demand  for  electric  cars 
further  impact  on  the  sector’s  competitiveness  as 
well as on the sustainable mobility transition. The 
share  of  newly  registered  electric  cars  is  also 
considerably  lower  than  in  some  other  Member 
States (see Annex 8). 

in 

further 

capacity) 

for  solar 

inverters,  for  which  Austria 

development 
Its  manufacturing 

Despite  challenges,  Austria  remains  a  major 
supplier  of  photovoltaics  and  has  potential 
wind 
for 
technologies. 
capacity 
amounts to between 400 and 800 MW/y (2-4% of 
components,  most 
EU 
specifically 
is  a 
competitive exporter (178). Austria also participates 
in several important projects of common European 
interest  (IPCEIs)  related  to  strategic  technologies 
for Europe. Notably, it is also involved in the IPCEIs 
on  microelectronics,  batteries  and  hydrogen  (the 
latter  also  being  supported  through  the  recovery 
and  resilience  plan).  These  are  expected  to 
facilitate  further  research  and  development  and 

(175) Federal Ministry of Economy, Energy and Tourism, 2026, 

Industrial Strategy Austria 2035, Bmwet.gv.at. 

(176) For example: Federal Ministry of Economy, Energy and 

Tourism, 2025, Transformation der Industrie, Bmwet.gv.at 
and Climate and Energy Fund, 2025, FIT-Initiative für die 
Transformation der Industrie, Klimafonds.gv.at. 

(177) Federal Economic Chamber, 2024, Austria’s automotive 

industry, Fahrzeugindustrie.at. 

(178) European Commission, 2025, The net-zero manufacturing 

industry landscape across the Member States, Op.europa.eu. 

(179) European Commission, 2022, Raw Materials Information 

System – Country Profile Austria, Ec.europa.eu. 

(180) Federal Ministry of Finance, 2021, Masterplan Raw Materials 

2030, Bmf.gv.at. 

(181) Federal Ministry of Finance, 2025, Monitoring report, 

Bmf.gv.at. 

(182) Eurostat, 2025, Recycling rate of waste of electrical and 
electronic equipment (WEEE) separately collected, 
Ec.europa.eu. 

62 

 
 
 
Table A5.1:  Single Market and Industry 

Source: (1) Eurostat, (2) EIB Investment Survey, (3) EIF SME Access to Finance Index, (4) Intrum Payment Report, (5) SAFE survey, 
(6) OECD, (7) data up to 2024: Single Market and Competitiveness Scoreboard, 2025: Commission calculation based on TED data, 
accessible at the Public Procurement Data Space (PPDS) (*) the value represented here under EU average is the median, (8) Single 
Market and Competitiveness Scoreboard, (9) European Commission calculations. 

63 

POLICY AREA20212022202320242025EU-27 average116.0119.7118.5117.6115.9100.015.815.415.314.1-12.63.63.43.73.9-3.9Business environment and simplification35.426.130.246.841.034.00.730.700.520.37-0.430.190.120.140.10-0.1911.713.616.613.715.317.411.813.715.418.114.813.6from private entities in the previous or current quarter---42.644.647.1from public entities in the previous or current quarter---16.912.115.938.342.139.337.637.140.70.0630.0620.0620.0620.0620.0502628283627271087121261.9111.21.511.51.21.41.51.71.174.4471.97079.873.384.62927242626250.08750.15130.19710.15390.14050.146230.829.329.2--32.734.634.141.643.0-25.243.041.941.640.9-22.411.212.214.215.2-12.2AustriaINDICATOR NAMEBusiness environment and investmentProductivity and investmentLabour productivity (GDP per hour worked in PPP terms), % of EU271Business investment (share of GDP)1Public investment (share of GDP)1Impact of regulation on long-term investment, % of firms reporting business regulation as a major obstacle2SME liquidityEIF Access to Finance for SMEs index - loans3EIF Access to Finance for SMEs index - equity3Late paymentsPayment gap - corporates B2B, difference in days between offered and actual payment4Payment gap - public sector, difference in days between offered and actual payment4Share of SMEs experiencing late payments, %5Industry and economic securitySingle Market IntegrationEU trade integration, average(intra-EU imports + intra EU exports)/GDP, %1EEA Services Trade Restrictiveness index6Public procurementSingle bids, % of total contractors7*Direct awards, % of negotiated procedures7*ComplianceTransposition deficit, % of all directives not transposed8Conformity deficit, % of all directives transposed incorrectly8SOLVIT, resolution rate per country, %8Number of pending infringement proceedings8Energy-intensive industriesElectricity prices for non-household consumers1Electrification (electricity as a share of total energy consumption in industry)1Share of energy from renewable sources (renewable energy generation as a share of overall energy consumption)1Critical raw materialsMaterial import dependency, %1Circular material use rate1Operational cleantech manufacturing capacity in 20259 - Solar PV (c: cell, w: wafer, M:module), GW0.01 (c ), 0.475 (m) - Electrolyzer, GW- - Heat pump assembly 0.06 - Battery, GW- 
 
 
     
 
ANNEX 6: SAVINGS, INVESTMENT AND ACCESS TO FINANCE 

Table A6.1:  Savings and Investments Union summary diagnostic 

Source: OECD (pensions), Eurostat (households' financial wealth), FISMA CMU dashboard (VC and PE), national sources (capital 
taxation). End-2024. 

from 

for  Austrian 

Austria  could  benefit 
further  progress 
towards  the  policy  goals  of  the  Savings  and 
Investment Union (see Table A6.1) and the reforms 
addressing  elements  of  the  2025  CSR  (183).  The 
funding  model 
non-financial 
corporations  is  mainly  bank-oriented  and  less 
capital  market-intensive  than  for  EU  peers.  The 
capital  markets  remain  comparatively  small  in 
terms  of  capitalisation  and  volumes  traded.  The 
degree  of  direct  retail  investment  in  Austria’s 
capital  markets  is  low.  Austrian  households  have 
financial  portfolio  profiles  with  very  low  risk. 
Institutional  investors  in  Austria  have  only  limited 
into 
funds  and  capacity  to  channel  savings 
investment  and 
to  support  capital  market 
development.  Participation  and  assets  under 
management  in  the  occupational  and  private 
pension  segments  can  be  further  supported  by 
elements  such  as  auto-enrolment  in  pillar  2  and 
introducing further tax incentives to pillar 2 and 3 
pension  schemes.  The  domestic  venture  and 
growth capital markets are not yet fully developed 
to meet all the financing needs of innovative firms, 
notably of scale-ups.  

(183) ‘Promote  business  dynamism,  and  the  creation  and  growth 
of young companies, including by providing better access to 
venture and growth capital and removing barriers hindering 
investment 
equity 
instruments.’ 

institutional 

investors 

from 

in 

Business landscape and company 
funding 

in  terms  of  structure  and  size,  the  Austrian 
economy  is  less  reliant  on  micro  companies 
than  the  EU  average.  Small, medium  and  large 
companies play a stronger role in the structure of 
the economy, at the expense of micro enterprises 
(184).  This  has  implications  for  the  corporate 
sector’s demand for and access to funding, which 
are discussed in this annex.  

Graph A6.1: Composition of non-financial 
companies' funding 

Source: Eurostat. End-2024. 

Austrian  companies  rely  more  on  internal 
and bank funding and less on capital markets 
than the EU average. As of 2024, Austrian non-
financial  corporations  (NFCs)  relied  slightly  more 

(184) See Annex 5 for more details. 

64 

050100150200250ATEU% of GDPLoansTrade credit and advancesBondsListed sharesUnlisted sharesOther equityMain featuresRelative EU positioningAssets at 7.2% of GDP (32.3% in the EU)10-year real return of -0.1 (1.4% in the EU)The very low pension assets yield a negative real return.EUR 98 778 per capita (EUR 85 090 in the EU)o/w 9.1% in listed shares and bonds (7.6% in the EU)o/w 11.7% in investment funds (11.0% in the EU)o/w 7.2% in life insurance (13.4% in the EU)o/w 7.8% in  pension claims (13.6% in the EU)Substantial household wealth invested to a similar degree as EU peers in listed shares, bonds and investment funds.VC at 0.029% of GDP (0.064% in the EU)PE at 0.255% of GDP (0.487% in the EU)Moderate venture capital and private equity investments.Capital gains tax for individuals at 27.5%, capital income and capital gains tax for companies tax of 23%. No preferential tax treatment for equity investments, average rates of capital taxation.1-34-1011-1718-2425-27Colours indicate the country's relative ranking based on five groups, ranging from the three best to the three worst performers. The relative ranking as regards an SIU diagnostic topic derives from a consistent cross-country comparison, the starting point of which is the average of the underlying main features.TopicAsset-backed pension schemesHouseholds' financial assetsVenture capital (VC)Private equity (PE)Capital taxation 
 
 
 
   
 
 
 
     
 
 
 
multinational  companies  (with  annual  revenues 
above EUR 1 bn). NFCs accounted for around 63% 
of that capitalisation, which implies that the stock 
market  in  Austria  is  to  a  large  extent  geared 
towards funding the non-financial segment of the 
real  economy.  The  outstanding  volume  of  debt 
securities  reached  124.7%  of  GDP  at  end-2024, 
slightly below the EU average (at just below 140% 
of  GDP).  Bonds  by  the  government  and  monetary 
financial  institutions  (MFIs)  accounted  for  56% 
and 35% of the total. 

Graph A6.2: Capital markets and financial 
intermediaries 

on  loans  (62.3%  of  total  liabilities)  than  the  EU 
average (60.8%) and significantly less on market-
based instruments such as listed shares (14.5% vs 
42.5%)  and  bonds  (7.2%  vs  10.7%,  see  Graph 
A6.1).  Trade  credit  also  accounted  for  a  smaller 
share  in  Austria  (6.6%  vs  8.9%).  Austrian  firms 
made  greater  use  of  other  equity  (68.7%  vs 
47.8%).  According  to  the  2025  EIB  Investment 
Survey  (185),  only  13%  of  Austrian  firms  believed 
that their investment activities over the last three 
years  were  less  than  needed,  slightly  worse  than 
the  EU  average  for  perceived  underinvestment 
(12%),  suggesting  a  low  financing  gap  relative  to 
investment demand. However, this may not be the 
case  for  firms  with  limited  capacity  for  internal 
funding,  such  as  micro,  small  and  medium 
enterprises or innovative start-ups and scale-ups. 

Size and structure of the financial 
sector 

loan  demand,  higher 

While the financial sector in Austria remains 
dominated  by  banks,  non-bank  financial 
intermediaries  also  play  an  important  role. 
Amidst subdued 
interest 
rates  and  weak  economic  activity,  starting  from 
253%  of  GDP  in  2020,  the  size  of  the  banking 
sector  gradually  declined  to  just  above  209%  of 
GDP in 2024, below the EU average of 251%. The 
two largest banking groups (Erste Group Bank and 
Raiffeisen  Bank 
International)  have  extensive 
activities  in  central,  eastern  and  south-eastern 
Europe.  The  insurance  and  pension  funds  sectors, 
with  total  assets  of  around  27%  of  GDP  and  6% 
of GDP at end-2024, play a lesser role in non-bank 
intermediation.  By  contrast,  investment  funds, 
total  assets  dropped  by  10 
though 
percentage points to around 47% of GDP between 
2021 and 2024, remain sizeable. 

their 

The  Austrian  economy  features  one  of  the 
comparatively  smaller  domestic  capital 
markets in the  EU.  The market  capitalisation  of 
listed  equity  stood  at  28%  of  GDP  at  the  end  of 
2024 (see Graph A6.2), which is well below the EU 
average  of  67%  of  GDP.  The 
low  market 
capitalisation could be due to the characteristics of 
the  Austrian  corporate  sector,  in  particular  the 
large  globally  operating 
small  number  of 

(185) See European Investment Bank’s 2025 Investment Survey. 

65 

Source: ECB, EIOPA, AMECO. End-2024. 

In  2025,  Austria’s  capital  markets  recorded 
strong  growth  in  terms  of  capitalisation, 
listings and volumes traded. Capital markets in 
Austria  have  weathered  the  global  geopolitical 
turmoil, the energy crisis and trade policy tensions 
well.  In  2025,  the  Austrian  Traded  Index  (ATX) 
increased by almost 50%, positioning 2025 as the 
third  strongest  trading  year  since  2012.  The  total 
market capitalisation of Austrian-listed companies 
on  the  Vienna  Stock  Exchange  reached  around 
(36%  of  GDP),  supported  by 
EUR 177 billion 
continued  growth 
in  both  equity  and  debt 
segments.  However,  the  use  of  bonds  by  SMEs  is 
relatively moderate, as just 2% of SMEs indicated 
in  the  2025  SAFE  survey  that  debt  securities 
issuance  was  relevant  for  them,  compared  to  an 
EU  average  of  3%.  This  makes  debt  market 
finance  a  minor  source  of  funding  for  Austrian 
SMEs. 

Non-financial corporationsFinancial corporationsNon-financial corporationsMFIsInsurance  and pension fundsOther financialsGovernmentMFIsPension fundsInsurance corporationsInvestment funds050100150200250   Listed equity               Bonds                        Assets by sector% of GDP 
 
   
Households’ participation in capital 
markets 

Graph A6.3: Composition of households' financial 
assets 

ownership 
in 

is 
represents 
terms  of  volume 

The  degree  of  direct  retail  investment  in 
low.  Main 
Austria’s  capital  markets 
the  most 
residence 
for 
important  asset 
homeowners.  Austrian  households  have  financial 
portfolio  profiles  with  very  low  risk.  As  of  end-
2024, aggregate household financial assets stood 
at 183% of GDP, below the EU average of 212%. 
Austrian households’ investments in insurance and 
pension  funds,  relative  to  GDP,  were  only  half  as 
large as the EU average in 2024, underscoring the 
long-term  savings 
modest  development  of 
instruments 
In 
addition,  listed  and  unlisted  share  holdings  were 
three times lower than the EU  average (10.5% of 
GDP  in  Austria,  compared  with  32.7%  of  GDP  in 
the  EU).  At  the  same  time,  Austrian  households’ 
other  equity  holdings  (42.8%  of  GDP)  and  bonds 
(7.4%  of  GDP)  were  above  the  EU  averages  of 
24.2% and 5.9% of GDP, respectively. 

(see  Graph  A6.3). 

in  Austria 

The  comparatively  strong  saving  rate  of 
Austrian  households  (17.3%  in  2024,  above 
the EU average of 14.5%) and the high share 
of  cash  and  deposits  in  household  assets 
(38.7%)  suggest  there  is  some  room  to 
increase  the  level of  direct or  indirect  retail 
investments.  In  Austria,  interest  from  standard 
savings  and  current  accounts  is  taxed  at  25%, 
while  most  other  investment  income  (dividends, 
interest on bonds, capital gains) is taxed at 27.5%. 
Developing  a  simple,  standardised  Savings  and 
Investments  Account  (SIA)  could  add  value  by 
streamlining 
retail 
investments and enhancing transparency and ease 
of  use  for  households  (186).  Austria  makes  limited 
use  of  tax  breaks  for  long-term  investments  or 
targeted  tax  relief  for  retail 
in 
domestic SMEs/start-ups.  

treatment  of 

investments 

the 

tax 

Source: Eurostat. End-2024. 

received  and 

Financial  literacy  in  Austria  is  overall  slightly 
above  the  EU  average,  but  some  challenges 
remain.  Recent  surveys (187)  show  that  28%  of 
Austrians  have  a  high  level  of  financial  literacy, 
50%  a  medium  level,  and  the  remaining  22%  a 
low level, compared to the EU average of 26% for 
high  literacy,  50%  for  medium,  and  24%  for  low. 
Austria’s results are above the EU average for the 
use  of  digital  financial  services,  trust  in  the 
investment  advice 
retirement 
planning.  The  national  financial  literacy  strategy 
for Austria was launched (188) in autumn 2021 and 
was  included  in  Austria’s  recovery  and  resilience 
plan  (RRP).  Its  four  main  policy  priorities  aim  to 
develop  sound  financial  decision-making  and 
prevent  over-indebtedness,  promote  responsible 
financial  planning,  ensure  access 
to  quality 
financial education and increase the effectiveness 
the 
of 
implementation  period  2021-2026,  the  strategy 
also  includes  two  competence  frameworks  for 
better financial education. 

initiatives. 

financial 

literacy 

For 

The banking sector: resilience and 
financing of the economy 

resilience 

The banking sector is well-capitalised, shows 
good 
is  not 
constrained 
its  role  of  funding  the 
economy.  The  system-wide  capital  ratio  stood  at 

risks,  and 

to 

in 

(186) In line with EU Recommendation 2025/2029 on increasing 
the availability of savings and investment accounts with 
simplified and advantageous tax treatment. 

(187) Monitoring the level of financial literacy in the EU, 2023. 

(188) See A national financial literacy strategy for Austria. 

66 

050100150200250020406080100120ATEUATEUper capita (000 EUR) (lhs)% of GDP (rhs)Currency and depositsInsurance and pension fundsInvestment fundsBondsListed sharesUnlisted sharesOther equityHH Debt (liability) 
 
   
 
21.8% in Q3-2025, slightly above the EU average 
(see Table  A6.2).  In the same period, the Austrian 
banking  sector  reported  a  consolidated  Common 
Equity Tier 1 (CET1) ratio of 18.4%, above the EU 
average 
(of  16.8%)  and  more  than  double 
compared  with  levels  recorded  before  the  global 
financial  crisis  of  2008-2009,  in  line  with  tighter 
prudential 
(Minimum 
requirements.  MREL 
Requirement for Own Funds and Eligible Liabilities) 
and  the  combined  buffer  requirement  in  addition 
to  MREL,  comfortably  exceed  all 
regulatory 
requirements (189). According to the 2025 EU-wide 
stress  tests  by  the  EBA  and  the  ECB  (190),  the 
Austrian  banks  included  fared  slightly  better  than 
the  EU  aggregate,  as  they  had  a  comparatively 
smaller  negative 
the  adverse 
scenario.  Banks’  balance  sheets  deteriorated  as  a 
result  of  the  prolonged  economic  downturn  from 
late 2022 into 2024, but overall show robust asset 
quality.  The  aggregate  non-performing  loan  (NPL) 
ratio stood at 2.4% in Q3-2025, slightly above the 
EU  average  of  1.9%.  However,  the  banks’  asset 
quality outlook is subject to increased uncertainty 
due  to  the  current  geopolitical  conflicts  and  the 
impact on energy prices and economic growth. 

impact  under 

Credit  demand  continued  to  show  signs  of 
recovery  over  the  course  of  2025.  Increased 
affordability  supported  demand  by  households, 
especially  in  residential  real  estate  loans.  For 
NFCs,  annual  credit  growth  recovered  to  2.4%  in 
December  2025  (from  1.7%  at  the  end  of  2024) 
but remained markedly below the pre-2023 rates. 
Estimated 
liabilities  have  been 
increasing since the middle of 2023, accompanied 
by  the  comparatively  limited  number  of  business 
registrations.  Fixed  investment  was  still  sluggish 
amid 
and 
economic 
insolvencies  in  the  construction  and  real  estate 
sectors weighed on banks’ credit quality.  

uncertainty, 

insolvency 

ongoing 

(189) See the European Banking Authority’s MREL Dashboard – Q2 
2025 and the Financial Market Authority’s Information about 
the implementation of an external bail-in.  

Role of non-bank financial 
intermediaries 

Institutional  investors  in  Austria  have  only 
limited  funds  and  capacity  to  channel 
savings  into  investment  and  to  support 
the 
capital  market  development.  Given 
country’s  strong  income  growth  in  recent  years 
and  strong  household  saving  rate,  the  financial 
industry has the potential to increase assets under 
management.  However,  the  role  of  domestic 
institutional  investors  in  deepening  the  capital 
market has so far remained limited. This is due to 
the  heavy  reliance  on  the  state-run  (pay-as-you-
go)  first pillar, which accounts for around 90% of 
include  a 
pension 
conservative 
regulatory 
constraints, and market volatility in recent years.  

financing.  Other 
investment 

factors 
culture, 

In terms of total assets, the insurance sector 
in Austria is relatively small compared to EU 
peers,  with  life  insurance  remaining  by  far 
the  smallest  segment.  The  Austrian  insurance 
market  is  traditionally  dominated  by  composite 
insurance  undertakings  which,  besides 
life 
insurance,  also  pursue  activities  in  at  least  one 
other balance sheet group, i.e. health insurance or 
non-life  and  accident  insurance.  Similarly  to  the 
the  main  Austrian 
largest  banking  groups, 
important 
insurance  undertakings  have  an 
international footprint. As of Q3-2025, total assets 
stood at 27% of GDP, which is lower than the EU 
average  of  53.9%.  As  of  Q3-2025,  insurers’ 
solvency ratio of almost 302% was above the EU 
average  of  249%.  In  2024,  the  profitability  of 
Austrian insurance companies improved compared 
to 
Index  clauses  widely 
embedded  in  insurance  contracts  led  to  higher 
income  and  mitigated  claim  cost 
premium 
inflation. 
insurance 
In  2024,  the  sector-wide 
premiums  increased  by  5.3%  compared  to  the 
previous year, to EUR 21.4 billion. Austria is among 
the  Member  States  with  relatively  contained 
insurance-protection gap for natural hazards (191). 

the  previous  year. 

The  insurance  sector  in  Austria  holds  a 
substantial  part  (almost  82%)  of  assets  in 
debt  securities,  investment-fund  shares  and 
equity.  The  insurance  sector  is  focused  on  non-

(190) For further details, see the results of the 2025 EU-wide 

(191) See EIOPA’s Dashboard on the insurance-protection gap for 

stress test exercise, August 2025. 

natural catastrophes. 

67 

 
 
 
life  business  whose 
liability  structure  overall 
disfavours  asset  allocation  into  equity  and  other 
long-term  and  high-yield  assets. 
Insurance 
companies in Austria mainly invest in government 
and  corporate  bonds  as  their  main  assets  (at 
29.7% of total assets as of Q3-2025, compared to 
36.2%  for  the  euro  area  as  a  whole) (192),  while 
investment-fund  shares 
represent  a  slightly 
smaller  portion  of  their  portfolio  (28.6%).  The 
combined  share  of  assets  connected  to  domestic 
banks  and  the  Austrian  government  has  steadily 
decreased  over  the  years  and  has  almost  halved 
since  2016.  Austrian  insurers  hold  a  larger  share 
of their assets (23.3%) in equity compared with EU 
peers (14.9% on average).  

for 
securities 

The  growing  fund  management  industry  in 
Austria tends to invest less in equity than its 
EU  peers.  At  the  end  of  2024,  there  were  14 
investment-fund  management  companies  and  62 
alternative  investment-fund  managers  in  Austria, 
total  of  887 
which  have  established  a 
undertakings 
in 
investment 
collective 
transferable 
(UCITS)  and  1 212 
alternative  investment  funds  (AIFs).  This  was  an 
increase  by  25  funds  since  the  end  of  2023.  In 
2024,  Austrian  investment-fund  industry  assets 
grew  by  around  8%  to  EUR  230.7 billion.  At  the 
end  of  2024,  of  the  assets  invested  in  domestic 
and  foreign  investment  funds  offered  in  Austria, 
37.8% were allocated to debt securities, 32.4% to 
investment-fund  units  and  22.9%  to  shares  and 
other  equity  (193). 
In  2024,  asset  managers 
allocated about 61% of assets to equity and bond 
holdings, just below the euro area average. 

Asset-backed  funded  pensions  remain  small 
and  fail  to  deliver  a  significant  long-term 
average real return. Austria’s pension system is 
largely pay-as-you-go, with limited contribution to 
equity investment and the development of capital 
markets  (194).  The  government  funding  gap  of the 
pay-as-you-go  public  pension  system  has  been 
steadily increasing.  At the  same  time,  Austria  has 
one of the highest net replacement rates in OECD 
countries, which further increases the pressure on 
the  pension  system.  Total  pension  assets 
amounted to only 7.2% of GDP in 2024 (vs 32.3% 

(192) Assets and liabilities of insurances | ECB Data Portal.  

(193) Assets and liabilities of investment funds | ECB Data Portal.  

in  the  EU).  The  domestic  private  pension  fund 
industry  invests  predominantly  in  bills  and  bonds, 
which  account  for  around  28%  of  pension  funds’ 
total  assets.  Equities  holdings  stood  at  25%,  just 
below the EU average. Over the past 10 years the 
average real return generated by Austrian pension 
funds  has  been  very  low  (-0.1%  vs  1.4%  in  the 
EU),  largely  because  of  low  equity  exposure  high 
inflation,  strict  capital  guarantee  requirements, 
rights  and  significant 
short-term  withdrawal 
market  volatility  (particularly  in  2022  and  2018). 
Incentives  for  long-term  pension  savings  remain 
weak.  Austria  has  no  system  of  auto-enrolment 
(195).  Despite 
demographic 
challenges,  participation  in  both  occupational  and 
private  pensions  in  Austria  is  low,  suggesting 
scope for introducing a formal nationwide pension 
tracking  system  that  consolidates  all  pension 
sources  in  one  place  for  individuals  and  could 
increase  awareness  about  pension  entitlements. 
Work on such a tool was interrupted in 2021.  

long-term 

the 

Venture capital ecosystem 

to 

sufficiently  developed 

The venture and growth capital market is not 
support 
yet 
financing  of  innovative  firms.  The  number  of 
start-ups  in  Austria  remains  high.  A  key  barrier 
hindering  firms’  innovation  performance  is  the 
shortage  of  venture  and  growth  capital,  including 
angel funding and formal VC (venture capital). The 
average value of annual private equity investment 
relative  to  nominal  GDP  went  up  to  0.3%  in  the 
period 2022-2024 from 0.12% in 2019-2021, but 
it  is  still  well  below  the  equivalent  EU  average 
(0.5%).  For  VC,  investments  declined  to  0.03%  of 
in  2022-2024 (196),  well  below  the  EU 
GDP 
average of 0.06% (197). 

Recent  surveys  among  entrepreneurs  show 
that  start-up  funding  in  Austria  remains 
difficult to obtain, notably as regards larger 
growth  financing  rounds.  Acquiring  capital 

(195) In line with the EU Recommendation 2025/2384 on pension 
tracking systems, pension dashboards and auto-enrolment. 

(196) See also Annex 4: “Innovation to Business” that uses 

InvestEurope data. The “Savings, Investment and Access to 
Finance” Annex uses CMU Dashboard data. 

(194) See the Country profiles by the OECD and the Country fiches 

of the Ageing Report by the European Commission. 

(197) Commission staff working document: Monitoring progress 
towards a capital markets union: a toolkit of indicators. 

68 

 
 
 
Table A6.2:  Financial sector indicators 

(1) Annualised data. EU data for credit growth and pension funds refer to the EA average. 
Source: ECB, Eurostat, European Insurance and Occupational Pensions Authority, DG FISMA CMU dashboard, AMECO. 

funding 

in  Austria (199),  as 

remains among the three top  challenges to start-
ups (198). Debt-financing is difficult for young firms 
seeking  to  grow  quickly,  particularly  for  start-ups 
focusing on R&D and specialising in tech-intensive 
activities.  In  2025,  there  was  sharp  decline  in 
total 
start-up 
investment  volume  fell  by  approximately  56%  to 
EUR 253 million,  marking  the  fourth  consecutive 
annual  decline  and  the  lowest  level  since  2019. 
The number of financing rounds in 2025 stood at 
148,  at  a  similar  level  to  2024,  but  the  average 
financing volume fell to EUR 2.3 million per round, 
down 
in  2024  and 
EUR 11.6 million  in  the  peak  year  2021.  The 
growth-stage  segment  was  particularly  affected. 
While 
follow-on 
and 
investments  are  more  stable,  there  is  a  growing 
shortage  of  larger  growth  financing  rounds.  This 
hampers  the  scaling  and  internationalisation  of 
start-ups and scale-ups. 

from  EUR 4.3 million 

early-stage 

smaller 

Limited VC financing is partly driven by very 
low  participation  of  institutional  investors, 
including  pension funds.  A  2024  paper  showed 
in  Austria  accounted  on 
that  pension  funds 
average for only 1% of PE (private equity) and VC 
funds  raised  annually  over  2007-2023,  a  figure 
that  falls  substantially  below  the  EU  average  of 

(198) See the WKÖ Start Up Monitor. 

(199) See the EY Start-up Barometer for 2025. 

69 

15%  (200).  In  December  2025,  the  authorities 
launched  consultations  on  a  draft  bill  to  reform 
the  Pension  Funds  Act  (PKG)  and  the  Insurance 
Supervision  Act  (VAG).  The  reform  envisaged 
raising the limits for equity and alternative assets 
and  lowering  capital  requirements  for  long-term 
equity  investments.  Further  measures  to  address 
the  low  participation  of  institutional  investors, 
including  pension  funds,  could  focus  on  more 
favourable taxation of both corporate income and 
capital  gains  and  on  streamlining  taxation  of 
carried interest. 

recommendations 

Austria  has  taken  measures  to  address  the 
country-specific 
on 
providing  better  access  to  venture  and 
growth  capital.  In  June  2023,  a  new  state-
financed  VC  fund  (Gründungsfonds  II:  Start-up 
Fund)  was  set  up  for  at  least  10  years.  The  fund 
provides  state  funding  up  to  EUR 72 million  for 
investments  in  young,  innovative,  Austria-based 
companies  in  the  start-up  and  growth  phase  and 
was  intended  to  leverage  private  investments  of 
up  to  EUR 500 million.  However,  this  funding 
remained relatively small in scale, compared to EU 
peers.  The  government  has  announced 
the 
establishment  of  a  new  Start-up  and  Scale-up 
Dachfonds  (fund-of-funds),  which  is  expected  to 
become  operational  by  early  2027,  with 

(200) Source: Closing the gaping hole in the capital market for EU 

start-ups – the role of pension funds – CEPS. 

20182019202020212022202320242025-Q3EUTotal assets of MFIs, % of GDP219.1220.4253.4246.2226.1211.8209.1201.6246.1Common equity Tier 1 ratio15.415.616.116.016.517.617.918.416.8Total capital adequacy ratio18.618.719.519.319.420.621.121.820.2Overall NPL ratio, % of all loans2.62.22.01.81.82.22.42.41.9NPL ratio, loans to NFCs3.63.13.12.92.83.64.54.33.5NPL ratio, loans to HHs3.32.82.62.32.12.32.22.22.1Return on equity ratio18.67.84.16.49.711.69.49.09.6Loans to NFCs, % of GDP39.941.244.645.444.743.042.341.129.3Loans to HHs, % of GDP42.342.745.945.342.439.237.536.443.6NFC credit growth rate, %7.16.14.98.49.02.71.72.22.5HH credit growth rate, %3.64.33.65.03.5-1.9-0.90.92.6Stock market capitalisation, % of GDP29.631.931.939.728.930.028.333.669.9Initial public offerings, % of GDP0.000.070.000.000.000.000.00-0.06Market funding ratio34.032.734.432.329.529.329.5-49.7Private equity, % of GDP0.1470.1570.1420.1210.1430.2340.255-0.487Venture capital, % of GDP0.0210.0220.0210.0720.0790.0780.029-0.064Financial literacy, composite index-----47.5--45.5Bonds, % of HHs' financial assets4.54.13.52.92.63.44.0-2.8Listed shares, % of HHs' financial assets3.43.94.14.94.65.05.1-4.8Investment funds, % of HHs' financial assets8.79.69.610.810.310.911.7-11.0Insurance/pension funds, % of HHs' financial assets19.920.519.518.115.715.715.5-27.8Total assets of insurers, % of GDP34.835.037.135.828.427.627.027.053.9Pension assets, bn EUR---34.931.032.935.5-5813.8Pension assets, % of GDP---8.66.96.97.2-32.310y real return average of pension assets, %------0.1-0.1-1.4Pension funds assets, ECB (% of GDP)-6.26.76.75.65.65.95.823.01-34-1011-1718-2425-27Colours indicate performance ranking among the 27 EU Member States.Banking sectorNon-banking sector 
 
 
 
   
 
public 

investments  of  up 

anticipated 
to 
EUR 100 million,  with  the  goal  to  reach  a  total 
fund  volume  between  EUR 300-500 million  by 
attracting private institutional investment.  

Austria’s  RRP  also  includes  measures  to 
support  the  financing  of  start-ups.  Reform 
measures  included  recognising  a  new  type  of 
company  for  investments  in  company  holdings  in 
the  form  of  an  SICAV  (société  d’investissement  à 
capital  variable),  a  collective  investment  scheme 
that  is  already  well  established  in  other  EU 
Member  States.  The  scheme  is  intended  to  make 
fund  shares  tradable,  while  also  taking 
into 
account  high  transparency  standards,  investor 
protection,  money  laundering  prevention  and  the 
exclusion  of  tax  structuring  models.  As  an 
additional  measure,  the  start-up  package 
in 
Austria’s  RRP  aims  to provide  sustainable  support 
to  growth-oriented  start-ups  and  to  increase  the 
location 
the 
attractiveness 
internationally. The reform introduced a new legal 
form, tailored to start-ups and innovative SMEs. 

business 

of 

70 

 
ANNEX 7: EFFECTIVE INSTITUTIONAL FRAMEWORK 

trust  built  on 

institutional  framework 

An  effective 
is 
essential  for  competitiveness.  This  requires 
public 
integrity,  high-quality 
legislation,  regulatory  simplification  and  efficient 
services  for  people  and  businesses.  The  country-
specific  recommendations  (CSRs)  highlighted  the 
need 
reduce 
administrative  burden  on  companies’  (2025),  and 
‘to simplify and rationalise fiscal relationships and 
responsibilities  across  layers  of  government  and 
ensure financing and spending responsibilities are 
clearly aligned’ (2024).  

regulation  and 

‘simplify 

to 

in regional and local authorities, followed by trust 
in  the  justice  and  legal  system  (72%).  Trust  in 
central government (48%) increased from a 2023 
low  until  spring  2025  (see  Graph  A7.1).  Both 
businesses  (78%)  and  the  public  (80%)  retain 
confidence in the ability of public administration to 
handle their data securely and responsibly (202). 

Quality of lawmaking and 
implementation 

To  address  the  2025  CSRs,  in  December 
2025,  the  Austrian  government  adopted  a 
comprehensive de-bureaucratisation package 
(201)  containing  113  measures  covering 
federal,  state  and  municipal  constituencies. 
The  package  was  aimed  at  people,  business  (see 
Annex 5) and administration. As it stands, there is 
no dedicated implementation plan.  

Public trust 

Graph A7.1: Trust in the justice system, regional / 
local authorities and in governments 

the  Federal  Chancellery.  Checks 

Austria  has  a  comprehensive  regulatory 
quality  system,  assessing  a  broad  range  of 
impacts.  Regulatory  impact  assessments  (RIAs) 
are mandatory for all primary laws and secondary 
regulations. A threshold test determines whether a 
simplified  or  full  RIA  is  required.  This  applies  to 
approximately  two  thirds  of  cases,  enabling 
proportionate analysis while maintaining oversight 
by 
include 
environmental,  social,  gender  equality,  digital 
impact.  Costs  for  people, 
readiness  and  AI 
business and the public sector are also covered by 
the checks. In 2025 Austria adopted an RRF reform 
introducing  a  mandatory  ‘climate  check’  for  new 
on 
legislative 
competitiveness  and  regions  are  carried  out  only 
for  certain  types  of  proposal.  Austria  does  not 
systematically use either tools for effective policy 
for  assessing 
(for  example, 
implementation 
potential enforcement mechanisms) or procedures 
for  measuring  progress 
(see  Table  A7.1). 
Assessment  of  compliance,  sector  reviews  for 
recasting  and  consolidation  of  regulation  are 
rare(203). 

proposals. 

Impact 

checks 

Transparency  of  the  legislative  process  is 
good,  but  stakeholder  involvement  in  legal 
drafting  is  inconsistent.  All  draft  primary  laws, 
their  RIAs  and  accompanying  information  are 
published  on  the  Parliament  website  (204)  where 
the  public  can  submit  comments.  However, 
stakeholder involvement and RIAs encompass only 
those  initiated  by  the  executive,  which  accounts 
for  just  37%  of  all  primary  laws.  The  scope  and 

(202) European Commission, 2026, Flash Eurobarometer surveys 
567 and 568 on satisfaction with administrative services. 

(203) OECD, 2025, Better Regulation Practices across the European 

Union 2025, https://doi.org/10.1787/6f007516-en.  

(204) Parlament Österreich, Beteiligen | Parlament Österreich. 

(1)  EU-27 since 2019; EU-28 before 
Source: European Commission, Standard Eurobarometer 
survey. 

Public trust in institutions in Austria is above 
the  EU  average.  In  2025,  trust  is  highest  (76%) 

(201) Bunderskanzleramt, Bundesregierung: 

Entbürokratisierungspaket macht den Staat einfacher - 
Bundeskanzleramt Österreich. 

71 

00.10.20.30.40.50.60.70.80.9AutumnSpringAutumnSpringAutumnSpringWinterSummerWinterSpringWinterSummerAutumnSpringAutumnSpringAutumnSpring202520242023202220212020201920182017Justice,  legal system EU-27Justice,  legal system ATRegional or local public authorities EU-27Regional or local public authorities ATGovernment  EU-27Government  AT 
 
     
 
 
 
 
Table A7.1:  Austria. Selected indicators on better regulation practices for primary legislation 

Source: OECD, 2025, Regulatory Policy Outlook 2025 [https://doi.org/10.1787/56b60e39-en] and Better Regulation across the 
European Union 2025.    

Public service delivery and 
digitalisation 

Graph A7.2: Most time-consuming aspects of 
service delivery 

Source: European Commission, 2026, Flash Eurobarometer 
surveys 567 and 568 on satisfaction with administrative 
services. 

Satisfaction  with  public  administration 
services  in  Austria  is  high  and  digitalisation 
has had a positive impact. Public perception of 
administration  as  complex  and  burdensome 
decreased by 10 percentage-points between 2023 
and  2025.  73%  of  businesses  and  72%  of 
members of the public reported that digital public 
services saved them time and effort. At the same 
time,  25%  of  businesses  had  not  detected  any 

control  of  public 

to 
quality 
subordinate regulations is limited, especially at the 
level of Länder (the nine provinces of Austria).  

consultations 

and 

process 
regulatory 
Institutional, 
fragmentation continues to hamper efficient 
industrial  permitting.  Delays  often  accumulate, 
due  to  a  combination  of  i)  nine  separate  building 
codes, ii) strong third-party participation rights, iii) 
fragmented  municipal  capacity,  and  iv)  sequential 
EIA  and  permit  processes.  While  there  were 
process  improvements  for  large  scale  projects 
(AVG  of  2023(205),  if  Austria  is  to  meet  its  two-
year  target  under  Renewable  Energy  Directive  III 
(see  Annex  5)  in  terms  of  permitting  efficiency, 
institutional 
reform  and  systematic  use  of 
international  good  practice  standards  would  be 
beneficial(206) . 

(205) Applications and goals - Federal Ministry of Agriculture and 
Forestry, Climate and Environmental Protection, Regions and 
Water Management. 

(206) including: risk-based tiering with a light or notification-only 
track for simple projects; single-window coordination across 
agencies; clear statutory deadlines with tacit approval or 
financial penalty provisions, if deadlines are missed; strong 
digital case management; and a shift of some technical 
compliance verification to accredited private professionals 
rather than overloaded public authorities. 

72 

0%10%20%30%40%50%Time forresponsesDocumentspreparationApplicationformsApplicationformsEnsuringcomplianceand reportingDocumentspreparationPeopleBusinessesEUTools for smart legislation: Share of possible impacts assessed for all primary laws when developing legislation 1Regulators are required to identify and quantify the benefits of a new primary law1Regulators are required to identify and assess the impacts of alternative non-regulatory options0Tools for effective implementation: when developing laws, regulators are required to:Assess the level of compliance0Identify and assess potential enforcement mechanisms0Specify the methodology of measuring progress in achieving the law's goals0Oversight of better regulation: There is an external  body responsible for reviewing the quality of RIAs and of ex post evacuations 1There are publicly available assessments of the effectiveness of RIA in modifying regulatory proposals 1There are reports on the level of compliance by government department with the requirements of RIA1There are indicators on the percentage of ex post evaluations that comply with guidelines0The effectiveness of ex post evaluations in improving the regulatory stock has been assessed in the last five years1 
 
     
 
     
 
Table A7.2:  Digital Decade key performance indicators: availability of digital public services 

(1) Digital Decade target by 2030: 100. (2) Publishing year, data was collected in the previous year 
Source: European Commission, State of the Digital Decade report 2025 

people  and  businesses  will  no  longer  have  to 
search  for  their  data  or  download  and  upload 
documents manually across e-government portals 
in  different  Member  States.  The  Austrian 
authorities  have  yet  to  identify  the  types  of 
documents  and  data  they  need  to  exchange 
through the system and explore ways to shift from 
the submission of unstructured to structured data 
formats. Austria has authority registries connected 
in  the  areas  of  population,  business  and  vehicles. 
Several  authorities  remain  unconnected  to  the 
OOTS,  thereby  limiting  cross-border  exchanges 
and cooperation on related EU-wide projects. 

Civil service 

for  professionalism  and 

Austria's  civil  service  has  a  long-standing 
reputation 
is 
investing  in  developing  digital  capability.  All 
new 
initial 
recruits  undergo  comprehensive 
training,  building  on  their  previous  qualifications. 
The federal civil  service  is currently training 1453 
apprentices, making it one of the largest providers 
of  apprenticeship  training  in  the  country.  The 
Austrian  School  of  Government 
(ASG)  has 
three  main  pillars  of  civil-service 
proposed 
transformation 
leadership, 
training: 
[operating  a  digital-minded  service]  and  better 
regulation.  At  the  same  time,  building  leadership 
skills  to  underpin  the  digital  transformation  of 
government remains a challenge.  

digital 

Civil service fragmentation across territorial 
entities  limits  mobility  and  agility.  Due  to 
decentralised,  dispersed  responsibilities,  there  is 
no  standardised  or  centrally  defined  skills  profile 
in  place  for  top  civil  servants.  The  current  rigid 
employment  law  undermines  the  creation  of  a 
consistent  civil-service  regulation  covering  the 

benefits  from  digital  public  services.  10%  of 
people had never used digital public service (207). 

The  availability  of  digital  public  services  to 
people  remained  at  the  EU  average  and  for 
business  the  rate  exceeded  the  EU  average 
(Table  A7.2).  The  availability  of  electronic  health 
records  has  fallen  slightly  but  remains  above  EU 
average. As of December 2025, Austria had more 
than  4.8 million  eID  Austria  registrations,  more 
than 10 million monthly eID logins and more than 
500  applications  that  can  be  accessed  with  eID 
(208).  The  ID  Austria  system  provides  seamless 
single sign-in across services, and the country has 
implemented  sophisticated  features  such  as 
electronic mandates and the ID Austria mobile app.  

‘no-stop 

shop’ 
Austria  has  pioneered 
approaches,  including  automatic  employee 
tax assessments that eliminate the need for 
people  to  file.  The  Digital  Austria  platform 
integrates digitalisation efforts across sectors and 
administrative entities, benefiting people, business 
and  administration.  However,  in  practice,  many 
daily  services,  especially  at  municipal  level,  are 
still paper-based or only partly digitalised. 

Austria  has  enabled  data  and  documents 
between  authorities  through  the  EU  once-
only  technical  system  (OOTS)(209).  As  once 
only-enabled  services(210)  become  accessible, 

(207) European Commission, 2026, Flash Eurobarometer surveys 
567 and 568 on satisfaction with administrative services. 

(208) Bunderskanzleramt, 

https://www.bundeskanzleramt.gv.at/bundeskanzleramt/nachr
ichten-der-bundesregierung/2025/12/id-austria-servicetour-
zeigt-erfolg.html. 

(209) European Commission, Once-Only Technical System 

Acceleratormeter, Ec.europa.eu. 

(210) Procedure types under Annex II of the 

SDGR (2018/1724/EU) and directives 2005/36/EC, 
2006/123/EC, 2014/24/EU and 2014/25/EU. 

73 

EU-272023202420252025788181828383888688888783Digital public services for businesses (0 to 100)Access to electronic health records (0 to 100)Digital public services for citizens (0 to 100)Austria 
 
 
   
 
federal, state and municipality levels (211). There is 
level  of  career  mobility 
consequently  a 
between  government  institutions,  thus  reducing 
opportunities for Austria to i) develop a more agile 
state and ii) allocate resources to emerging needs. 

low 

level 

Staff  numbers  and  salaries  in  the  Austrian 
civil  service  have  continued  to  grow  at 
(212). 
federal,  state  and  municipal 
However, a downturn is expected due to budgetary 
constraints.  Recent  reform  proposals  at  federal 
and  state 
include  a  consolidation  of 
employment in the civil service by cancelling posts 
after  people  retire  and  promoting  digitalisation 
and the use of AI (213). Without functional reviews 
accompanying  this  process,  there  is  a  risk  of 
creating shortfalls in capacity and service quality.  

level 

The  new  government  priorities  cover  broad 
measures  to  make  the  civil  service  more 
efficient,  effective,  attractive  and  forward 
looking.  The  ’reform  partnership’  working  group 
on  administrative  and  constitutional  streamlining 
(214) 
to  speed  up 
administrative  and  licensing  processes  (215).  This 
involves 
infrastructure  and 
interoperability  to  improve  federal  cooperation,  ii) 
promoting  digitalisation,  including  digital  ID,  and 
iii) automating processes.  

is  developing  measures 

i)  aligning  digital 

The 

division 

capacity 

challenges. 

complexity, 

Austria’s  federal  system  contributes  to 
and 
institutional 
budgetary 
of 
responsibilities  between  federal,  state  and  local 
government leads to a large number of regulatory 
arrangements.  This  in  turn  hinders  efficiency  and 
presents barriers to reform in crucial sectors such 
as education and health (see Annexes 13 and 15). 
Agility  and  merit-based  management  are 
hampered  by  a  lack  of  budgetary  autonomy  at 
subnational  levels,  by  widespread  politicisation 
and rigid employment frameworks. 

(211) Weichselbaum, B., 2025, The Civil Service in Austria | 7 | 

Tradition, Reforms, and the Impact. 

(212) Bundesministerium Finanzen, 2025, Personal des Bundes 

2025/2026. 

(213) ORF.at, 2025, Regierung will bei Verwaltungs-Personal 

sparen. 

(214) Bunderskanzleramt, 2025, Reformpartnerschaft Österreich: 

Gruppe "Verfassungs- und Verwaltungsbereinigung" 
präsentierte erste Ergebnisse. 

(215) Bunderskanzleramt, 2025, Bundesregierung: 

The  municipal 
is  particularly 
landscape 
fragmented,  with  many  municipalities  too 
small  to  provide  services  efficiently. 
In 
response,  cooperation  between  municipal  services 
has  grown  steadily.  However,  most  of  the  1969 
municipal service associations are small and for a 
single  purpose.  This  fragmented  approach  to 
cooperation  contributes 
to  systemic 
complexity, limiting scaling opportunities for more 
strategic,  systematic  and  regional  bundling  of 
administrative, economic, social and environmental 
services (see Annex 18).  

further 

Municipal efficiency is further hampered by a 
lack of interoperability and a lack of shared 
digital  platforms  for  common  municipal 
functions. Such platforms would enable municipal 
digital systems to exchange data with each other, 
the  Länder  and  federal  systems  seamlessly, 
thereby  facilitating  cooperation  for 
improving 
policy decisions and services. 

Integrity  

to  corruption 

Although  the  perception  of  corruption  when 
doing business in Austria remains around the 
EU  average, the  reported  level of  corruption 
actually  experienced 
is  above  the  EU 
average.  Overall,  such  perceptions  are  below  the 
EU average: 55% of companies perceive corruption 
to  be  widespread  (EU:  63%)  and  67%  feel  that 
overly  close  links  between  business  and  politics 
(EU:  76%).Only  22%  of 
lead 
businesses  see  corruption  as  a  problem  when 
doing  business 
indicating 
(EU:  35%) 
comparatively  limited  perceived  impact  on  their 
to 
operations.  Sectors  particularly  vulnerable 
corruption in Austria relate to  i) the links between 
some  media  outlets  and  the  political  sphere, 
especially  regarding  state  advertising,  and  ii)  the 
zoning  and  urban  planning  sector,  especially  at 
local 
(see  also  Annex  5).  Overall, 
companies  report  a  higher  incidence  of  requests 
for gifts, favours or  extra payments in connection 
with permits, services or procurement than the EU 
average (Austria 8%; EU 10%). At the same time, a 

level(217) 

(216), 

(216) European Commission, 2025, Flash Eurobarometer survey 
557 on businesses’ attitudes towards corruption in the EU 
and selected enlargement countries. 

Entbürokratisierungspaket macht den Staat einfacher. 

(217) European Commission, 2025, Rule of Law Report, p.13. 

74 

 
 
 
Justice 

The  justice  system  continues  to  operate 
efficiently  overall.  The  time  taken  to  reach  a 
decision  in  civil  and  commercial  cases  in  first-
instance courts fell from 141 days in 2023 to 132 
days  in  2024.  The  estimated  time  to  resolve 
first-instance  courts 
in 
administrative  cases 
increased (327 days in 2024, up from 313 days in 
2023).  The  quality  of  the  justice  system  remains 
high overall.  

in 

participating 

Austria  is  very  advanced  in  terms  of  the 
digitalisation  of  its  justice  system  and  is 
EU-funded 
actively 
digitalisation  projects  for  justice.  The  country 
lags  behind  in  digital  solutions  to  initiate  and 
follow  proceedings 
civil/commercial  and 
in 
administrative  cases,  and in  online  access  for  the 
general  public  to  published  judgments.  At  the 
same 
regarding 
arrangements  for  producing  machine-readable 
judicial decisions. 

performs  well 

time, 

it 

larger  proportion  consider  that  bribery  of  senior 
officials  is  appropriately  sanctioned  (Austria  40%; 
EU 33%) (218), which suggests that despite greater 
reported exposure to solicitation there is at least a 
perception of strong enforcement. 

taken 

limited  action 

Austria  has 
to 
strengthen  the  prevention  and  detection  of 
corruption.  There  has  been  some  progress  in 
introducing  rules  on  disclosure  of  assets  and 
interests  for  Members  of  Parliament,  whereas  no 
progress  has  been  made  to  strengthen  the 
lobbying framework. The overall post-employment 
framework  also 
limited.  Web-based 
reporting  channels  for  whistleblowers  are  running 
smoothly,  according  to  reports.  By  the  end  of 
2024,  147  reports  had  been  received  by  the 
Federal Anti-Corruption Bureau (219).  

remains 

Austria  has  taken  measures  to  improve  the 
prosecution  of  corruption.  There  are  ongoing 
investigations  into  high-level  corruption  cases. 
However,  prosecutors  often  experience  intense 
public  scrutiny.  In  2024,  83  potential  corruption 
cases and 796 cases of abuse of official authority 
were  detected,  yet  no  case  led  to  indictment,  10 
cases  were  discontinued  and  there  was  not  a 
single  conviction.  Despite  efforts  to  streamline 
anti-
prosecutors’ 
corruption  cases  still  entail  substantial  reporting 
obligations,  placing  an  additional  burden  on 
already  limited  resources  for  the  prosecution 
service  to  use.  Moreover,  there  was 
limited 
progress 
the  political 
following  up  on 
commitment  to  strengthen  the  independence  of 
the  prosecution  service  through  reform,  including 
ensuring  the  independence  of  the  specialist  anti-
corruption prosecution service (220). 

requirements, 

reporting 

in 

(218) European Commission, 2025, Flash Eurobarometer survey 
557 on businesses’ attitudes towards corruption in the EU 
and selected enlargement countries. 

(219) https://commission.europa.eu/strategy-and-

policy/policies/justice-and-fundamental-rights/upholding-
rule-law/rule-law/annual-rule-law-cycle/2025-rule-law-
report_en.  

(220) https://commission.europa.eu/strategy-and-

policy/policies/justice-and-fundamental-rights/upholding-
rule-law/rule-law/annual-rule-law-cycle/2025-rule-law-
report_en.  

75 

 
 
 
SUSTAINABILITY 
ANNEX 8: INDUSTRY DECARBONISATION, CIRCULARITY AND CLIMATE MITIGATION 

in 

enabling 

reducing 

economy  and 

Austria  is  making  progress  on  decarbonising 
energy-intensive  industry,  transitioning  to  a 
circular 
road 
transport  emissions  and  air  and  water 
pollutants, but significant challenges remain. 
Austria  is  taking  steps  to  decarbonise  energy-
industries  through  targeted  funding, 
intensive 
evolving  policies,  and  industrial  projects,  though 
many  measures  have  yet  to  be  implemented. 
Deeper  emission  reductions  will  require  continued 
infrastructure  and 
investment 
technologies.  In  transport,  reductions  from  road 
freight  have  been  largely  driven  by  economic 
conditions,  while  passenger  transport  has  yet  to 
transition. 
achieve  a  comprehensive  mobility 
Austria’s circular economy strategy is marked by a 
contrast  between  high 
rates  and 
persistent  waste  generation  challenges.  As  a 
leader  in  waste  management  within  the  EU, 
Austria  has  implemented  initiatives  such  as  a 
uniform  packaging  collection  system  and  a 
deposit-refund  scheme,  with  the  aim  of  further 
boosting  its  recycling  efforts.  Austria  is  making 
notable  progress 
in  reducing  air  and  water 
pollutants, yet significant challenges remain. 

recycling 

Industry decarbonisation 

Greenhouse gas emissions from industry 

About  a  third  of  Austria’s  greenhouse  gas 
(GHG)  emissions  come  from  manufacturing, 
which  is  fairly  emission  intensive  but  has 
seen  improvements  lately (221).  In  2024,  the 
emitted 
manufacturing 
314 g CO2eq  of  greenhouse  gases  per  euro  of 

Austria 

sector 

in 

(221) This Annex discusses the transition of Austria's 

manufacturing industry, specifically its energy-intensive 
industries, to low-carbon and net-zero modes of production, 
which is key to preserving competitiveness on the path 
towards climate neutrality as mandated by the European 
Climate Law. A broader perspective on the current 
competitiveness challenges facing Austria's manufacturing 
industry is provided in Annex 5. For a more detailed 
description of greenhouse gas emissions from industry, see 
European Commission (2025), 2025 Country Report - Austria, 
Commission staff working document, SWD (2025) 205 final, 
Brussels, 4.6.2025, Annex A7. Clean industry and climate 
mitigation. 

gross  value  added (222).  Since  2019,  emission 
intensity in Austrian industry has fallen by 12%. At 
61%  in  2023,  the  share  of  GHG  emissions  from 
industry  processes  and  product  use  is  the  fourth 
highest in the EU. 

Austria’s 
industrial  GHG  emissions  are 
dominated  by  a  few  high-emitting  point 
sources (223).  The  iron  and  steel  sector  accounts 
for 57% of total industrial emissions, the primary 
contributors being voestalpine’s sites in Linz (43%) 
and  Donawitz  (13%).  OMV’s  Schwechat  refinery 
generates 13% of the industrial total. These three 
the  vast  majority  of 
locations  account  for 
the 
emissions.  The 
production  of  cement  clinker  (10%),  lime  (6%), 
paper (4%), pulp (1%) and ammonia (4%). 

remainder  stems 

from 

Policies to promote industry decarbonisation 

Austria  is  taking  some  steps  to  address  the 
2025  recommendation  to  ‘further  reduce 
industrial 
[…]  by  advancing 
emissions 
decarbonisation’.  This  includes  targeted  funding 
to  complement  carbon  pricing  under  the  EU 
emissions 
policy 
industrial  projects.  However, 
frameworks  and 
significant challenges remain. 

evolving 

system, 

trading 

large-scale 

The  Transformation  of  Industry  programme 
funds 
decarbonisation 
projects (224).  Set  up  under  the  Environmental 
Support  Act,  it  has  a  budget  of  EUR 2.73 billion 
through  to  2030  and  an  estimated  annual 
allocation  of  EUR 400 million.  The  programme 
provides  aid  via  competitive  tenders  through  two 
mechanisms:  (i) ‘investment  grants’,  which  cover 
capital  expenditure  for  facilities  reducing  GHG 
emissions 
the 
transition  to  renewables;  and  (ii) ‘transformation 
grants’, which offset the cost differential between 
fossil fuels and renewable alternatives by covering 

through  energy  efficiency  or 

(222) Data on the manufacturing sector exclude the NACE division 
C19 – manufacture of coke and refined petroleum products, 
for better match of the sectoral data from Eurostat (gross 
value added) with those from the UNFCCC under the 
Common Reporting Format. Also see further indicators on 
industry decarbonisation, as well as the annotation for 
further information, in table A8.1 at the end of this Annex. 

(223) European Commission, 2026, Union Registry Public Website. 

(224) Federal  Ministry  of  Economy,  Energy  and  Tourism,  2026, 

Transformation der Industrie. 

76 

 
 
 
 
 
 
 
both  capital  and  operational  costs  for  up  to  10 
years.  To  date,  14  projects  have  been 
recommended  for  investment  grants,  while  2025 
marked  the  first  call  for  proposals  for  operating 
expenditure  support.  Notable  projects  include  the 
transition  to  green  electricity-powered  electric  arc 
furnaces  at  voestalpine’s  Linz  and  Donawitz  sites 
and 
the  Hy4Smelt  demonstration  plant  for 
hydrogen-based  direct  reduction.  Beyond  iron  and 
steel,  the  programme  has  also  funded  projects 
across  other  sectors,  including  the  cement  clinker 
and 
lime,  paper  and  pulp,  nitric  acid,  and 
aluminium sectors. 

implementation  of 
its  RTI 

The  Climate  and  Energy  Fund  (KLI.EN),  a 
in  2007 (225), 
state-owned  entity  set  up 
operates at the intersection of research and 
technologies. 
broad 
Through 
technology  and 
(research, 
innovation)  initiative  for  the  transformation  of 
industry,  the  fund  seeks  to  strengthen  the 
competitiveness  of  Austrian  enterprises  and 
research  institutions  within  international  net-zero 
technology value chains. It facilitates the transition 
from research to market by funding demonstration 
projects,  develops  applied  R&D  infrastructure  and 
establishes  qualification  networks  for  workforce 
upskilling (226).  The  most  recent  call  for  proposals, 
concluded in April 2026, allocated a budget of up 
to EUR 60 million to those objectives (227). Notable 
projects running from 2025 until 2028 include the 
development of high-temperature heat pumps for 
industrial  heat (228),  the  use  of  digital  twins  to 
reduce 
paper 
impregnation (229)  and  the  strategic  planning  of 
industrial 
supra-regional  highways  to  recover 
waste heat (230). 

consumption 

gas 

in 

Austria’s  2035  industrial  strategy  aims  to 
secure  competitiveness  through  a  socially 
transformation (231). 
just  and  ecological 

(225) Bundeskanzleramt  Österreich,  2007,  40.  Bundesgesetz  über 
die  Errichtung  des  Klima-  und  Energiefonds  –  (KLI.EN-
FondsG). 

(226) Klima- und Energiefonds, 2025, Unsere Förderungen. 

(227) Klima-  und  Energiefonds,  2025,  FTI-Initiative  für  die 

Transformation der Industrie 2025. 

(228) Klima- und Energiefonds, 2024, HIPI. 

and 

consumption.  Additionally, 

Unveiled in January 2026, it covers various issues, 
such as investment, energy and lead markets, and 
prioritises  nine  key  technologies,  including  energy 
and environmental technologies. The strategy aims 
to  ensure  affordable  and  secure  energy  for 
industry  and  includes  measures  such  as  reducing 
the electricity tax and promoting a more efficiently 
coordinated grid expansion to optimise production, 
storage 
it 
envisages  a  legal  framework  for  geothermal 
energy  to  provide  predictable 
low-to-medium 
temperature heat for industrial sites. For hydrogen, 
the strategy provides for a start-up network using 
repurposed  pipelines,  alongside  new  projects  such 
as the H2 Backbone WAG+Penta-West project. The 
aim 
fully  hydrogen-ready 
infrastructure  connecting  clusters  and  storage 
sites  by  2035,  supported  by  a  clear  regulatory 
package  in  the  Gas  Act.  This  builds  on  Austria’s 
hydrogen  strategy,  which  aims  to  build  1 GW  of 
just 
electrolysis  capacity  by  2030  (up  from 
35.2 MW  as  of  April  2026),  and  the  Hydrogen 
Support Act, which provides for EUR 820 million in 
funding  between  2024  and  2026.  As  regards 
carbon  capture  and  storage,  the  2035  industrial 
strategy signals a policy shift by ending the ban on 
geological  CO2  storage,  which  would  implement  a 
central pillar of the carbon management strategy. 

to  create  a 

is 

While energy-intensive industries continue to 
face challenges, recent projects demonstrate 
tangible  steps  towards  decarbonisation.  As 
part  of  its  network  development  plan,  Austrian 
Power Grid (APG) is expanding electricity grids (see 
Annex 9),  which 
is  essential  for  the  energy 
transition  of  the  iron  and  steel  sector.  In  Upper 
Austria,  EUR 800 million  has  been  invested  in 
replacing the legacy 110 kV network with a robust 
ring (232),  while  a  parallel 
220 kV 
supply 
in 
EUR 118 million  expansion 
Styria (233).  These  upgrades, 
for 
completion  by  late  2026,  are  necessary  for 
voestalpine to begin production at its new electric 
arc  furnaces  in  Linz  and Donawitz  in  2027. Other 
notable  initiatives  include:  C2PAT+,  which  aims  to 
capture CO2 emissions from Holcim’s Mannersdorf 
cement  plant (234);  OMV’s  140 MW  electrolysis 
facility  for  green  hydrogen  production  at  the 

is  under  way 

scheduled 

(232) APG, 2025, Sichere Stromversorgung im Zentralraum OÖ auf 

(229) Klima- und Energiefonds, 2024, ImpreDry. 

Kurs. 

(230) Klima- und Energiefonds, 2024, Future Heat Highway. 

(233) APG, 2025, Construction Project ‘New Leoben Connection’ on 

(231) Federal  Ministry  of  Economy,  Energy  and  Tourism, 

Schedule. 

Industriestrategie Österreich 2035. 

(234) Holcim, 2025, Mit C2PAT+ zur Klimaneutralität. 

77 

 
 
 
refinery 

currently 

Schwechat 
under 
construction (235);  and  Sappi’s  RRP-funded  BioFit 
project,  which  converts  boilers  at  the  Gratkorn 
paper  mill  to  renewable  biomass.  Although  these 
projects  represent  significant  progress  across 
sectors,  they  remain individual  steps in  a  broader 
transition that will require continued investment in 
enabling infrastructure and technologies. 

Reduction of effort sharing emissions 

Compliance  with  effort  sharing  limits  with 
domestic measures 

Effort 

Austria’s  effort  sharing  emissions  are 
projected  to  be  above  its  target  in  2030; 
unused  emission  allocations  from  previous 
years would not suffice to cover the gap for 
compliance  with 
Sharing 
the 
Regulation. 
In  2024,  GHG  emissions  from 
Austria’s  effort  sharing  sectors  are  expected  to 
have been 24.6% below those of 2005. By 2030, 
current  and  planned  policies  and  measures  are 
expected to lead to a 40% decrease, leaving a gap 
of  8 percentage  points  to  the  2030  target  of 
−48%.  Austria  could  bridge  part  of  this  gap  with 
own  unused  annual  emission  allocations  from 
previous  years  but  would  also  need  transfers  of 
allocations  from  other  Member  States  to  comply 
with  the  Effort  Sharing  Regulation.  The  timely 
implementation  of  its  additional  measures  and 
identification  of  new  ones  will  remain  crucial  for 
Austria to progress towards climate neutrality (236). 

(235) OMV,  2025,  Green  Hydrogen  –  A  sustainable  alternative  to 

fossil hydrogen. 

(236) The  national  GHG  emission  reduction  target  is  set  out  in 
Regulation (EU) 2018/842 (the Effort Sharing Regulation). It 
applies  jointly  to  buildings  (heating  and  cooling),  road 
transport,  agriculture,  waste  and  small  industry  (known  as 
the effort sharing sectors). The emissions from effort sharing 
sectors for 2024 are based on approximated inventory data. 
The  final  data  will  be  established 
in  2027  after  a 
comprehensive  review.  Projections  about  the  impact  of 
current  policies 
(‘with  existing  measures’,  WEM)  and 
additional  policies (‘with  additional  measures’,  WAM)  as  per 
Austria’s 2025 reporting under Article 17 of Regulation (EU) 
2018/1999 (the Governance Regulation). Also see European 
Commission  (2025),  Climate  Action  Progress  Report  2025 – 
Technical  Information,  Commission  staff  working  document, 
Brussels,  Chapter  9  (pp. 111ff.),  and  in  particular  Tables  25 
and 26. 

Graph A8.1: Greenhouse gas emissions in the 
effort sharing sectors, 2005, 2023, and 2024 

Source: European Environment Agency. 

Road transport remains the largest source of 
Austria’s  effort  sharing  emissions  and  the 
second-largest  source  of  GHG  emissions 
overall  after  industry (237).  Diesel  cars  account 
for  around  two  fifths  of  these  emissions,  with 
heavy-duty  vehicles  and  petrol  cars  each 
roughly  one  quarter (238).  Road 
contributing 
transport emissions peaked in 2005 and remained 
high until a pandemic-driven drop in 2020. After a 
brief  rebound  in  2021,  emissions  have  continued 
to  fall,  driven  by  a  protracted  recession  and 
ongoing  policy  measures,  although  the  rate  of 
decrease is gradually slowing. 

Sustainable transport 

[…] 

Austria is taking limited steps to address the 
2025  recommendation  to  ‘further  reduce 
emissions 
in  the  transport  sector’. 
Reductions  from  road  freight  have  been  largely 
driven by the recession, while passenger transport 
has  yet  to  achieve  a  comprehensive  mobility 
transition,  despite  growth 
in  public  and  rail 
transport and progress in e-mobility. 

reduced 

Weakening  economic  conditions,  particularly 
in  manufacturing  and  construction,  have  led 
to 
transport, 
contributing  to  lower  emissions from  heavy-
duty  vehicles.  In  2024,  freight  volumes  fell  by 
1.1%  from  the  previous  year’s  already 
low 
level (239),  while  heavy-duty  vehicle  mileage  and 

freight 

road 

(237) See Graph A8.1, and Table A8.1 at the end of this Annex. 

(238) Umweltbundesamt, 2025, Detailbericht zur Nahzeitprognose 
der  österreichischen  Treibhausgas-Emissionen  des  Verkehrs 
2024. 

(239) Statistik  Austria,  2025,  Straßengüterverkehr  österreichischer 

Unternehmen. 

78 

010203040506070200520232024MtCO2eDomestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
 
  
 
overall road freight performance fell by 1.4% (240) 
and  1.3% (241),  respectively.  Between  2020  and 
2023,  heavy-duty  vehicle  emissions  dropped  by 
33.8% (242),  accounting  for  over  two  thirds  of  the 
total reduction in road transport emissions. 

in 

drop 

heavy-duty 

fuel  distributors 

Alongside  the  economic  downturn,  several 
policy  measures  have  contributed  to  the 
vehicle 
recent 
emissions (243). These measures include targeted 
funding  programmes  for  emission-free  buses (244) 
and  heavy-duty  vehicles (245),  as  well  as  the 
National  Emissions  Certificate  Trading  Act,  which 
requires 
to  purchase  CO2 
certificates for fossil fuels. This act  has narrowed 
the price gap with neighbouring countries, thereby 
reducing  the  incentive  for  ‘fuel  tourism’  and 
leading  to  a  reduction  in  fuel  exports.  Further 
reductions  in  heavy-duty  vehicle  emissions  could 
be  achieved  by  the  75% 
infrastructure  toll 
heavy-duty 
for 
discount 
vehicles (246),  which  has  been  extended  to  2030, 
and by removing legal and contractual restrictions 
along the high-ranking road network to enable the 
expansion  of  high-power  charging  infrastructure. 
This is supported by ASFINAG’s ongoing concession 
programme  to  equip  all  its  around  60  rest  areas 
with  charging  stations  by  2030,  with  minimum 
requirements  including  multiple  fast  chargers  for 
passenger  cars  per  site,  as  well  as  megawatt 
charging  and  overnight  charging  options  for 
heavy-duty vehicles (247). 

zero-emission 

individual 

Motorised 
remains 
Austria’s  dominant  mode  of  passenger 
travel,  with  only  gradual  reductions  in  car 
emissions,  despite  growth  in  public  and  rail 

transport 

(240) ASFINAG, 2025, Geschäftsbericht 2024. 

(241) Umweltbundesamt, 2025, Detailbericht zur Nahzeitprognose 
der  österreichischen  Treibhausgas-Emissionen  des  Verkehrs 
2024. 

(242) European Environment Agency, EEA greenhouse gases – data 

viewer. 

(243) Umweltbundesamt, 2025, Detailbericht zur Nahzeitprognose 
der  österreichischen  Treibhausgas-Emissionen  des  Verkehrs 
2024. 

(244) FFG, 2025, EBIN. 

(245) FFG, 2025, ENIN. 

(246) ASFINAG,  2026,  GO  toll  for  trucks,  buses  and  heavy 

transport (248).  Passenger  transport  performance 
has increased, with over half of the increase since 
2019  driven  by  buses,  electrified  public  transport 
and  railways.  The  growth  in  rail  travel  was 
primarily  driven  by  a  wider  and  more  attractive 
range  of  services,  such  as  the  KlimaTicket.  A  key 
milestone was the opening of the Koralm Railway 
in  December  2025.  It  has  substantially  reduced 
travel  times  between  Graz  and  Klagenfurt  to  41 
minutes  and  was  constructed  with  support  from 
the Recovery and Resilience Facility. Nevertheless, 
motorised  individual  transport  still  accounts  for 
two  thirds  of  all  passenger  transport.  As  a  result, 
emissions  from  passenger  cars  have  fallen  only 
slowly.  Between  2020  and  2023,  passenger  car 
emissions  fell  by  10.8%,  contributing  only  one 
third  of  the  total  reduction  in  road  transport 
emissions,  despite  the  fact  that  cars  emit  2.5 
times  more 
than  heavy-duty  vehicles  and 
buses (249).  Reductions  were  mainly  driven  by 
increased 
diesel  cars,  while  petrol  emissions 
slightly  as  a  result  of  shifts  within  the  internal 
combustion engine fleet (250). 

Austria  is  seeing  progress  in  e-mobility,  but 
this  has  yet  to  translate  into  a  comprehen-
sive  mobility  transition  for  the  national 
fleet (251).  In  2025,  new  registrations  of  battery 
electric  vehicles  (BEVs)  increased  by  35.9%  com-
pared  with  the  previous  year.  BEVs  accounted  for 
21.3%  of  total  new  vehicle  registrations,  placing 
Austria  above  the  EU  average,  while  remaining 
below  the  levels  seen  in  leading  Member  States. 
Hybrid cars accounted for 39.3% and conventional 
internal  combustion  engines  accounted  for  the 
remainder,  with  petrol  at  27.9%  and  diesel  at 
11.6%.  Progress  has  been  made  in  expanding 
charging  infrastructure.  As  of  late  2025,  total 
power  output  surpassed  the  EU’s  fleet-based 
targets  under  the  Alternative  Fuels  Infrastructure 
factor  of  3.4 (252).  This 
Regulation  by  a 
development  was  facilitated  by  various  funding 

(248) Umweltbundesamt, 2025, Detailbericht zur Nahzeitprognose 
der  österreichischen  Treibhausgas-Emissionen  des  Verkehrs 
2024. 

(249) European Environment Agency, EEA greenhouse gases – data 

viewer. 

(250) Umweltbundesamt, 2025, Detailbericht zur Nahzeitprognose 
der  österreichischen  Treibhausgas-Emissionen  des  Verkehrs 
2024. 

motorhomes. 

(251) Statistik Austria, 2025, Kfz-Neuzulassungen. 

(247) ASFINAG,  2025,  ASFINAG  schreibt  Konzession  für  Planung, 

(252) European  Commission,  2026,  European  Alternative  Fuels 

Errichtung und Betrieb von E-Ladeinfrastruktur aus. 

Observatory. 

79 

 
 
 
including 

programmes, 
the 
‘E-Mobilitätsoffensive’ (253), which helped establish 
an  initial  market  through purchase  incentives  and 
infrastructure  funding.  The  programme  has  been 
supplemented  by  specialised  funding  initiatives, 
such  as  LADIN  for  fast-charging  infrastructure  in 
underserved  areas (254).  However,  deployment  of 
dedicated  charging  infrastructure  for  heavy-duty 
vehicles is still in the very early stages. The ‘eMove 
Austria’  programme (255),  launched  in  July  2025 
with  funding  of  EUR 480 million  for  2025  and 
2026,  is  Austria’s  new  umbrella  programme  for 
sustainable  transport.  It  shifts  the  policy  focus 
from  initial  market  creation  to  the  systemic  inte-
gration  of  vehicles  into  a  renewable  energy  grid. 
Simultaneously,  Austria  has  phased  out  key  tax 
incentives  for  e-mobility.  For  example,  it  has 
abolished 
tax 
exemption,  adding  around  EUR 500  per  year  in 
costs (256),  and  the  car  registration  tax  (NoVA)  for 
all N1 vehicles, removing a previous tax advantage 
for zero-emission models that typically amounted 
to  several  thousand  euro.  These  policy  shifts 
coincide with a national vehicle fleet that remains 
dominated  by  diesel  (48%)  and  petrol  (41.8%), 
while  BEVs 
represent  only  a  small 
minority (257). 

the  engine-related 

insurance 

(3.8%) 

Sustainable industry 

Circular economy industry 

Austria’s circular economy strategy provides 
an  ambitious  road  map,  but  high  recycling 
rates  are  masking  consistently  high  waste 
generation. One of the targets set in the national 
circular  economy  strategy  adopted  in  2022  is  to 
reduce  Austria’s  material  footprint  (raw  material 
consumption)  to  7 tonnes  per  capita  per  year  by 
2050, increasing the resource productivity rate by 
50% by 2030 and thus reducing waste. It needs to 
be  pointed  out  that  Austria  currently  produces 

(253) Klima- und Energiefonds, 2024, E-Mobilität für Private. 

(254) FFG, 2025, LADIN. 

(255) Federal Ministry of Innovation, Mobility and Infrastructure, 
2025, eMove Austria: Mehr bewegen, weniger emittieren. 

(256) WKO, 2025, Motorbezogene Versicherungssteuer für E-Autos 

ab 1.4.2025. 

(257) Statistik Austria, 2025, Kfz-Bestand. 

80 

more waste than any other EU country, generating 
782 kg of municipal waste per capita in 2023 (258). 

Austria  ranks  among  the  EU  leaders  for 
recycling  rates,  with  62.8%  of  municipal 
waste  being  recycled  (EU  average:  48%)  and 
91%  of  construction  and  demolition  waste  being 
recovered (259)  (EU  average:  89%).  However,  with 
regard to recycling of plastic packaging, Austria is 
well  below  the  EU  average,  at  approximately 
26.9% in 2023, compared with 42% in the EU as a 
whole (260). Progress would need to be stepped up 
to  meet  the  2030  recycling  target  (55%).  On 
1 January  2025,  Austria 
launched  a  uniform 
plastic and metal packaging collection system and 
a  deposit-refund  system,  with  a  bottle  deposit  of 
EUR 0.25  on  plastic  and  metal  beverage 
packaging,  funded  through  Austria's  recovery  and 
resilience plan. First estimates show that, since the 
introduction of the new system, the collection rate 
has already reached 81.5%, but the real impact on 
the  recycling  rate  of  all  plastic  waste  is  not  yet 
known. 

capita  material 

consumption  has 
Per 
decreased  over  the  past  five  years  by 
17.85% (261), which has been paralleled by an 
increase  of  35%  in  resource  productivity 
from  2019  to  2024 (262). 
In  addition,  the 
secondary  material  use  rate  grew  from  11.2%  to 
15.2%  over  the  past  10  years,  putting  Austria 
above the EU average of 12.2% (263). Nevertheless, 
there is still a need for action to achieve the goal 
set  in  the  Austrian  circular  economy  strategy, 
namely increasing the circular material use rate to 
18% by 2030. 

Austria’s  fiscal  tools  for  circular  practices 
support  revenue  and  waste  reduction.  Total 
environmental  tax  revenue  corresponds  to  the  EU 
average  (2%  of  GDP  in  2023) (264).  Of  that 

(258) Eurostat, Municipal waste, Link. 

(259) Techno-economic and environmental assessment of 

construction and demolition waste management in the 
European Union, JRC, 2024. Link. 

(260) Eurostat, Plastic packaging recycling rate, Link. 

(261) Eurostat, Material footprints, Link. 

(262) Eurostat, Resource productivity, Link. 

(263) Eurostat, circular material use rate, Link. 

(264) European Commission: Directorate-General for Environment, 

RPA Europe, Conduct in-depth assessments on 
environmental priorities to support the greening of the 

 
 
 
 
amount, revenues from energy and transport taxes 
constituted around 60.9% and 38.3%, respectively, 
of total environmental tax revenue. Revenues from 
pollution  and  resource  taxes  amounted  to  only 
around  0.63%  and  0.21%,  respectively (265).  In 
recent years, Austria has made limited progress in 
expanding  its  environmental  tax  base.  While  the 
overall environmental tax revenue has increased in 
absolute terms, its share relative to GDP and total 
tax revenue has decreased for all except resource 
taxes. However, Austria mostly uses charges rather 
than  taxes  to  counteract  pollution  and  negative 
include 
consequences. 
environmental 
charges  for  water,  wastewater,  waste,  and  waste 
transportation.  As  a  result,  ecologically  relevant 
charges  make  up  a  significantly  higher  revenue 
share than environmental ‘taxes’. 

These 

Austria  does  well  in  waste  management.  It 
reports  limited  landfilling  of  municipal  waste  as 
compared with the EU as a whole,  where 22% of 
the municipal waste generated is landfilled (2023). 
Austria has a landfill and incineration tax in place. 
The  pay-as-you-throw  principle  is  applied  across 
the  whole  country.  In  Austria,  the  landfill  rate 
decreased from 3% in 2010 to 2% in 2023. Since 
2010,  the  incineration  rate  has  fluctuated  around 
35% (266).  Residues  from  incineration  and  co-
incineration are exempt from the landfill tax (267). 

Austria’s  total  investment  needs  to  achieve 
its  circular  economy  objectives  amount  to 
EUR 6.5 billion per year (268). 

Bioeconomy industry 

Austria’s  bio-based  economy  plays  an 
important  role 
in  the  country’s  overall 
decarbonisation.  Austria’s  food  and  beverage 

market  is  leveraging  the  EU’s  highest  share  of 
organic  farming  to  create  value  from  agricultural 
side  streams,  while  its  textile  sector  is  expanding 
by  using  high-tech  cellulose-based  fibres  to 
replace synthetics. All these efforts are in line with 
the  Austrian  bioeconomy  strategy’s (269)  goal  of 
achieving  the  national  climate  targets.  Reflecting 
this  momentum,  bioeconomy  value  added  has 
grown  slightly  more  than  domestic  GDP  in  recent 
in  particular  by  the  food  and 
years,  driven 
beverages  and  wood  products  and  furniture 
subsectors (270). The food and beverages subsector 
registered  the  highest  growth  in  value  added 
(5.9%  on  average  between  2018  and  2023) (271). 
While 
the 
employment 
bioeconomy  have  fallen  slightly,  the  bio-based 
chemicals  and  plastics  subsector  registered  the 
highest growth in total employment between 2018 
and 2023 (3.2%) (272)(273). 

overall 

levels 

in 

Labour productivity of the bioeconomy – measured 
as the value added per person employed over the 
national  average  -  improved  to  80.7%  in  2023 
from 74.7% in 2018 (274) 

Research  and  development 
(R&D)  business 
expenditures  from  the  bioeconomy  sub-sectors 
have  grown  slightly  more  than  the  overall  R&D 
business expenditure in Austria (5.2% compared to 
4.1% on average between 2018 and 2023) (275) 

Zero-pollution industry 

Over  the  past  decade,  Austria  has  made 
continuous  progress 
in  reducing  key  air 
pollutants  through  cleaner  energy  production, 
and 
emission 
tighter 
improvements in industrial technology. 

standards 

vehicle 

European Semester and integration of environmental 
priorities into the EU’s economic governance framework, 
2025. 

(265) European Commission: Directorate-General for Environment, 

RPA Europe, Conduct in-depth assessments on 
environmental priorities to support the greening of the 
European Semester and integration of environmental 
priorities into the EU’s economic governance framework, 
2025. 

(269) Bioökonomie-Strategie Österreich, 2019, Link. 

(270) Joint Research Centre, Developments of Economic Growth 

and Employment in Bioeconomy Sectors across the EU, Link. 

(271) Joint Research Centre, Developments of Economic Growth 

and Employment in Bioeconomy Sectors across the EU, Link. 

(272) Bioeconomy  subsectors:  food  and  beverages;  bio-based 
textiles;  wood  products  and  furniture;  bio-based  chemicals 
and plastics. 

(266) Eurostat, Municipal waste by waste management operations, 

(273) Joint Research Centre, Developments of Economic Growth 

Link. 

and Employment in Bioeconomy Sectors across the EU, Link. 

(267) EEA, Early warning assessment related to the 2025 targets 
for municipal waste and packaging waste (2025), Link. 

(274) Joint Research Centre, Developments of Economic Growth 

and Employment in Bioeconomy Sectors across the EU, Link. 

(268) European Commission, Environmental Implementation 

(275) Joint Research Centre, Business expenditure in Research and 

Review (2025), Austria country report, Link. 

Development (R&D) in the EU bioeconomy, Link. 

81 

 
 
 
Accordingly, Austria reduced emissions of air 
pollutants  (NOx,  NMVOC,  PM10  and  SOx)  by 
7%  in  terms  of  kg  per  capita  in  2023 (276) 
and full compliance has been ensured for all 
limit  values  and  target  values,  with  the 
exception  of  ozone.  Despite  this  progress, 
Austria  continues  to  grapple  with  air  pollution 
costs. In 2022, multiple air quality zones exceeded 
the  ozone  target,  and  annual  damage  costs  are 
estimated  at  EUR 13 million  per  year  for  ozone 
alone (277).  While  the  other  main  air  pollutants 
(ammonia,  NMVOC,  sulphur  dioxides,  NOx  and 
PM2.5)  are  estimated  to  create  annual  costs  of 
more  than  EUR 7 billion (278).  This  underscores  the 
need  for  further  action,  particularly  in  industrial 
regions 
corridors. 
Furthermore, no new taxes on major air pollutants 
such as NOx, SO₂ or particulate matter have been 
implemented in the same period (279). Introducing a 
pollution tax system could reduce these pollutants 
by  7-30%,  depending  on  the  tax  rate,  while 
generating  up  to  EUR 10 million  in  revenue  by 
2030 (280). 

transport 

urban 

and 

Directive (281). However, 100% of Austria’s surface 
water  bodies  are  still  failing  to  achieve  good 
chemical status due to the presence of ubiquitous, 
persistent,  bio-accumulative  and  toxic  substances 
(uPBTs) (282)  that  result  from  past 
industrial 
activities.  Water  pollution  by  industry  imposes 
direct  and 
indirect  costs  of  EUR 168 million 
annually (283),  not  yet  sufficiently  borne  by  the 
polluters. 

productivity, 

The  total  economic  cost  of 
industrial 
pollution in Austria is more than EUR 4 billion 
per  year  –  encompassing  healthcare  expenses, 
lost 
environmental 
degradation (284)(285).  Yet,  investment  still  falls 
short.  To  meet  national  and  EU  targets  for 
pollution  prevention  and  control,  Austria  would 
need  to  spend  an  additional  EUR 855 million  per 
year (0.19% of GDP), mostly in relation to clean air 
and noise (286). 

and 

Water pollution from industry also remains a 
critical  challenge.  Positive  developments  for 
water pollution in Austria include a 33% reduction 
in  industrial  heavy  metal  releases  (cadmium, 
mercury, nickel and lead) and a 14% drop in total 
organic carbon emissions to water since 2010, as 
Emissions 
reported 

Industrial 

under 

the 

(276) Eurostat, Air emissions accounts, Link. 

(277) European Commission: Directorate-General for Environment, 
EMRC, Logika Group and RPA Europe; Update of the costs of 
not implementing EU environmental law (2025), Link. The 
damage cost is calculated in terms of value of a life-year 
(VOLY). 

(278) European Commission: Directorate-General for Environment, 
IEEP, Green taxation and other economic instruments – 
Internalising environmental costs to make the polluter pay, 
2021, Link. 

(279) European Commission: Directorate-General for Environment, 

RPA Europe, Conduct in-depth assessments on 
environmental priorities to support the greening of the 
European Semester and integration of environmental 
priorities into the EU’s economic governance framework, 
2025. 

(280) European Commission: Directorate-General for Environment, 

RPA Europe, Conduct in-depth assessments on 
environmental priorities to support the greening of the 
European Semester and integration of environmental 
priorities into the EU’s economic governance framework, 
2025. 

(281) EEA, Water pollutant releases changes from 2010 to 2022 

for the EU Member States, 2024, Link. 

(282) European Commission. Third River Basin Management Plans 
Second Flood Hazard and Risk Maps and Second Flood Risk 
Management Plans Member State: Austria, 02/2025, Link. 

(283) European Commission: Directorate-General for Environment, 
IEEP, Green taxation and other economic instruments – 
Internalising environmental costs to make the polluter pay, 
2021, Link. 

(284) European Commission: Directorate-General for Environment, 

RPA Europe, Conduct in-depth assessments on 
environmental priorities to support the greening of the 
European Semester and integration of environmental 
priorities into the EU’s economic governance framework, 
2025. 

(285) EEA, The costs to health and the environment from industrial 
air pollution in Europe – 2024 update, 2024, Link. The costs 
reported are calculated in terms of value of a statistical life 
(VSL). 

(286) European Commission: Directorate-General for Environment, 
EMRC, Logika Group and RPA Europe; Update of the costs of 
not implementing EU environmental law (2025), Link. 

82 

 
 
 
Table A8.1:  Key clean industry and climate mitigation indicators: Austria 

Source:  and  notes:  Industry  decarbonisation:  All  data  are  from  Eurostat;  data  following  the  UNFCCC  Common  Reporting 
Format  (CRF)  are  from  the  European  Environment  Agency  (EEA),  republished  by  Eurostat.  (1)  Sectors  covered:  all  divisions  of 
section C - Manufacturing - of the NACE Rev. 2 statistical classification of economic activities, except C19 (manufacture of coke 
and refined petroleum products). (2) GHG emissions as per UNFCCC Common Reporting Framework  (CRF) categories 1.A.2 - fuel 
combustion  in  manufacturing  in  industries  and  construction  (that  broadly  correspond  to  the  broadly  correspond  to  the  NACE 
sections C - Manufacturing and E  - Construction, excluding C-19), and CRF2 - industrial processes and product use. The figures 
shows the emissions in the 1.A.2 category as a share of the sum of CRF1.A.2. and CRF2 emissions. (3) Sectors covered: CRF 1.A.2 
as described above. Gross value added (GVA) data in the denominator aligned in sectoral coverage, in 2020 prices. (4) Sectors 
covered:  NACE  section  C  excluding C19.  (5)  Nominator:  NACE  divisions  C17, 20, 23, 24;  denominator:  NACE  section  C  excluding 
C19  (see  above).  (6)  GVA  (denominator)  in  2020  prices.  Reduction  of  effort  sharing  emissions:  Data  source:  European 
Environment Agency, greenhouse gas data viewer; European Commission, Climate Action Progress Report, 2025. For details, see 
the footnote in the "Reduction of effort sharing emissions" section. Sustainable road transport: (7) Source: Eurostat; (8) Source: 
European Alternative Fuels Observatory; (9) Source: Eurostat. For all climate mitigation indicators, the trend arrows compare the 
latest available data (year t) with the data four years earlier (t-4). Sustainable industry: Bioeconomy value added, employment 
and  productivity:  JRC, Developments  of  Economic  Growth  and  Employment  in  Bioeconomy  Sectors  across  the  EU.  Bioeconomy 
R&D business expenditure: JRC, Business expenditure in Research and Development (R&D) in the EU bioeconomy. Damage cost for 
industrial pollution: EEA,  The costs to health and the environment from industrial air pollution in Europe, 2024. Water industrial 
pollutants  releases:  EEA, Industrial  releases  of  pollutants  to  water  and  economic  activity  in  the  EU-27,  2024.  Water  chemical 
status: WISE, Surface water bodies: Chemical status, 2024 and WISE Groundwater bodies: chemical status, 2024. Other indicators: 
Eurostat.  For  circular  economy  indicators,  the  trend  arrows  compare  the  latest  available  data  (year  t)  with  the  data  two  years 
earlier (t-2). 

83 

Climate mitigationTrendIndustry decarbonisation201820192020202120222023202420182023GHG emissions intensity of manufacturing production, g/€ (1)345357368363316304314330-Share of energy-related emissions in industrial GHG emissions (2)41.340.040.939.639.938.4-55.557.9Energy-related GHG emissions intensity of manufacturing and construction, g/€ (3)162.6162.0171.4162.0143.0132.9-203.9163.0Share of electricity and renewables in final energy consumption in manufacturing, % (4)48.147.947.247.248.148.450.542.843.9Energy intensity of manufacturing, GWh/€ (4)1.201.181.241.161.071.001.081.271.05Share of energy-intensive industries in manufacturing production, % in GVA (5)19.4218.9518.4218.4618.9917.8418.47--GHG emissions intensity of production in sector [...], g/€ (6)- paper and paper products (NACE C17) 824          883          888                 883            716                  696           652             722             619            - chemicals and chemical products (NACE C20) 794          799          745                 906            896                  634           573             --- other non-metallic mineral products (NACE C23) 1,839        1,773       2,040              1,920         1,685                1,695         1,720          2,495           2,352          - basic metals (NACE C24) 2,683        2,969       3,141              3,862         3,500                3,667         3,708          2,842           3,099          Reduction of effort sharing emissions201820192020202120222023202420182023GHG emission reductions relative to base year, % -13.4-17.8-22.4-24.6- domestic road transport-2.1-1.9-15.1-11.9-16.6-20.3-23.0-1.4-5.6- buildings-36.5-34.6-34.7-29.6-40.2-47.7-50.8-20.3-33.520052021202220232024TargetWEMWAMEffort sharing: GHG emissions, Mt; target, gap, %57.049.346.944.343.0-48.0%-32.2%-40.0%Sustainable road transport2018201920202021202220232024202520182021New zero-emission vehicles, electricity motor, % (7)1.982.816.4213.9115.8919.9117.581.038.96Number of publicly accessible AC/DC charging points (8)--81041173917584186363042134706446956n/aShare of electrified railways, % of total (9)71.5070.8171.2071.4472.0273.8673.9955.4756.49Sustainable industryTrendEU-27Circular economy transition20182019202020212022202320242018latest dataMaterial footprint, tonnes per person23.622.521.825.424.220.118.414.813.7Circular material use rate, %11.8          11.5         11.4                11.2           12.2                  14.2           15.211.612.2Resource productivity, €/kg2.5            2.5           2.4                  2.4             2.8                    3.2             3.42.13.0Employees in circular economy1.4            1.41.4                  1.6             1.4                    1.4             -2.12.0Patents in circular economy13.2719.3         26.4                30.5           12.312.0Recycling rate           57.7           58.2                  62.3             62.5                   62.6            62.8 :46.4048.1Plastic recyling 32%31%25%26%25%27%-41%42%Construction and demolition waste (CDW) recovery 90-918889Bioeconomy industry 2018201920202021202220232024CAGR 2018-202320182023Value added, million EUR18,76919,20519,29621,63524,37323,876-4.1%642,438863,436Employment, total number of people employed331,205326,100327,694334,816334,326325,594--0.3%17,649,04017,085,642ProductivityValued added per worker, thousand EUR56.758.958.964.672.973.3-4.4%36.450.5Valued added per worker, % of national average74.776.077.481.484.980.7-1.3%62.270.7R&D business expenditureTotal bioeconomy (biomass producing and converting sectors)4604545406807036255.2%15,67223,335Total R&D business expenditure8,3238,7498,4839,1089,80410,618-4.1%196,587259,525Zero pollution industry201820192020202120222023202420182021Damage cost for industrial pollution6.74.94.04.3---414.9352.7Water industrial pollutants releases 2021change (2010)2021change (2010)2021change (2010)2021change (2010)6,512        -15%4,873,700        -1%8,652,600         -19%317,610      -19% Water chemical statusGood-                  Good (%)-                   Poor8077.0Poor (%)99%EUTOCPhosporusAustriaAustriaCd, Hg, Ni, Pbnitrogen 
 
  
 
ANNEX 9: AFFORDABLE ENERGY TRANSITION 

This  annex  outlines  the  progress  made  and 
the  ongoing  challenges  faced  in  increasing 
energy  affordability,  while  advancing  the 
transition 
the 
implementation  of energy-related  country-specific 
recommendations (CSRs). 

to  net  zero. 

reflects 

It 

The  2025  energy-related  CSR  for  Austria 
highlights  the  need  to  tackle  high  energy 
costs,  including  by  reforming  the  Electricity 
Act,  increasing  the  flexibility  of  the  energy 
system  and  incentivising  power  purchase 
agreements. It also calls on Austria to reduce its 
overall  reliance  on  fossil  fuels  and  accelerate  the 
roll-out  of  renewable  energy  and  the  required 
simplifying 
infrastructure, 
in  place 
permitting  procedures  and  putting 
dedicated 
it 
acceleration 
recommends  that  Austria  increase  its  energy 
efficiency. 

particularly 

Lastly, 

areas. 

by 

Austria  took  steps  to  address  high  energy 
prices, 
including  measures  that  will  be 
effective  in  2026  and  the  adoption  of  the 
Electricity  Act,  where  a  full  and  timely 
implementation  will  be  key  for  achieving 
sustainable  and  structurally  lower  prices. 
Austria  continues  making  progress  in  renewable 
energy expansion, except for wind energy, where it 
needs  to  shorten  permitting  times  and  designate 
enough  acceleration  areas.  Austria  also  needs  to 
upgrade  and  expand  its  electricity  grid,  including 
cross-border connections to drive its clean energy 
transition. 

Energy prices and costs 

Austria  has  taken  limited  action  to  tackle 
high energy costs, as most of the temporary 
support  measures  introduced  for  households 
and industry expired at the end of 2024 and 
the new ones, introduced at the end of 2025, 
will not have an impact until 2026. The more 
structural, long-term reforms, such as the recently 
adopted  Electricity  Act,  will  have  an 
impact 
midterm, in two or three years’ time. 

At  the  end  of  2025,  Austria  introduced  the 
following measures: i) a EUR 150 million bonus for 
energy-intensive  industry  for  2025-2026,  80%  to 
be  reinvested,  with  50%  of  that  amount  going  to 

energy efficiency measures; ii) by agreement with 
transmission  system  operator,  network 
the 
charges  will  increase  by  only  1.1%  in  2026;  iii) 
levies  on  renewables  will  decrease  by  more  than 
14%  in  2026;  iv)  a  one-off  relief  measure  of 
EUR 500 million for 2026 to reduce the electricity 
tax for households and enterprises; and, lastly, v) a 
social tariff, under the new Electricity Act, for low-
income households, resulting in an average saving 
of  around  EUR 300  per  household  per  year, 
translating in EUR 300 million total savings. 

Household  energy  bills  in  Austria  remained 
slightly above the EU average, while Austrian 
industrial  consumers  have  faced  prices  well 
above the EU average. In the first half of 2025, 
household  gas  and  electricity  prices  in  Austria 
remained  slightly  above  the  EU  average,  at 
EUR 0.1220/kWh 
EUR 0.2905/kWh 
and 
respectively.  Similarly,  retail  electricity  prices  for 
industrial consumers increased slightly in the first 
half  of  2025 
(to  EUR 180/MWh)  and  have 
remained  above  the  EU  average  (EUR 164/MWh). 
Wholesale  costs  make  up  63%  of  the  electricity 
price for industry, with network costs, carbon costs 
and  taxes  accounting  for  20%,  5%  and  12% 
respectively of the electricity bill.  

Importantly,  final  energy  prices  in  Austria  had  a 
high  electricity-to-gas  ratio,  despite  Austria’s 
actions  to  decrease  taxation  on  electricity.  For 
large businesses, electricity was three times more 
expensive  than  gas  in  the  first  half  of  2025, 
although for non-household consumers, taxes and 
levies accounted on average for 12% of electricity 
bills  but  nearly  25%  of  gas  bills.  However,  if  VAT 
on electricity were included, it would have risen to 
nearly  27%  of  the  bill.  By  excluding  taxes  and 
levies, the electricity-to-gas price ratio would have 
increased  to  3.5,  signalling  the  impact  of  the 
Austrian fiscal measures. A similar – even greater 
–  effect  is visible  for  households,  where  the  ratio 
increases 
taxes  are 
excluded (287).  

to  3  once 

from  2.4 

(287) Analysis based on Eurostat data from the first half of 2025. 

84 

 
 
 
 
 
Graph A9.1: Electricity and gas prices for 
household and non-household consumers, first 
half of 2025 

(i) For household consumers, the consumption band is DC for 
electricity and D2 for gas. (ii) For non-household consumers, 
the consumption band is ID for electricity and I4 for gas. VAT 
and recoverable charges are not displayed for non-household 
consumers as these are typically recovered by businesses. 
This also applies to the ‘% of taxes and levies’, which is shown 
excluding VAT and recoverable charges for non-household 
consumers. (iii) ‘Without taxes and levies’ indicates the retail 
price excluding all taxes and levies. It always includes the 
energy/supply and network cost components, which are not 
disaggregated in Eurostat’s six-monthly price dataset. 
Source: Eurostat 

Due to continued reliance on natural gas for 
electricity  generation,  and  limited  non-fossil 
interconnection  capacity, 
flexibility  and 
prices 
electricity 
Austria’s  wholesale 
averaged EUR 101/MWh in 2025 (EU average: 
EUR 85/MWh) (288),  still  the  11th  highest  in 
the EU. Although fossil fuels accounted for 16.9% 
of  Austria’s  electricity  generation  in  2025,  the 
fourth-lowest  share  in  the  EU,  they  maintained 
their  structural  role  as  the  dominant,  and  costly, 
marginal  price-setting  technology  (35%  of  price-
setting  hours  for  16.9%  of  electricity  generation). 
This 
is,  however,  significantly  below  the  EU 
average (51%).  

day-ahead 

Average 
prices 
increased  by  22%  in  the  first  half  of  2025 
amid  rising  natural  gas  procurement  costs. 
The short-run marginal costs (289) of natural gas in 

electricity 

(288) Ember. 

(289) Short-run marginal costs (SRMCs) are the sum of the variable 
costs associated with producing electricity using hard coal 
and fossil gas. These are fuel costs, carbon costs and 
variable operating and maintenance costs. Estimates are 
provided by Ember. 

85 

the  EU  increased  from  EUR 96/MWh  in  2024  to 
nearly  EUR 103/MWh  in  2025.  Although  daytime 
prices  have  fallen  in  recent  years  owing  to  the 
growing  penetration  of  solar  power,  Austria 
remains  vulnerable  to  severe  price  spikes  during 
peak-demand  hours.  This  is  because  falling  solar 
output in the evening and early morning, combined 
with  limited  non-fossil  flexibility,  has  led  to  a 
significant ramp-up of gas-fuelled plants to cover 
the  supply–demand  gap.  As  a  result,  price 
spreads (290)  in  Austria  averaged  EUR 112/MWh in 
2025, up 26% from 2024. 

Graph A9.2: Low-carbon electricity generation vs. 
electricity wholesale prices, 2025 

Unavailable data for Cyprus and Malta. Wholesale price is 
given as average of day-ahead electricity prices over 2025. 
EU-27 average is calculated as consumption-weighted. EU 
low-carbon share is calculated out of total EU electricity 
generation. Low-carbon share by country is calculated out of 
total public electricity generation. Low-carbon includes 
renewables and nuclear. 
Source: Eurostat 

Flexibility and electricity grids 

At  the  End  of  2025,  Austria  adopted  the 
Electricity  Act,  which  will  help  increase  the 
flexibility of the energy system. It replaces the 
outdated Electricity Sector Act  2010. The new Act 
represents  an  important  shift  in  the  regulatory 
framework  of  the  Austrian  energy  market.  It 
removes  regulatory  barriers  preventing  flexible 
resources,  such  as  demand-side  response  and 
storage,  from  fully  participating  in  the  day-ahead 
and intraday markets. Austria has also introduced 
detailed  grid-hosting  capacity  portals,  providing 
information  for  applicants  for  generation  or 

(290) ‘Spread’ refers to the difference between the highest and 
lowest hourly day-ahead electricity prices in a single day. 

 
 
 
 
 
demand  connection,  contributing  to  the  overall 
efficiency  of  the  system.  Full  results  of  the 
reforms  are  expected  to  be  seen  only  in  ‘two-  or 
three-years’’ time. 

is 

in  the  Core (291)  and 

Italy 
Austria 
North (292)  capacity  calculation  regions (293). 
Italy  North  mostly  meets  the  target  for  the 
margin  available  for  cross-zonal  electricity 
trade,  but  the  Core  region  does  not,  still 
applying derogations and action plans. Austria 
is  a  net  electricity  importer  (10%  of  its  own 
consumption),  exporting  significant  volumes  to 
Hungary  and  Slovenia,  while 
large 
volumes from Czechia and Germany.  

importing 

Member  States  are  to  ensure  that  at  least 
70%  of  technical  cross-border  capacity  is 
available  for  trading.  Austria’s  national  action 
plan  aims  to  increase  cross-border  capacity  to 
70%  by  reinforcing  the  electricity  grid  and  to 
address  uncoordinated  electricity  flows,  such  as 
loop  flows  and  flows  from  non-EU  countries.  Two 
outstanding  grid  expansion  and  reinforcement 
projects are expected to be implemented by 2027 
and  2031 (294).  However,  Austria 
issued  a 
derogation  due  to  excessive 
loop  and  other 
uncoordinated  flows (295).  A  derogation  allows  a 
lower  level  of  trades  for  a  limited  period  when 
necessary for operational security reasons. 

Austria  is  advancing  in  non-fossil  flexibility, 
despite  some  challenges.  The  country  has 
5 400 MW  of  electricity  storage (296),  mainly  from 
hydropower storage plants and pumped hydro (the 
for  approx.  3 600 GWh). 
latter  accounting 
Batteries  add  around  1 100 MW (297).  The  country 
is  planning  11 GW  of  additional  storage by  2040. 

(291) Core is the capacity calculation region (CCR) which covers 
Belgium Czechia, Germany, France, Croatia, Hungary, the 
Netherlands, Austria, Poland, Romania, Slovenia, Slovakia 
and, once connected, Ireland. 

(292) France, Italy, Austria and Slovenia are part of the Italy North 

CCR. 

(293) A CCR is a group of countries which calculate cross-border 

electricity trade flows together. 

(294) Source: ENTSO-E website, Bidding Zone Configuration 

Technical Report 2025. 

(295) Source: Assessment of the national action plan, Vienna 

2025. 

(296) Source: Austrian Power Grid (APG), Study: zusammEn2040. 

(297) Source: Austrian Power Grid (APG), Study: zusammEn2040. 

The  Climate  and  Energy  Fund  will  allocate 
EUR 250 million (in 2022 to 2026)  for storage at 
renewable  sites.  Major  future  projects  include  the 
Limberg 
(480 MW, 
III  pumped  hydro  plant 
850 GWh)  and  the  Kaunertal  storage  extension 
project of common interest (PCI) (64 GWh). 

or 

extension, 

following 

Austria’s  electricity  interconnection  is  at 
24.3%  in  2026,  well  above  the  EU’s  2030 
target  of  15.0%  interconnection  capacity. 
transmission, 
electricity 
The 
storage 
of 
projects 
hydrogen 
common/mutual  interest  (PCIs/PMIs)  aim  to 
improve  Austria’s  electricity  network  and 
that of the region. These projects are: Kaunertal 
storage 
cluster  Austria–Germany 
(composed of three PCIs, all of which concern the 
territory  of  Austria  and  of  which  the  internal 
section  between  Westtirol  and  Zell/Ziller  was 
selected  for  a  Connecting  Europe  Facility  (CEF) 
grant  for  studies  under  the  April  2025  CEF  call); 
the  interconnector  between  Würmlach  (AT)  and 
Somplago  (IT);  the  Lienz  (AT)  and  Veneto  (IT) 
interconnector;  and  the  Lienz-Obersielach  and  St. 
Peter-Dürnrohr 
in  the 
second Union PCI/PMI list.  

included 

internal 

lines, 

region 

country, 

however 

At  distribution  level,  the  GreenSwitch  smart 
grid  PCI  (HR,  AT,  SI),  supported  by  the  CEF, 
continues  to  help  modernise  and  digitise 
these countries’ electricity grids and increase 
their  hosting  capacity.  Austria  is  an  important 
transit 
asymmetrically 
interconnected  with  its  neighbouring  countries, 
with high price disparities especially on the eastern 
borders.  It  will  be  important  for  the  central  and 
south-eastern  European 
that  Austria 
expands  electricity  interconnections  towards  the 
region 
infrastructure  needs 
identified under the ten-year network development 
plan.  Internal  network  reinforcements  are  also 
important  in  the  context  of  the  overall  network 
development.  The  SoutH2  corridor  connecting 
Tunisia, 
Italy,  Austria  and  Germany  and  the 
H2Austria&Bavaria+Store  electrolyser  have  been 
included  in  the  second  PCI/PMI  list.  Austrian 
PCIs/PMIs  are  also  priority  infrastructure  projects 
under close monitoring by the high-level group for 
central 
energy 
and 
connectivity (CESEC) (298). 

line  with  the 

south-eastern 

Europe 

in 

(298) Endorsed at the 27 October 2025 CESEC ministerial meeting: 
central-and-south-eastern-europe-energy-connectivity_en. 

86 

 
 
 
Renewables and long-term contracts 

despite 

2025  was  a  very  good  year  for  Austria  in 
atypical  weather 
renewables, 
conditions,  with  weaker  wind  and  hydro 
generation. 83.1% (304) of the country’s electricity 
and  42%  of  its  heating  and  cooling  came  from 
renewable  energy  sources  (RESs),  mainly  from 
hydropower, solar and wind (vs an EU overall RES 
share  of  44.8%).  Hydro  represented  51.4%, 
biomass  6.1%  and  solar  13.7%  of  the  electricity 
mix.  Installed  renewables  capacity  increased  by 
7.5%  in  2025,  taking  total  renewable  energy 
capacity to 31 525 MW (305). In 2025, the country 
installed  0.2  GW  of  wind  (+ 4,8%  compared  to 
2024)  and  1.4 GW  of  solar  (+ 16%  compared  to 
2024),  a  slight  decrease  compared  to  2024 
expansion  rates.  As  part  of  European  wind  power 
action, Austria had committed to installing 1.4 GW 
of  onshore  wind  capacity  between  2024  and 
2026,  which  now  seems  out  of  reach.  Pumped 
hydropower  storage  capacity  grew  significantly  in 
2025,  with  0.5 GW  added  (mainly  through  the 
Limberg  III  plant).  RES  grid  connection  waiting 
times  remain  substantial,  with  up  to  eight  years 
being  reported  for  ground-mounted  solar  PV 
projects (306).  By  2030,  it  aims  to  increase  its 
overall  RES  share  to  at  least  57%,  with  100% 
RESs  in  the  electricity  sector,  53%  in  heating  and 
cooling and 43% in transport. 

Targeted 
remained 
redispatching  measures 
necessary to relieve grid congestion. By the end of 
December  2025,  redispatching  costs  totalled 
EUR 87.2  million  –  EUR 3.2  million  higher  than  in 
the  previous  year.  These  emergency  measures 
were required on 215 days in 2025, slightly more 
frequently  than  in  2024,  when  redispatching  had 
been  used  on  203  days  by 
the  end  of 
December (299). 

Austria  has  nearly  reached  full  coverage 
regarding  smart  meter  roll-out  and 
is 
in  energy 
continuing  the  positive  trend 
communities  and  consumer  empowerment. 
Electricity  consumers  in  Austria,  both  household 
and  non-household,  can  access  market-based 
offers,  such  as  fixed-price/fixed-term,  dynamic-
price and average monthly spot-price contracts. In 
2024, the household electricity switching rate rose 
to 4.6% (+ 21% compared to 2023), and the rate 
for  non-household  consumers  rose  to  4.4% 
(+ 10%  compared  to  2023) (300).  Austria  equipped 
97%  of  all  consumers  with  smart  meters  in 
2024 (301),  exceeding  its  goal  for  that  year,  and 
has  set  up  1 020  renewable  energy  communities 
and 109 citizen energy communities (302). 

final 

energy 

In  2024,  electricity  accounted  for  22.6%  of 
consumption, 
Austria’s 
marginally  below  the  EU  average  of  23.4%. 
This  share  has  increased  steadily  over  the 
past  decade (303).  When  it comes to  households, 
electricity  accounts  for  27.1%  of  final  energy 
consumption,  while  in  industry  it  represents  31% 
(see  also  Annex  8).  For  the  transport  sector,  this 
share remains negligible, at 4.6%. Further progress 
in  electrification  across  sectors  must  be  made  in 
order to cost-effectively decarbonise the economy 
and  bring  affordable  renewable  generation  to 
consumers. 

(299) Source: www.apg.at/en/news-press/december-2025-decline-

in-renewable-energy-production/. 

(300) 2025 ACER Market Monitoring Report and ACER Electricity 
country sheets – 2025 Monitoring Report, July 2025. 

(301) See note 16, page 4. 

(302) energiegemeinschaften.gv.at/landkarte/. 

(304) Data based on the ENTSO-E transparency platform. 

(303) CAGR (compound annual growth rate) of 1.04% between 
2015 and 2024 and minimum/maximum share of 20.5% 
and 22.6% respectively. Source: Eurostat. 

(305) Renewable capacity statistics 2026, IRENA. 

(306) Solar Power Europe, EU Market Outlook for Solar Power 

2023-2027. 

87 

 
 
 
Graph A9.3: Austria’s installed renewable capacity 
vs electricity generation mix 

Electricity mix is given as net electricity generation (gross 
electricity production minus consumption of power stations’ 
auxiliary services). Electricity produced in pumped hydro 
plants is excluded from total net electricity production, as it 
was previously counted as electricity produced from another 
source. 
“Other” includes renewable municipal waste, solid biofuels, 
liquid biofuels, and biogas. 
Source: IRENA, Eurostat 

Austria  has  taken  some  action  to  speed  up 
permit-granting  procedures  for  renewables 
with the reform of the Environmental Impact 
Assessment  Act,  but  challenges  remain. 
Although a coordinated mapping exercise has been 
carried out, designation of renewables acceleration 
areas  is  lagging,  with  only  one  region  having 
adapted its spatial planning legislation to allow for 
such designation.  

on 

implementation  of  the  revised  EU 
The 
permitting  rules  was  delayed  due  to  the 
national  elections  and  because  powers  are 
divided  between  federal  and  state  levels. 
There  is  thus  room  for  further  improvement  to 
reduce  the  length  of  the  RES  permit-granting 
procedure, especially taking into consideration the 
permit-granting 
speeding  up 
guidance 
procedures (307).  There  are  ongoing  infringement 
procedures against Austria for failure to transpose 
the  provisions  of  the  revised  Renewable  Energy 
Directive, including the permit-granting provisions. 
On  the  positive  side,  favourable  frameworks  for 
energy communities and public participation in RES 
projects  have  boosted  renewables  deployment, 
and  the  newly  adopted  Electricity  Act  should 
favour  the  integration  of  renewables  into  the 
system. 

system, 

premium 

Austria  moved  from  feed-in  tariffs  to  a 
on 
market 
competitive  tenders  (introduced  from  2022 
onwards).  However, 
frequently 
undersubscribed and more clarity is needed on the 
future  support  schedule,  as  only  the  auctions  for 
2026 have been published (308). 

tenders  are 

based 

The  pertinent  regulatory  framework  for 
incentivising  power  purchase  agreements 
(PPAs),  the  Electricity  Act,  was  adopted  at 
the  end  of  2025.  Currently,  PPAs  are  limited  in 
Austria,  with  0.1 GW  contracted (309),  representing 
2%  of  PPA  deals  signed  in  the  EU  and  Norway in 
2024.  Austria  plans  to  strengthen 
legal 
framework  for  PPAs,  in  accordance  with  its  final 
updated  NECP,  but  no  supporting  measures  have 
so  far  been  developed (310).  Since  2025,  new 
guidelines  have  enabled  PV  projects  to  receive 
subsidies even if they have a PPA in place, offering 
energy 
a 
development  in  the  country.  PPA  demand  is 
expected to reach 3 TWh in 2030. 

substantial 

incentive 

solar 

for 

its 

Energy efficiency 

In  2024  final  energy  consumption  (FEC) 
decreased  by  1.0%,  compared  to  2023,  to 
24.4 Mtoe,  continuing  the  declining  trend 
since 2019. Austria’s FEC in 2024 is thus in line 
with 
its  expected  NECP 
to 
contribution in 2030. 

trajectory 

the 

While FEC decreased substantially in industry 
(8.9%  since  2019),  services  (13.8%)  and 
transport  (15.5%),  it  has  remained  nearly 
constant  in  the  residential  sector,  with  a 
very  slight  decrease  of  0.6%  since  2019. 
Significant  technical  energy  savings  in  buildings 
including  through  structural  measures,  such  as 
renovations (311),  have  been  largely  offset  by  the 
expansion of the housing stock and an increase in 
the average dwelling size. The marked reduction in 
FEC in the transport sector reflects a combination 

(308) www.eag-abwicklungsstelle.at/foerderkalender/. 

(309) PPA deal tracker – RE-Source platform. 

(307) European Commission, 2024, Recommendation-and-

guidance-speeding-permit-granting-renewable-energy-and-
related-infrastructure_en. 

(310) 2025 ACER Monitoring Report: power purchase agreements, 

country sheets. 

(311) www.indicators.odyssee-mure.eu/decomposition.html. 

88 

 
 
 
 
of  structural  and  behavioural  factors,  including  a 
gradual  modal  shift  towards  public  transport  and 
rail,  efficiency  gains  from  fleet  renewal  and 
increased  uptake  of  electric  vehicles,  as  well  as 
lasting  changes  in  mobility  patterns.  Targeted 
policy  measures  promoting  sustainable  mobility, 
also  included  in  Austria’s  recovery  and  resilience 
plan (RRP), have reinforced this trend. 

funding 

catalogue  with 

Austria has advanced its policy and financing 
framework  to  support  energy  efficiency.  The 
Federal  Ministry  of  Climate  Action  published  its 
targeted 
2025 
programmes  for  energy  efficiency  improvements, 
building  renovation,  boiler  replacement  initiatives 
and  industry  transformation  support,  combining 
grant  and  financing instruments to  reduce  energy 
demand.  A  broad  set  of grants  and  incentives  for 
energy-efficient 
system 
upgrades  and  related  projects  remained  available 
throughout  2025  and  into  2026,  albeit  at  a 
reduced 
for  budget 
consolidation. 

renovation,  heating 

level,  given 

the  need 

The  Renewal  Heating  Law,  a  reform  under 
the  RRP,  banned  the  installation  of  fossil 
heating systems in new buildings from 2025 
onwards. Austria is supporting the replacement of 
fossil  boilers  in  existing  buildings  by  climate-
friendly heating systems and the renovation bonus 
for  thermal  energy  renovations.  However,  funding 
applications  for  the  renovation  bonus  have  not 
been available since February 2026. In 2024, 73% 
of investment in boiler exchange programmes was 
dedicated  to  biomass  boilers,  while  investment 
was fairly moderate (23%) in heat pumps and low 
in  district  heating  connection  (4%).  The  Austrian 
RRP funded the replacement of 31 800 fossil-fuel 
based heating systems. 

35.4%  of  the  energy  consumed  in  Austria  is 
used in buildings, highlighting the importance 
of  the  sector  in  increasing  energy  security. 
Austria  has  submitted  its  draft  national  building 
renovation  plan  pursuant  to  the  recast  EPBD  in 
order  to  ensure  a  clear  and  predictable  pathway 
towards  an  energy-efficient  and  decarbonised 
building stock. 

residential 

Heating  and  cooling  account  for  80%  of  the 
energy 
country’s 
consumption, with renewables supplying 42% 
of  the  total  energy  used  for  heating  and 
cooling in all sectors. District  heating in Vienna 
is  one  of  Europe’s  front  runners  in  implementing 

final 

energy efficiency and decarbonisation measures in 
the  district  heating  and  cooling  sector.  Around 
55 000  heat  pumps  were  sold  in  2024,  an 
increase of 0.11% compared to the previous year, 
taking  the  total  stock  of  heat  pumps  to  around 
900 000 
530 000,  whereas 
households heat their homes with a gas boiler. 

approximately 

Austria  reported  83  energy  labelling  checks 
in  2025  and  no  ecodesign  checks.  This  is 
insufficient  given  the  country’s  size  and  the  EU’s 
overall  non-compliance  levels.  It  is  a  possible 
breach of Austria’s legal obligations. 

Security of supply and diversification 

its 

long-term  gas 
Austria’s  OMV  ended 
supply  contract  with  Gazprom  Export  in 
November  2024.  With  Russian  gas  transit  via 
Ukraine  ending  on  1 January  2025,  Austria 
secured  gas  imports  from  Germany,  Italy  and 
Norway, ensuring a smooth transition. 

Two thirds of Austria’s overall energy mix in 
2024 remained reliant on fossil fuels, with oil 
accounting  for  34%,  natural  gas  18%  and 
(imported)  coal  7%  of  gross  inland  consumption, 
while 
(and  biofuels)  made  up 
38% (312). 
the 
reliance 
importance  of  Austria’s  ongoing  efforts  in  its 
energy  transition  to  diversify  its  energy  sources 
and increase energy security. 

underscores 

renewables 

This 

reserves 

In  response  to  the  regional  crisis  in  the 
Middle  East,  Austria  has  extended  strategic 
until  April  2029  and 
gas 
accelerated  production  from  its  largest  gas 
field. To stabilize fuel prices, Austria implemented 
a  "price  brake"  mechanism  requiring  a  5-cent 
deduction  from  average  fuel  prices  and  limiting 
price  adjustments  to  once  daily,  while  mandating 
that  refineries  pass  savings  to  consumers.  A 
voluntary  energy-saving  campaign  focused  on 
mobility is also planned, alongside participation in 
the IEA's collective oil stock release.  

(312) Eurostat. Electricity and heat are excluded from gross inland 
consumption to avoid double counting. The focus is on 
primary energy sources. 

89 

 
 
Fossil fuel subsidies 

In  2024,  environmentally  harmful (313)  fossil 
fuel  subsidies  without  a  planned  phaseout 
before  2030  represented  0.01%  of  Austria’s 
GDP. Additionally, Austria’s 2023 effective carbon 
rate (314)  averaged  EUR 89.88  per  tonne  of  CO₂  – 
above the EU weighted mean of EUR 84.80 (315). 

(313) Explicit fossil fuel subsidies (e.g. direct transfers) and implicit 
fossil fuel subsidies (i.e. tax expenditures linked to forgone 
tax revenues that have an identifiable fiscal impact for the 
central budget) that support fossil fuel energy production, 
transmission and/or consumption.  

(314) The effective carbon rate is the sum of carbon taxes, ETS 
permit prices and fuel excise taxes, representing the 
aggregate effective carbon rate paid on emissions. 

(315) OECD (2024), Pricing Greenhouse Gas Emissions 2024. 

90 

 
 
ANNEX 10: CLIMATE ADAPTATION, PREPAREDNESS AND ENVIRONMENT 

in 

climate 

systems, 

including 

increasing 
advancements 

Austria’s 
challenges 
adaptation, 
require 
preparedness  and  environmental  strategies 
to  safeguard  its  ecosystems,  economy  and 
infrastructure.  The  country  faces  significant 
climate  change impacts, such as  floods, droughts, 
heat  waves,  glacier  melting  and  seasonal  water 
scarcity  in  Eastern  regions.  These impacts lead to 
economic  burdens  across  various  sectors  and 
insurance 
the 
Katastrophenschutzfonds.  Despite  progress,  such 
as  implementing  policies  and  integrating  nature-
based  solutions,  enhanced  actions  and  increased 
funding  are  needed  to  manage  rapidly  growing 
climate risks. In addition, water resilience is a key 
issue  due  to  rising  demand  and  diminishing 
enhanced  management 
resources, 
practices. With 60% of its electricity sourced from 
hydropower,  the  resulting  impoundments  place 
considerable  pressure  on  the  ecological  status  of 
water bodies. Biodiversity is threatened, with most 
species  and  habitats  in  poor  conservation  status. 
This  is  worsened  by  habitat  degradation,  invasive 
species  and  pollution.  Austria’s  agricultural 
practices  contribute  to  ongoing  nitrate  pollution, 
with  concentrations  above  safe  levels  at  multiple 
monitoring  stations.  The  carbon  removals through 
LULUCF  are  presently  insufficient  to meet targets 
due to ageing forests and ecological pressures. 

requiring 

Climate adaptation and preparedness 

experiences 

Austria  is  highly  exposed  to  climate  change 
impacts which will require significant actions 
and  investments  across  sectors  (316).  The 
country 
higher-than-average 
a 
temperature  increase,  leading  to  more  hot  days 
and  tropical  nights.  Urban  areas  are  particularly 
vulnerable  to  heat  waves.  Due  to  the  melting  of 
glaciers  (a  40%  loss  of  Austria’s  glacier  area 
between  1969  and  2015)  and  reduced  snowfall, 
Austria’s  challenges  to  manage  water  resources 
will  increase  over  the  coming  years.  Austria’s 
Eastern regions already experience seasonal water 
scarcity  and  are  vulnerable  to  droughts.  At  the 
same time, Austria can expect more frequent and 
severe  floods,  causing  mudslides,  landslides  and 
rockfall  due  to  thawing  permafrost  and  heavy 

(316) APCC, 2025, Second Austrian Assessment Report on Climate 

Change (AAR2). 

91 

rainfall.  These  changing  climate  conditions  are 
already  affecting  multiple  sectors  in  Austria  (317). 
Forests  are  becoming  more  susceptible  to  pests, 
invasive  species  and  wildfires;  agriculture  suffers 
from water shortage during droughts, reducing soil 
fertility and crop yields; aquaculture is exposed to 
temperature variability in water;  tourism in lower-
elevation  ski  resorts  faces  challenges  due  to  lack 
of snowfall; and hydroelectric power generation is 
affected by reduced river flows. To address these 
impacts,  available  sources  estimate  that  federal 
spending  on  climate  adaptation,  currently  around 
EUR 1  billion  annually,  will  need  to  more  than 
(318).  A  recent  study 
double  by  mid-century 
commissioned  by  DG  CLIMA  estimates  (319)  that 
Austria  will  need  to  invest  almost  EUR 1.6  billion 
per  year  up  to  2050  (0.3%  of  annual  GDP,  lower 
than the EU  average of 0.5%): first and foremost 
in  infrastructure  retrofitting  and  reinforcement 
(almost 50% of the total), followed by ecosystems 
restoration  (around  29%  of  the  total)  and  health 
(around 14% of the total). 

Austria  has  been  progressing  in  climate 
change  adaptation,  but  significantly  more 
needs to be done to address rapidly growing 
climate  risks.  The  second  Austrian  Assessment 
Report  on  Climate  Change  (AAR2),  published  in 
June  2025,  concludes  that  adaptation  efforts 
remain  insufficient  in  scale,  scope  and  speed  to 
address increasing climate risks. It highlights gaps 
in  legal  enforceability,  resource  allocation  and 
long-term planning. At the same time, Austria was 
one  of  the  first  EU  countries  to  link  strategic 
concepts to concrete action plans with its national 
adaptation  strategy,  published  in  2012.  The  third 
version of the strategy, adopted in 2024, includes 
an  action  plan  with  over  120 
specific 
recommendations  across  14  areas  of  activity. 
Regular  reports  track  progress,  with  the  third 

(317) Federal  Ministry  of  Climate  Action,  Environment,  Energy, 
Mobility,  Innovation  and  Technology,  2024,  The  Austrian 
Strategy for Adaptation to Climate Change. 

(318) Steininger  et  al.,  2020,  Klimapolitik 

in  Österreich: 
Innovationschance  Coronakrise  und  die  Kosten  des  Nicht-
Handelns. 

(319) European Commission, 2026, Assessment of EU and Member 
States  Adaptation  Investment  Needs.  The  study  provides 
detailed  estimates  of  adaptation  investment  needs  at  the 
level  of  the  EU  and  individual  Member  States  per  type  of 
measure.  It  relies  on  a  common  methodology  that  makes 
estimates  comparable  across  the  EU.  Four  accompanying 
methodological reports provide a detailed description of how 
the results were estimated to ensure full transparency. 

 
 
 
 
 
into 

change  adaptation 

iteration  expected  by 
the  end  of  2026. 
Furthermore,  Austria  is  taking  steps  to  integrate 
climate 
its  policy 
framework. The pending new climate law is set to 
establish  adaptation  as  a  key  pillar,  alongside 
mitigation  and  circular  economy  (320).  In  June 
2025,  Austria  adopted  the  new  ‘climate  check’  as 
part  of  its  RRP  (321),  requiring  regulatory  impact 
assessments  to  cover  climate  issues,  including 
adaptation. Moreover, some sectoral initiatives are 
also underway, such as the health sector’s climate 
resilience plan  (322) and studies on water  (323) and 
forests (324), aimed at improving the understanding 
and  management  of 
resources. 
Additionally,  progress  has  been  made  in  updating 
the  Austrian  Climate  Scenarios  (ÖKS)  (325),  which 
provide  climate  information  for  policymakers  and 
the public. The new version builds on the previous 
ÖKS15  and  is  expected  to  be  published  in  2027. 
Moreover,  the  Natural  Hazard  Overview  &  Risk 
Assessment  Austria  (HORA)  (326),  a  public-private 
partnership that involves the insurance sector and 
provides  interactive  maps  and  information  on 
natural  hazards,  has  been  enhanced  with  a  new 
heat  layer,  indicating  heat  days,  heat  waves, 
extreme heat days and tropical nights. The country 
also  recognises  innovative  and  effective  climate 
adaptation  projects,  as  seen  in  the  CliA  Austrian 
State  Prize  for  Climate  Change  Adaptation  (327), 
which was awarded again in March 2026 after its 

these  vital 

(320) Federal  Ministry  of  Agriculture  and  Forestry,  Climate  and 
Environmental  Protection,  Regions  and  Water  Management, 
2026, Die Eckpunkte des neuen Klimagesetzes. 

(321) Parlament  Österreich,  2025,  11645/BR  der  Beilagen  - 

Ausschussbericht BR - Berichterstattung. 

(322) Federal  Ministry  of  Labour,  Social  Affairs,  Health,  Care  and 
des 

Klimaresilienz 

2024, 

Consumer 
Gesundheitssystems: Zielkatalog. 

Protection, 

(323) Federal  Ministry  of  Agriculture  and  Forestry,  Climate  and 
Environmental  Protection,  Regions  and  Water  Management, 
2026,  Wasser  im  Klimawandel  -  eine  Studie  über  die 
Auswirkungen. 

(324) Federal  Ministry  of  Agriculture  and  Forestry,  Climate  and 
Environmental  Protection,  Regions  and  Water  Management, 
II:  Waldfonds-Projekt:  Erarbeitung  der 
2026,  FORSITE 
Grundlagen 
ökologischen 
dynamische 
Waldtypisierung 
in  Oberösterreich,  Niederösterreich  und 
Burgenland. 

eine 

für 

first  iteration  in  2024.  Furthermore,  there  are 
several initiatives supporting the local and regional 
levels.  The  funding  programme  KLAR!  Climate 
Change  Adaptation  Model  Regions  (328)  supports 
adaptation  in  93  regions  with  743  municipalities, 
third  of  all  Austrian 
covering  around  one 
municipalities.  However,  from  2025  onwards,  the 
programme  was  limited  to  ongoing  projects,  with 
no  new  regions  or  KLAR  Invest.  In  addition,  the 
share  of  Austria’s  population  covered  by  EU 
Covenant  of  Mayors  signatories  has  been 
stagnating  and  stood  at  25%  (vs  EU27:  34%)  in 
2024.  One  fifth  of  signatories  have  submitted  a 
sustainable energy and action plan (SECAP) and at 
least  one  monitoring  report  on  time.  The  KWAN 
network  (329)  provides  a  platform  for  cooperation 
and  exchange  of  experience  among  practitioners. 
The  natural  hazard  and  climate  change  check  for 
municipalities  (330)  raises  awareness  and  shows 
the needs for action in individual areas. In addition, 
a pilot training course on municipal climate change 
adaptation  has  been  developed  to  further  inform 
local  authorities.  Moreover,  building  on  the  EU 
Mission  on  Adaptation  to  Climate  Change,  Austria 
to 
developed  a  central  competence  centre 
facilitate  efficient 
information  exchange  and 
synergies (331). 

Climate  risks  have  a  direct  and  significant 
effect  on  Austria’s  economy  while  the 
insurance  coverage  remains  relatively  low. 
recorded 
Between  1980  and  2024,  Austria 
EUR 19.8  billion  in  economic  losses  caused  by 
weather- and climate-related extreme events, with 
only  19%  of  these  losses  covered  by  insurance 
(332). Average annual net damages are projected to 
reach  EUR 2.5-5.2  billion  by  2030  and  at  least 
EUR 4.3-10.8 billion by 2050, with peak-year flood 
losses  potentially  exceeding  EUR 5-8  billion  (333). 
rising  costs  heavily  burden  Austria’s 
These 

(328) Klima-  und  Energiefonds,  2026,  KLAR!  Climate  Change 

Adaptation Model Regions. 

(329) Klima-  und  Energiefonds,  2026,  Österreichisches  Netzwerk 
innovativer  Klimawandelanpassung  für  Praktiker:innen  auf 
regionaler Ebene. 

(330) Environment  Agency  Austria,  2026,  Natural  hazard  and 

climate change check for municipalities. 

(325) Climate Change Centre Austria, 2026, klimaszenarien.AT. 

(331) FFG, 2026, Mission "Klimawandelanpassung". 

(326) Federal  Ministry  of  Agriculture  and  Forestry,  Climate  and 
Environmental  Protection,  Regions  and  Water  Management, 
2026, Natural Hazard Overview & Risk Assessment Austria. 

(327) Klima-  und  Energiefonds,  2026,  CliA  –  Österreichischer 

Staatspreis für Klimawandelanpassung. 

(332) European Environment  Agency, 2024,  Economic losses  from 

weather- and climate-related extremes in Europe. 

(333) Steininger  et  al.,  2020,  Klimapolitik 

in  Österreich: 
Innovationschance  Coronakrise  und  die  Kosten  des  Nicht-
Handelns. 

92 

 
 
 
Katastrophenschutzfonds,  which  is  financed  by  a 
proportion of federal taxes (334).  In the future, the 
fund  risks  facing  a  structural  deficit,  as  damages 
outpace  tax-linked  revenues.  This  situation  has 
already  occurred  in  2002,  2005,  and  2013,  when 
major floods required emergency ad hoc increases 
in  funding.  In  the  aftermath  of  such  events, 
domestic  debate  consistently  shifts 
toward 
comprehensive  insurance  reform,  as  the  current 
incentives  for  private 
system  provides  few 
reliance  on  state 
provision  and 
individual  risk 
compensation  that  discourages 
insurance 
mitigation.  To  reduce  the  climate 
protection  gap,  Austria’s  national  adaptation 
strategy  makes  three  concrete  recommendations. 
‘Raising  awareness  among  the 
This 
to  avoid  damaging  events  and 
population 
strengthening  personal 
through 
services  of  the  insurance  industry’,  ‘Better  risk 
diversification  for  insurers  and  thus  increased 
insurability  of  climate-  and  weather-induced 
losses’,  and 
transfer 
‘Optimisation  of 
mechanisms’. 

responsibility 

fosters  a 

includes 

risk 

risks.  As 

from  climate 

is  needed  as  the  shift  to  a  more  decentralised 
energy system imposes greater demands on grids, 
increasing 
flexibility,  and  storage,  alongside 
challenges 
regards 
transport,  Austria  has  one  of  the  lowest  levels  of 
vulnerability to changing climate conditions in the 
EU,  reflecting  high  adaptation  preparedness  of  its 
TEN-T  network  (338).  Transport  providers,  including 
rail and road, have disaster management plans in 
place,  with  significant  progress  made  in  recent 
years  regarding  information  and  early  warning 
systems.  The  introduction  of  AT-ALERT  across 
important 
Austria 
information  source  for  transport  users.  To  further 
reduce the vulnerability of transport infrastructure, 
adapting  regulations  and  protection  targets  is 
essential,  particularly  concerning  the  sizing  of 
flood  protection  measures.  Currently,  protection 
targets are often not aligned with climate change-
related developments, such as shifts in the annual 
intensity  of  extreme  weather 
frequency  and 
events. 

in  2024  serves  as  an 

Austria  has  taken  steps  to  reduce  the 
vulnerability  of  its  energy  and  transport 
infrastructure  to  climate  change  risks.  In 
September  2025,  the  Austrian  National  Council 
passed  the  Critical  Entities  Resilience  Act  (335), 
transposing  Directive  2022/2557.  The  legislation 
mandates a national risk assessment and requires 
critical  infrastructure  to  address  various  risks, 
including  climate-related  ones.  Similarly,  Austria’s 
legislation  on  environmental  impact  assessments 
requires  climate  change  impacts  on  different 
infrastructure  types  to  be  taken  into  account. 
Austria  currently  possesses  a  reliable  energy 
infrastructure  with  high  grid  security.  Recent  data 
also reflects stable security  of supply. Progress is 
evident  through  planning  tools  like  the  Integrated 
Austrian  network  infrastructure  plan  (ÖNIP)  (336). 
Cooperation  between  energy  and  climate  science 
is  crucial  and 
increasingly  occurring,  as 
demonstrated  by  projects  like  the  Austrian  Power 
Grid 
initiative 
Klimacheck  (337).  Nevertheless,  further  adaptation 

risk  management 

climate 

is 

(334) Federal Ministry of Finance, 2026, Katastrophenfonds. 

(335) Parlament 

Österreich, 

2025, 

Resilienz 

kritischer 

Einrichtungen-Gesetz. 

(336) Federal  Ministry  of  Economy,  Energy  and  Tourism,  2026, 
Integrierter österreichischer Netzinfrastrukturplan (ÖNIP). 

(337) Austrian Power Grid, 2026, Klimacheck. 

93 

for 

theme 

outlines 

biodiversity 

strategy  2030+ 

and 
implementing 

Austria  has  begun  to  incorporate  nature-
based solutions into its policy framework. The 
(339) 
Austrian 
highlights climate change adaptation as a central, 
cross-cutting 
specific 
nature-based 
measures 
solutions.  The  Austrian  floodplain  strategy  2030+ 
(340)  and  moorland  strategy  2030+  (341)  integrate 
adaptation, mitigation and biodiversity goals into a 
cohesive  framework,  underscoring  the  importance 
of  considering  nature  conservation  and  climate 
resilience in tandem. Additionally, the preservation 
of  green  spaces,  which  offer  heat  reduction  and 
water 
to  be  further 
is  expected 
integrated into local  and regional  spatial  planning 
and is set as a key objective in the Austrian spatial 
development  concept  ÖREK  2030  (342).  Moreover, 

retention, 

(338) Schade et al., 2024, Support study on the climate adaptation 
and  cross-border  investment  needs  to  realise  the  TEN-T 
network. 

(339) Federal  Ministry  of  Agriculture  and  Forestry,  Climate  and 
Environmental  Protection,  Regions  and  Water  Management, 
2022, Biodiversitäts-Strategie Österreich 2030+. 

(340) Federal  Ministry  of  Agriculture  and  Forestry,  Climate  and 
Environmental  Protection,  Regions  and  Water  Management, 
2023, Auenstrategie Österreich 2030+. 

(341) Federal  Ministry  of  Agriculture  and  Forestry,  Climate  and 
Environmental  Protection,  Regions  and  Water  Management, 
2022, Moorstrategie Österreich 2030+. 

(342) Österreichische  Raumordnungskonferenz,  2021,  Beschluss 

und Veröffentlichung ÖREK 2030 – Raum für Wandel. 

 
 
 
the agri-environmental programme (ÖPUL) (343), in 
which around 80% of Austrian farmers participate, 
promotes  environmentally  friendly  and  extensive 
agricultural practices that protect natural habitats, 
support  nature-based  solutions  and  biodiversity, 
and  contribute  to  climate  change  adaptation 
through  soil  management  practices.  Furthermore, 
numerous  research  and  implementation  projects 
are  advancing  nature-based  solutions  across 
various domains. These include efforts such as the 
renaturation  of  watercourses, 
restoration  of 
moors, 
the  development  of  climate-resilient 
forests,  and  urban  initiatives  like  sponge  city 
green 
projects 
that 
infrastructure.  Examples 
IRIS  – 
Integrated River Solutions in Austria (344) and LIFE 
AMooRe – Austrian Moor Restoration (345). 

and 
include  LIFE 

enhance 

blue 

Water resilience 

Due  to  climate  change  and  the  demographic 
evolution,  Austria’s  demand  for  water  until 
2050  is  estimated  to  increase  by  11%-15% 
while  water  resources  will  decline  by  up  to 
23% (346). Glacier melting and reduced snowfall in 
Alpine  regions  will  render  water  supply  more 
erratic,  creating  a  significant  challenge 
for 
Austria’s  water  quantity  management.  Austria’s 
Eastern  regions  will  suffer  from  reduced  water 
availability which can also increase the density of 
pollutants  in  their  surface  water  bodies.  Flood 
protections  will  need  reinforcements  using,  where 
possible,  nature-based  solutions  to  retain  more 
precipitation in the soil and prevent urban run-off. 

Austria  faces  emerging  seasonal  water 
levels, 
scarcity  and 

lower  groundwater 

(343) Federal  Ministry  of  Agriculture  and  Forestry,  Climate  and 
Environmental  Protection,  Regions  and  Water  Management, 
2023,  Österreichisches  Programm  zur  Förderung  einer 
umweltgerechten, 
natürlichen 
Lebensraum schützenden Landwirtschaft. 

extensiven 

den 

und 

(344) Federal  Ministry  of  Agriculture  and  Forestry,  Climate  and 
Environmental  Protection,  Regions  and  Water  Management, 
2026,  LIFE  IP  IRIS  AUSTRIA  -  Integrated  River  Solutions  in 
Austria. 

(345) Federal  Ministry  of  Agriculture  and  Forestry,  Climate  and 
Environmental  Protection,  Regions  and  Water  Management, 
2026, AMooRe – Austrian Moor Restoration. 

especially  in  its  Eastern  parts.  While  Austria 
generally  has  abundant  water  resources,  the 
distribution  and  availability  are  becoming 
increasingly uneven. Agriculture, water utilities and 
energy  production  are  among  the  most  water-
(347).  The  national  water 
dependent  sectors 
exploitation  index  plus  (WEI+)  (348),  a  measure  of 
how much water is being used compared with the 
total renewable freshwater resources available for 
a  given  territory  and  period,  indicates  low  overall 
pressure  due  to  abundant  renewable  freshwater 
resources. 

Water  productivity  in  Austria  (349)  stood  at 
EUR 91  per  m³  of  abstracted  water  in  2022, 
below the EU-27 average of EUR 151 per m³, 
reflecting  low  incentives  for  efficiency  due 
to abundant water availability. In 2023, public 
water  supply  accounted  for  17%  of  freshwater 
abstraction,  with  energy  production  at  45%(350). 
60%  of  Austria’s  electricity  mix  is  based  on 
hydropower. 

In  contrast  to  other  European  countries, 
Austria  is  currently  only  using  water  from 
groundwater  and spring  sources for drinking 
water  supply  and  is  therefore  not  reliant  on 
the use of extensively treated surface water. 
However, studies estimate that groundwater levels 
will  further  decrease  and  might  not  be  able  to 
meet the water demand in certain Eastern regions 
(351).  Austria’s  water 
resource 
by  2050 
management  must  consequently  be  improved 
using  digital  tools  and  demand  reduced  through 
higher efficiency. 

The  good  ecological  status  of  Austria’s 
surface  water  bodies  has  slightly  improved 
between 
river  basin 
management  plan  (RBMP)  from  46.6%  to  49.3% 

the  second  and 

third 

(347) EEA, Water abstraction by economic sector, 2000-2023, 

2025.  

(348) Eurostat, Water Exploitation Index, plus.  

(349) Water  productivity  is  a  metric  that  is  calculated  by  dividing 
GDP  (in  chain-linked  volume)  by  total  water  abstraction.  It 
indicates the average economic value (GDP) a Member State 
creates for each unit of water it takes from nature. 
(350) EEA, Water abstraction by economic sector, 2000-2023, 

2025.  

(346) Federal Ministry Republic of Austria, 2023, Austria’s Water 

(351) Federal Ministry Republic of Austria, 2023, Austria’s Water 

Treasure, Link. 

Treasure, Link. 

94 

 
 
 
 
(352).  Main  pressures  remain  impoundments  for 
hydropower  and  flood  protection.  It  is  worrying 
that compared to the previous RBMP cycle, Austria 
increased the designation of heavily modified river 
bodies  from  627  to  880  (+  40%),  due  to  a  re-
classification  of  river  bodies  located  in  urban 
areas. Nevertheless, this means that 12.3% of all 
rivers  measured  by  length  are  by  now  heavily 
modified in Austria and only 18% of them are still 
in  their  natural  state  (353).  Furthermore,  with 
already  over  5 200  hydropower  plants, 
the 
majority  of  which  are  small  and  very  small 
hydropower plants in beaks and rivers (354) Austria 
to increasing hydropower by 5 TWh by 2030 which 
may  further  increase  pressures  on  rivers.  Priority 
should be given to retrofitting existing hydropower 
to  building  additional 
plants  as  opposed 
impoundments 
the 
ecological  status  of 
rivers  and  beaks 
concerned. 

that  would  deteriorate 

the 

A  recent  study  analysed  the  restoration 
potential  of  free  flowing  rivers  in  Austria 
(355).  The  study  shows  that  the  first  steps  have 
already been taken and that renaturation projects 
in  Austria  can  be  quite  successful.  However, 
political  support  and  sufficient  financial  resources 
are  needed  to  achieve  the  objectives  of  the  EU 
Nature Restoration Regulation. 

and 

toxic 

Regarding the chemical status of the surface 
water  bodies,  none  achieve  a  good  chemical 
status  due  to  two  ubiquitous,  persistent, 
bioaccumulative 
substances 
(uPBTs),  mercury  and  brominated  diphenyl 
ethers,  which  can  lead  to  a  health  risk  for 
humans  via  the  food  chain.  However, 
if 
excluded from the assessment, 98.4% of Austria’s 
surface  water  bodies  can  be  considered  as 
achieving  a  good  status  and  the  trend  would  be 
slightly positive compared to the second RBMP(356). 

(352) WISE, Surface water Bodies: ecological status or potential. 

Link. 

(353) Umweltbundesamt, Dashboard Fließgewässer-Zustand. 

(354) European Commission, Third River Basin Management Plans. 
Second Flood Hazard and Risk Maps and Second Flood Risk 
Management Plans. Member State: Austria, 2025. Link. 

(355) WWF, blattfisch, Potential für die Wiederherstellung frei 

fließender Flüsse in Österreich, 2024. Link. 

(356) European Commission, Third River Basin Management Plans. 
Second Flood Hazard and Risk Maps and Second Flood Risk 
Management Plans. Member State: Austria, 2025. Link. 

The  water  network  infrastructure  in  Austria 
is  extensive  and  well  developed.  Investments 
in  reservoirs,  interconnections  and  infrastructure 
upgrades  are  already  in  place  to  reduce  local 
water scarcity issues. That said, in Eastern Austria 
and  around  the  capital  Vienna,  water  scarcity  can 
become  a  more  frequent  seasonal  phenomenon 
which  will  gradually  increase  pressure  on  the 
existing supply infrastructure. 

Austria  can  meet  its  drinking  water  needs 
entirely from protected groundwater sources 
and  wells.  Drinking  water  mostly  reaches 
consumers  untreated  and 
in  excellent 
quality. The study ‘Austria’s Water Treasure’ (357), 
initiated  by  the  Federal  Ministry  of  Agriculture, 
Regions  and  Tourism,  aims  to  ensure  sustainable 
management and protection of Austria’s abundant 
groundwater  and  drinking  water 
resources, 
securing  their  availability  and  quality  up  to  2050 
in  the  context  of  climate  change  and  increasing 
demand. 

Austria  is  fully  compliant  with  the  Urban 
Wastewater  Treatment  Directive  (UWWTD 
91/271/EEC).  That  means  that  the  collection, 
biological treatment and biological treatment with 
nitrogen  and/or  phosphorus  removal  of  urban 
wastewater is in line with the requirements of the 
EU  legislation.  This  is  above  the  EU  average  of 
75.9% (358). 

to 

climate 

change, 

In view of possible drinking water shortages 
due 
Austrian 
municipalities  are investing  more  in  drinking 
like  connecting 
water  supply  measures, 
separate  groundwater  bodies  through  ring 
increased  use  of  wells. 
pipelines  and 
the 
costs 
Unfortunately,  operating 
collecting  systems  and  urban  wastewater 
treatment plants (UWWTPs) are not available 
(359).  Overall,  Austria  still  needs  to  invest  around 
EUR 389 million per year (0.09% of GDP), with the 
major  part  related  to  wastewater,  to  close  the 
various 
investment 

and  meet 

gap 

the 

in 

(357) Federal Ministry Republic of Austria, 2023, Austria’s Water 

Treasure, Link. 

(358) Austria | Country profiles on urban waste water treatment | 

WISE Freshwater. 

(359) Internal documents, implementation of Directive 91/271/EEC 

(UWWTD), 2022. 

95 

 
 
 
 
environmental targets under the Water Framework 
Directive and the Floods Directive (360). 

Nature restoration 

loss  through 

Austria’s  economy is structurally  exposed to 
its  dependency  on 
nature 
ecosystem  services  (361).  About  46%  of  gross 
value added (GVA) relies directly on the ecosystem 
– just above the EU  average of 44%  - keeping in 
mind  that  the  entire  economy  is  vulnerable  to 
nature  degradation,  as  all  sectors  are  interlinked 
through 
connections, 
potentially  leading  to  cascading  effects  along 
value chains (362). 

supply  and 

customer 

Despite Austria’s rich biodiversity – reflected 
in  29.3%  (363)  of  its  territory  designated  as 
protected  areas  –  habitat  degradation  is 
increasingly widespread. Despite improvements 
in  the  level  of  site  protection  and  increased 
restoration efforts over recent decades, the status 
of  many  habitats  and  species  in  Austria  have 
continued  to  deteriorate  (364).  Overall,  more  than 
80%  of  the  species  and  habitat  types  protected 
under  the  Fauna-Flora-Habitat  Directive  fail  to 
achieve  favourable  conservation  status.  This 
makes Austria one of the worst performers in the 
EU  regarding  species  conservation.  Wet  habitats, 
such  as  rivers  and  peatlands,  as  well  as  the 
associated  groups  of  species,  such  as  fish, 
amphibians  and  reptiles,  are  particularly  affected. 
More  than  25%  of  all  breeding  bird  species  in 
Austria also show negative population trends. The 
decline  can  be  especially  observed  with  the 
common farmland birds with a decrease by about 
40%  on  average  over  the  last  25  years  (365).  The 
trend  shows  an  overall  deterioration,  as  the 

(360) European Commission, Environmental Implementation 

Review (2025), Austria country report, Link. 

(361) Hirschbuehl  et  al.  (JRC),  The  EU  economy`s  dependency  on 
European 

VASILAKOPOULOS, 

editor(s), 

P. 

nature, 
Commission, (2025). Link 

(362) Hirschbuehl  et  al.  (JRC),  The  EU  economy`s  dependency  on 
European 

VASILAKOPOULOS, 

editor(s), 

P. 

nature, 
Commission, (2025). Link 

(363) Eurostat, Protected Areas Indicator, Link. 

(364) EEA, State of Nature in the EU: Results from reporting under 
the Nature Directives 2013-2018, Publications Office of the 
European Union, Luxembourg, 2020, Link. 

conservation  status  has  worsened  for  more 
species  and  habitats  than  it  has  improved  for 
between the last two reporting periods. This trend 
clearly 
indicates  that  the  existing  protection 
measures  are  not  sufficient  to  achieve  the 
conservation  objectives  set  by  the  EU.  In  this 
regard, the European Commission entered the next 
stage of its infringement procedure against Austria 
and  decided  to  send  a  reasoned  opinion(366)  to 
Austria for failing to comply with the Habitats and 
Birds Directives. 

Austria  is  aligning  national  policy,  planning 
and  on-the-ground  river  restoration  actions 
with existing EU water and nature legislation 
and preparing for the implementation of the 
EU  Nature  Restoration  Law,  which  includes 
the aim to make at least 25 000 km of rivers 
in  the  EU  free  flowing  by  2030.  The  EU-co-
funded  LIFE  IP  IRIS  Austria  (Integrated  River 
Solutions)  project  develops  integrated  river  basin 
management  plans  that  align  ecological  goals 
(river  renaturation)  with  flood  risk  management 
and  other  uses.  It  covers  nearly  600 km  of  river 
corridors  across  seven  Austrian  catchments,  with 
designs  to  restore  more  natural  flows  and  river 
dynamics (367). 

The  Dynamic  LIFE  Lines  Danube 
is  a 
transnational  renaturation  project  on  the 
Danube  and  its  floodplains  conducted  with 
Slovak  partners  and  WWF.  Its  aim  is  to  return 
more water and dynamism to the river’s wetlands 
and  floodplain  landscapes,  improving  ecological 
function and natural flow regimes (368). 

Free  flowing  rivers  also  generate  broader  socio-
economic  benefits, 
rural 
landscape quality and new recreation and tourism 
opportunities. 

including  enhanced 

Nature  degradation  is  further  amplified  by 
invasive  alien  species,  with  39  recorded  in 
Austria in 2024 (369), inflicting estimated damages 
of EUR 250 million up to 2020, primarily affecting 

(366) INFR(2022)2056. 

(367) LIFE IP IRIS Austria - viadonau. 

(368) Dynamic LIFE Lines Danube Projekt | WWF Österreich 

(369) European Commission, 2025, Environmental Implementation 

(365) EEA, Common bird index in Europe, Link. 

Review, Austria Country Report. Link. 

96 

 
 
 
integrity  –  has 

agriculture  and  public  health  (370).  At  the  same 
time, eutrophication – a threat to biodiversity and 
ecosystem 
shown  partial 
improvement, with the areas at risk declining from 
76% to 61% since 2005 (371). Nitrogen deposition 
combustion 
from  agriculture  and 
remains a critical driver of this problem. 

industrial 

as 

Austria 
is  continuing 
its  climate  and 
challenges 
efforts 
environmental 
intensify,  but  a  biodiversity  financing  gap 
persists.  Austria  faces  an  estimated  EUR 942 
million/year shortfall in funding (out of a EUR 1.34 
billion/year  investment  need)  designed  to  address 
conservation priorities. (372). 

Sustainable agriculture and land use 

Austria’s  carbon  removals  fall  short  of  the 
level  of  ambition  needed  to  meet  its  2030 
target  for  land  use,  land-use  change  and 
forestry  (LULUCF)  (373).  The  LULUCF  sector  has 
shifted  from  a  historical  carbon  sink  to  a  net 
source  of  emissions  in  recent  years.  This  trend  is 
primarily attributed to ageing forests with reduced 
sequestration rates and increased salvage logging 
due to bark beetle infestations and storm damage. 
To meet its 2030 LULUCF target, additional carbon 
removals  of  0.9 million  tonnes  of  CO2  equivalent 
(MtCO2-eq)  are  needed (374).  The  latest  available 
projections show a gap to target of approximately 
(375).  Consequently, 
0.45  MtCO2-eq  for  2030 
Austria requires additional measures to bridge this 
gap. Beyond increasing net removals, investments 
in  healthy  forests  and  soils  are  vital  for  resilient 

(370) Neobiota,  Economic  Cost  of  invasive  alien  species  across 
Europe  (2021).  Link.  European  Commission:  Directorate-
General  for  Environment,  EMRC,  Logika  Group  and  RPA 
Europe;  Update  of  the  costs  of  not  implementing  EU 
environmental law (2025). Link. 

value  chains  and  a  competitive  bioeconomy. 
enhancing  national  monitoring 
Furthermore, 
systems  through  improved  data  and  projections 
remains essential for effective climate action. 

Austria’s  functional  urban  area  (FUA)  has 
considerably expanded in the last years with 
a  yearly  net  land  taken  between  2018  and 
2021  that  accounted  for  459 ppm/year  of 
the total urban surface of the country, where 
most  land  has  been  taken  from  arable  land. 
This  ongoing  ‘land  take’  and  the  associated  soil 
ecosystems, 
sealing 
decreased  carbon  sequestration,  and  impaired 
(376).  With 
flood  protection 
its  national  soil 
strategy(377),  Austria  aims  to  substantially  reduce 
land use and soil sealing by 2030. 

resilient 

causes 

less 

of 

23% 

Austria’s 

Water quality pressures stay high, but better 
than  the  EU  average.  Under  the  EU  Nitrates 
groundwater 
Directive, 
monitoring  stations  recorded  average  nitrate 
concentrations  exceeding  25 mg/l  (and  7%  above 
50 mg/l, the EU threshold for safe drinking water) 
between  2016  and  2019  (378).  These  numbers 
underscore  systemic  agricultural  pressures,  with 
Austria’s  livestock  density  of  0.86  livestock  units 
per  hectare  in  2020(379),  slightly  above  the  EU 
average  of  0.75.  A  5%  reduction  in  agricultural 
ammonia  emissions  between  2018  and  2023 
shows Austria is projected to be on track to meet 
its  reduction  commitments  to  be  achieved  by 
2030(380).  However,  nitrate  pollution  persists, 
indicating gaps in nutrient management strategies. 

Pesticide  contamination  remains  a  critical 
issue, with 9% of rivers and 25% of groundwater 
exceeding  regulatory  thresholds  for  pesticide 
residues between  2018  and  2023  (381).  Pesticides 
not  only  threaten  aquatic  ecosystems  but  also 

(376)EEA, Land take and land degradation in functional urban areas, 

2022. Link. 

(371) EEA,  Eutrophication  caused  by  atmospheric  nitrogen 

deposition in Europe 2024. Link. 

(377) ÖROK, ‘Bodenstrategie für Österreich’, 2024, 
https://www.oerok.gv.at/bodenstrategie. 

(372) European  Commission,  Environmental 
Review (2025), Austria country report.  

Implementation 

(378)EEA, Nitrate in groundwater in Europe, 2025. Link. 

(379)Eurostat, Livestock density index. Link. 

(373) National LULUCF targets of the Member States in line with 

Regulation (EU) 2023/839 Link. 

(374) National  LULUCF  targets  of  the  Member  States  in  line  with 

Regulation (EU) 2023/839, Link. 

(375) Climate action progress report 2025. Link. Note: Austria did 
not submit projections with additional measures (WAM). 

(380) EEA, Magnitude of emission reductions (percentage) required 
by EU Member States to meet their emission reduction 
commitments for 2030 onwards, based on 2023 data, 2025. 
Link. 

(381)EEA,  Pesticides  in  rivers,  lakes,  and  groundwater  in  Europe, 

2024. Link. 

97 

 
 
 
pose  long-term  risks  to  human  health  through 
contaminated  drinking  water  and  food  chains. 
Pesticide  contamination  can  also  be  observed  in 
the  soil,  with  38%  of  agricultural  soils  showing 
pesticide residues above 0.5 mg/kg-1 (382). 

(382)Vieira  et  al.  (JRC),  Pesticides  residues  in  European  agricultural 
soils - Results from LUCAS 2018 soil module, Publications Office 
of the European Union, 2023. Link. 

98 

 
 
Table A10.1:Key Adaptation Indicators 

(1) EFFIS (European Forest Fire Information System). Link. 
(2) The climate protection gap refers to the share of non-insured economic losses caused by climate-related disasters, based on 
modelling of the risk from floods, wildfires, windstorms, and the insurance penetration rate. Scale: 0 (no protection gap) – 4 (very 
high gap). EIOPA, 2025, Dashboard on insurance protection gap for natural catastrophes. 
(3) Measures total water consumption as a percentage of the renewable freshwater resources available for a given territory and 
period. Values above 20 % are generally considered to be a sign of water scarcity, while values equal or greater than 40 % 
indicate situations of severe water scarcity. 
(4) European Commission, 2024, seventh Implementation Report from the Commission to the Council and the European 
Parliament on the implementation of the Water Framework Directive (2000/60/EC) and the Floods Directive (2007/60/EC) (Third 
River Basin Management Plans and Second Flood Risk Management Plans). 
(5) Indicator refers to concentrations of nitrate (NO3) in groundwater, measured as milligrams per litre (mg NO3/L). Nitrate can 
persist in groundwater for a long time and accumulate at a high level through inputs from anthropogenic sources (mainly 
agriculture). The EU drinking water standard is limited to 50 mg NO3/L to avoid threats to human health. 
(6) Net removals are expressed in negative figures, net emissions in positive figures. Reported data are from the 2025 
greenhouse gas inventory submission. 2030 value of net greenhouse gas removals as in Regulation (EU) 2023/839 – Annex IIa. 
Source: Eurostat, EEA, JRC 

99 

Climate adaptation and preparedness:EU-27201920202021202220232024latest dataDrought impact on ecosystems2.320.262.669.550.07-2.76[area impacted by drought as % of total]Forest fires burned area (1)38            168          72            1 016       398          -           354 510     [burned area in ha. per year]Economic losses from extreme events630          248          868          220          409          2 032       40 452       [EUR million at constant 2022 prices]Insurance protection gap (2)---2              2              2               -[composite score between 0 and 4]Sub-national climate adaptation action23            23            23            23            23            25            34               [% of population covered by the EU Covenant of Mayors for Climate & Energy]Water resilience:EU-27201920202021202220232024latest dataWater Exploitation Index Plus, WEI+ (3)0.63         1.79         2.00         2.28         1.71         -4.53            [total water consumption as % of renewable freshwater resources]Water productivity---91            --151[EUR per m3]Water abstractionWater abstraction by source (% from surface water)------Water abstraction by sectorAgricultureElectricity coolingManufactu-ringPublic water supplyMining and QuarryingConstru- ction 2.45%45.04%35.03%17.49%0.00%0.00%Status of water bodies (4)[% of water bodies in a good status]Surface water bodies (ecological)-----49%38%Groundwater bodies (quantitative)-----100%93%Nature restoration:EU-27201920202021202220232024latest dataEcosystem dependency---46%--44%[% of direct dependency]Protected area28.92929.329.329.326.4[% of terrestrial protected areas]Invasive alien species (IAS)-----3929.2[number of IAS of Union concern]Damage cost of IAS----0.251.69[EUR billion]Eutrophication 191191295[AAE of area at risk of euthrophication]Sustainable agriculture and land use:EU-272012-20182018-2021latest dataYearly net land taken by Member State412          459          670            [ppm of total urban surface per Member State]Land conversion in functional urban area [% of total land taken from 2018-2021]Arable land61%Complex and mixed cultivation0%Forests8%Herbaceous vegetation associations2%Open spaces with little or no vegetation0%Pastures29%Permanent crops1%Water0%Wetlands0%201920202021202220232024latest dataNitrates in groundwater (5)21.921.521.321.120.9[mgNO₃/l]Livestock density0.860.860.75(number of livestock units per hectare of utilised agricultural area)Ammonia emissions 94%94%94%94%94%-94%[% of total utilised agricultural area]Pesticide contamination on rivers and lakes water bodiesrivers9%27%[% of monitoring sites with pesticides exceeding thresholds, 2018-2023]lakesn.d.18%Pesticide contamination in soil 38%57%[% of samples with a concentration over 0.5 mg/Kg⁻¹]Net greenhouse gas removals from LULUCF (6)6001.9-949.9-3361.7-206.57530.0--198 421 [ktCO₂-eq] 
 
      
 
FAIRNESS 
ANNEX 11: LABOUR MARKET 

Austria’s  labour  market  performs  strongly 
but  faces  structural  pressures,  limiting  its 
ability  to  fully  meet  current  and  future 
labour  demand.  Austria’s  labour market  remains 
characterized  by  both  rising  unemployment  and 
persistent  labour  shortages,  regional  imbalances 
and  structural  issues  such  as  gender  gaps  in 
employment  outcomes  and  untapped  potential 
among  older  workers,  non-EU-born  people  and 
people  with  lower  levels  of  skills.  While  Austria 
performs  relatively  well  on  decarbonisation,  skills 
shortages  in  the  green  sectors  and  challenges  in 
the  automotive 
industry  persist,  alongside  a 
moderating  wage  outlook.  The  2025  country-
specific  recommendations  for  Austria  focused  on 
increasing  the  number  of  hours  worked  and 
boosting the employment rate among groups who 
are under-represented in the labour market (383). 

The  employment  rate  rose  modestly,  while 
there was also an increase in unemployment. 
Despite  the  economic  recession,  employment  has 
continued  to  expand  gradually,  driven  mainly  by 
the  increase  in  the  statutory  retirement  age  for 
women. While exceeding the EU average of 76.2%, 
at  77.6%,  the  employment  rate  in  2025  was  still 
2.3 pps below the 2030 national employment rate 
target  of  79.9%.  The  activity  rate 
(15-64) 
increased  to  78.9%,  after  a  period  of  steady 
increases  since  2009,  and  is  well  above  the  EU 
average  of  75.7%.  At  the  same  time,  the 
unemployment  rate  went  up,  from  5.2%  to  5.7%, 
and is approaching the EU average (6%), with the 
long-term unemployment rate also rising to 1.3%. 
The  youth  unemployment  rate  saw  a  pronounced 
increase by 1.2 pps from 10.3% in 2024 to 11.5% 
in  2025.  Both  rates  remain  well  below  the  EU 
averages of 15.2% and 1.9%. However, contrary to 
the  EU-wide  trend,  the  share  of  young  persons 
neither  in  employment  nor  in  education  and 
training increased by 1.1 pps and stood at 10.3% 
in  2025,  approaching  the  EU  average  of  10.9%. 
Employment  is  expected  to  rise  by  0.3 pps  and 

(383) CSR  2025.5.1.  Create  incentives  to  boost  the  numbers  of 

hours worked overall.  

CSR  2025.5.2.  and  the  full-time labour  market  participation 
of women, including by improving quality and availability of 
childcare services.  

CSR  2025.5.3.  Improve  labour  market  outcomes  for  older 
workers  and  for  disadvantaged  groups,  such  as  low-skilled 
job seekers and people with a migrant background.  

0.6 pps in 2026 and 2027, driven by the projected 
modest  economic  recovery (384).  However,  in  the 
short term, there is a risk of a continued negative 
labour market outlook (385). The average number of 
usual  weekly  hours  worked  remained  low  at  35.8 
hours in 2025 (see the 2025 country report). Only 
few measures were taken in 2025 to address the 
2025  country-specific  recommendation  (CSR)  to 
create  incentives  to  boost  the  numbers  of  hours 
worked overall, focusing on tax incentives to work 
overtime and on holidays (386).  

Graph A11.1: Key labour market indicators 

Source: Eurostat, Labour Force Survey [lfsi_emp_a, une_rt_a, 
lfsi_neet_a, une_ltu_a]. 

The labour market remains tight, with labour 
and skills shortages among the highest in the 
EU.  The  job  vacancy  rate  had  steadily  decreased 
since  the  COVID-19  pandemic,  and  it  peaked  at 
5.3%  in  Q2-2022,  almost  returning  to  its  pre-
pandemic  level  of  3.4%  in  Q2-2025,  compared 
with  3.3%  in  Q4-2019.  Nevertheless,  it  remained 
well  above  the  EU  average  (2.1%).  Vacancy  rates 
are  particularly  high  in  the  administrative  and 
support  service  activities  (5.7%),  accommodation 
and  food  services  (5.4%),  as  well  as  construction 
and professional, scientific and technical activities 

(384) European Commission, 2025, Autumn Forecast for Austria.  

(385) Wifo, 2026, Economic Outlook for 2026 and 2027.  

(386) Parlament Österreich, Parlamentskorrespondenz Nr. 34, 

2026. 

100 

7273747576777879800246810121420152016201720182019202020212022202320242025%%ATActivity rate 15-64 (rhs)Employment rate (20-64)Unemployment rate 15-74 (lhs)Long-term unemployment rate 15-74 (lhs)Youth unemployment rate 15-24 (lhs)NEET rate 15-29 (lhs) 
 
 
 
  
 
 
 
(4.9%). Persistent skills shortages are also evident 
labourers,  shop  sales 
among  manufacturing 
assistants, domestic, hotel and office cleaners and 
helpers,  as  well  as  physical  and  engineering 
science technicians (387). At the same time, Austria 
reported  one  of  the  highest  numbers  of  surplus 
occupations in 2024. 

Graph A11.2: Labour and skills shortages and the 
vacancy rate 

(1) Job vacancy rate, seasonally adjusted.  
Source: Eurostat [ei_lmjv_q_r2] and European Commission 
Business and Consumer Survey (EU-BCS). 

Persistent  gender  gaps  in  working  time, 
retirement and care responsibilities continue 
to  constrain  female  employment.  Women’s 
activity (15-64)  and employment (20-64)  rates in 
2025  stood  at  75.1%  and  74.2%  respectively. 
While  they  were  high  in  absolute  terms  and  in 
comparison  with  other  EU  countries,  the  related 
gender gaps were 7.6 and 6.8 pps. The 2025 CSRs 
for  Austria  highlighted  the  need  to  support  the 
full-time  participation  of  women  in  the  labour 
market, 
framework 
conditions  and,  in  particular,  the  quality  and 
availability  of  childcare  services (388).  The  2024 
reform  gradually  raising  the  statutory  retirement 
age  for  women  to  65  years  by  2033  has 
contributed  to  increasing  the  employment  of 
women  aged  55-64  (from  51.6%  in  2024  to 
55.3%  in  2025)  and  the  average  labour  market 

including  by 

improving 

(387) EURES - Demand for occupations | CEDEFOP (from 1 July 

2024 to 30 June 2025). EURES Report on labour shortages 
and surpluses 2024. 

(388) CSR. 2025.5.2: and the full-time labour market participation 
of women, including by improving framework conditions and 
notably the quality and availability of childcare services.  

exit  age  reached  61.2  years  in  2024.  However, 
Austria has one of the widest gender gaps in part-
time  employment in  the  EU,  at  37.1  pps in  2025, 
with  almost  half  of  all  women  (49.6%)  working 
part-time. In 2025, 42.1% of women working part-
time cite care responsibilities for children or adults 
with  disabilities  as  the  primary  reason  for 
choosing  this  type  of  work,  and  a  further  26.5% 
cite  other  personal  reasons,  a  part  of  which  can 
also be driven by perceptions of gender roles and 
care responsibilities.  

Austria  also  records  one  of  the  highest 
gender  pay  gaps  among  all  Member  States, 
at 17.6% in 2024, which, together with lower 
employment outcomes, contributes to one of 
the  highest  gender  pension  gaps  in  the  EU. 
The  implementation  of  the  Pay  Transparency 
Directive is expected to help close the gender pay 
gap.  The  increasing  statutory  pension  age  for 
women  is  expected  to  have  only  a  partial  impact 
on the gender pension gap in the medium term, as 
it  does  not  tackle  underlying  drivers  such  as  past 
earnings gaps and shorter contributory periods. As 
a result of ongoing policy efforts, in 2025, 30.9% 
of children under three years of age were enrolled 
in  early  childhood  education  and  care  (ECEC),  an 
increase  of  6.8  pps  from  2023,  contributing  to 
women’s  potential  full-time  participation.  Further 
measures to support the availability and quality of 
ECEC,  longer  opening  hours,  subsidies  to  fees  for 
low-income  parents,  access  to  all-day  schools,  as 
well as affordable and high-quality long-term care 
provision could all increase women’s working time 
(see  also  Annexes  12  and  13).  These  measures 
could  be  complemented  by  promoting  flexible 
working  time,  telework,  upskilling  to  support  re-
entry 
information 
campaigns  on  the  implications  of  prolonged  part-
time  employment  and  better  public  transport 
provision. 

into  full-time  work,  wider 

The  effective  retirement  age,  which  is  lower 
is 
than  the  statutory  retirement  age, 
comparatively  low.  Although  the  employment 
rate  of  older  workers  (55-64)  had  increased 
continuously over the last decade to reach 60.9% 
in 2025, it remains well below the EU average of 
66.4%.  Lower  digital  skills  (63%  of  55-64-year-
olds  reported  having  at  least  basic  digital  skills, 
compared  with  76.4%  among  25-54-year-olds) 
and  difficulties  in  re-entering  the  labour  market 
following unemployment continue to affect labour 
market outcomes in this group. The 2025 CSRs for 
Austria  highlighted  the  need  to  improve  labour 

101 

01234560510152025303540452019-Q12019-Q32020-Q12020-Q32021-Q12021-Q32022-Q12022-Q32023-Q12023-Q32024-Q12024-Q32025-Q12025-Q3Job vacancy rate (%)Labour shortages (%)ATIndustry (lhs)Construction (lhs)Services (lhs)Job vacancy rate (rhs) 
     
 
market  outcomes  for  older  workers (389).  As  of 
2026,  the  ‘Aktion  55+’  initiative  will  complement 
the existing Initiative 50+, aiming to create 3 000-
6 000  jobs  for  the  long-term  unemployed  people 
above the age of 55 in social enterprises and non-
profit  employment  projects,  with  a  yearly  budget 
of  EUR  50  million.  Moreover,  as  of  2026,  the 
minimum  eligibility  age  for  one  early  retirement 
scheme  (the  ‘corridor  pension’)  will  be  increased, 
which  will  help  drive  up  the  effective  retirement 
age.  Older  individuals  are  to  be  incentivised  to 
remain  economically  active  in  a  reduced  capacity 
beyond the earliest possible retirement age, rather 
than  withdrawing  completely  from  working  life. 
Recent initiatives (390) had a limited impact on the 
prevention  of  job  loss  among  older  workers  and 
drivers  of  early  labour  market  exit (391)  and  could 
be 
complemented  by  additional  measures 
targeting  workplace  health,  return  to  work  after 
sick leave (including subsidised part-time work for 
people  with  chronic  health  conditions)  and 
participation  in  training  and  career  guidance  of 
older  workers.  The  statutory  retirement  age  was 
not  adapted  to  the  growing  life  expectancy. 
Overall, estimates suggest that closing the gender 
and  age  gaps  in  employment  could  offset  the 
impact of 20 years of demographic change (392).  

People born outside the EU and workers with 
low  qualifications  are  major  sources  of 
labour  market  potential.  The  2025  CSRs  for 
Austria  highlighted  the  need  to  improve  labour 
market  outcomes  for  people  with  a  migrant 
background  and  for  low-skilled  jobseekers (393). 
People born outside the EU constitute 14% of the 
active  labour  force,  yet  they  face  significant 
structural  barriers  to  entering  the  labour  market. 
At 67.2% in 2025, their employment rate was 12.7 
pps  below  the  rate  for  those  born  in  Austria.  This 
gap  reflects  a  combination  of  factors,  including 
language  barriers,  difficulty 
their 
professional  qualifications  recognised  in  Austria, 

in  having 

(389) CSR  2025.5.3.  Improve  labour  market  outcomes  for  older 
workers  and  for  disadvantaged  groups,  such  as  low-skilled 
job seekers and people with a migrant background. 

(390) Including new components of  fit2work and the initiatives of 
re-integration part-time and Demographic Consulting Digi+. 

(391) See also OECD, 2025, Promoting Better Career Mobility for 

Longer Working Lives in Austria (EN). 

(392) IMF, 2024, Austria – Selected issues. 

(393) CSR  2025.5.3.  Improve  labour  market  outcomes  for  older 
workers  and  for  disadvantaged  groups,  such  as  low-skilled 
job seekers and people with a migrant background. 

the  workplace,  and 

health, family circumstances and residence status. 
The overqualification rate among non-EU nationals 
was  45.4%  in  2025,  compared  with  23%  among 
Austrian nationals and 32.2% among people from 
other EU  Member States. At the same time, there 
are  still  challenges  related  to  the  validation  and 
recognition  of  professional  experience  and  skills 
acquired  abroad  and  on  the  job,  as  well  as 
difficulties  in  accessing  flexible  upskilling  and 
reskilling  opportunities.  Further  measures  such  as 
additional  language  classes,  including  language 
improved 
training  at 
the 
information  and  advisory  services  on 
interrelations between social benefits, housing and 
employment  could  be  developed.  Meanwhile,  low-
qualified  people  are  the  largest  group  among  the 
unemployed.  Their  employment  rate,  at  57.9%  in 
2025, was 19.7 pps below the overall employment 
rate, 
is 
disproportionately  higher  than  that  of  high-
qualified  people  (12.8%  vs  5.2%  for  those  with 
medium-level  qualifications  and  3.9%  for  those 
with  high-level  qualifications).  Furthermore,  there 
is  scope  for  increasing  the  employment  rate  of 
persons  with  disabilities.  Although  the  figure  is 
above  the  EU  average,  the  gap  in  employment 
between  persons  with  and  without  disabilities  is 
18.8 pps (2025), while 27% of young persons with 
disabilities  were  neither  in  employment  nor  in 
education  and  training  (NEETs)  in  2024.  Work 
integration  social  enterprises  support  the  labour 
market 
reduced 
integration  of  people  with 
employability.  

unemployment 

their 

rate 

and 

Differences between regions are substantial, 
underscoring  the  need  to  support  regional 
labour  mobility.  While  regional  disparities  in 
employment  are  relatively  low,  the  differences  in 
rates  are  more  pronounced 
unemployment 
in 
(ranging  from  3.5%  in  the  Tyrol  to  5% 
Burgenland  and  9.9%  in  Vienna  in  2025).  These 
differences can also be seen in the vacancy rates 
(0.2% in Vienna vs 2.6% in Salzburg in 2023 (394)), 
which  indicates  strong  geographical  disparities  in 
unmet labour demand and supply, suggesting that 
unused  labour  potential  in  regions  with  higher 
unemployment rates  – particularly Vienna  –  could 
help  alleviate  shortages  in  tighter  regional  labour 
markets.  Barriers  to  regional  mobility  include 
differences  in  housing  costs,  childcare  and  social 
assistance or minimum income benefits, which are 

(394) OECD, 2025. Addressing Regional Labour Market Imbalances 

in Austria.  

102 

 
 
 
integration  of 

labour  market 

more  generous  in  Vienna,  as  well  as  obstacles  to 
refugees, 
the 
including  delayed  access  to  integration  courses, 
limited  consideration  of  regional  labour  market 
demand in  the  initial  dispersal  process  as  well  as 
institutional differences across regions. In addition, 
only  10%  of  registered  unemployed  people  are 
eligible for cross-regional placement, as employer-
provided accommodation and absence of health or 
care  constraints  are  among  the  eligibility  criteria. 
Removing  the  requirement  of  employer-provided 
accommodation  could  expand  eligibility.  Stronger 
information  and 
financial 
targeted  training  could  improve  the  geographic 
mobility of jobseekers.  

incentives,  better 

The  decline  of  the  automotive  industry  and 
labour  shortages 
in  green  sectors  pose 
challenges. The share of employment in energy- 
intensive industries is  in line  with the  EU  average 
(2.7%  vs  EU:  3.5%  in  2025) (395),  and  training 
participation  in  these  industries  is  above  the  EU 
(17%  vs  12%) (396).  The  share  of 
average 
employment  in  environmental  goods  and  services 
(4.7%  vs  EU: 
in  2023  was  relatively  high 
2.7%) (397). Labour shortages in sectors relevant to 
the  green  transition  are  particularly  severe,  while 
the potential for jobs being created in the area of 
solar,  wind  and  small  hydro-power  generation  is 
among  the  highest  in  the  EU  (0.9  jobs  per  one 
thousand people in the labour force by 2030) (398). 
Green  jobs  are  traditionally  dominated  by  men 
(only  39%  of  those  jobs  were  done  by  women  in 
2022).  Facilitating  transition  pathways  towards 
green  employment,  with  a  particular  focus  on 
women, could reduce shortages and ensure a fair 
transition.  

Wage growth is expected to moderate in the 
short term. Wage growth reached 7.2% in 2024 
and slowed down to 3.8% in 2025 and is projected 
to  drop  to  2.4%  in  2026,  after  reaching  4.8%  in 
2022 and 6.8% in 2023. Real wages grew by 4.2% 
in  2024,  after  a  sizeable  decrease  in  2022  (4%) 
and  in  2023  (0.5%).  Real  wage  growth  slowed  to 
0.2% in 2025, and is projected to decline by 0.5% 

(395) Eurostat, data code nama_10_a64_e. 

(396) Eurostat, custom extraction from LFS. 

(397) Eurostat, data codes env_ac_egss1 and nama_10_a10_e. 

(398) European  Commission,  2025,  Estimating  labour  market 
investment  needs  of  the  green 

transitions  and  skills 
transition – A new approach.  

in  2026.  This  is  due  to  the  lower  nominal  wage 
growth  and  an  increase  in  inflation  in  2025. 
Collective bargaining agreements for 2026 provide 
for  wage  increases  below  inflation  in  export-
oriented  industries  and  the  public  sector.  Unit 
to  have  grown 
labour  costs  are  expected 
moderately by 3.2% in 2025, following a sizeable 
wage-driven growth of 8% in 2024. 

Social dialogue is well developed, with near-
universal  collective  bargaining  coverage and 
compulsory  employer  membership.  Social 
partners play a crucial role in shaping policies. The 
collective bargaining coverage rate, which stood at 
98%  in  2024,  is  one  of  the  highest  in  the  EU, 
reflecting  compulsory  membership  in  the  national 
employers’  association,  a  holistic  and  coordinated 
wage  bargaining  process,  erga  omnes  (‘towards 
everybody’)  and  extension  clauses,  as  well  as  the 
validity  of  collective  agreements  after  expiry. 
Collective  bargaining  is  predominantly  conducted 
at  sector  level.  Trade  union  density  is  20.2%, 
ranking  among  higher  levels  in  the  EU  (placing 
Austria  in  the  ninth  place  among  all  Member 
States).  Employer  organisation  density  is  100%, 
due 
for  all 
the  compulsory  affiliation 
companies (399).  Since  1  January  2026,  social 
partners  have  also  been  able 
to  conclude 
agreements  for  freelance  employees  who  are 
similar to employees. 

to 

(399) OECD/AIAS, ICTWSS v2.0. 

103 

 
 
 
 
ANNEX 12: SOCIAL POLICIES 

risks, 

among 

system 

reflecting 

social  protection 

Austria's 
is 
increasingly  coming  under  pressure.  In  the 
context  of  high  inflation  and  several  years  of 
recession,  the  system  has  helped  stabilise  most 
social  outcomes  in  previous  years.  Relatively  high 
public  spending  on  social  protection  has  helped 
contain  poverty 
the 
levels,  also 
successful implementation of measures to contain 
inflation  and  provide  support  for  housing  and 
energy costs. In 2025, however, poverty and social 
inclusion 
children, 
notably 
significantly  increased,  as  incomes  at  the  bottom 
grew  more  slowly  than  in  the  middle  and  top  of 
the  distribution.  Moreover,  disparities 
remain 
between  regions  and  among  individual  groups, 
notably  women,  children,  pensioners  and  people 
with  a  migrant  background.  Addressing  these 
challenges,  even  in  the  context  of  significant 
budgetary  consolidation,  would  help  strengthen 
Austria’s  competitiveness  and  inclusive  growth.  In 
recommendations 
2025, 
(CSRs)  for  Austria  called  for  improving  the  cost-
effectiveness  of  healthcare  (see  annex  15)  and 
long-term  care  and  significantly  increasing  the 
effective retirement age. 

the  country-specific 

As  poverty  and  social  exclusion  risks  rose 
markedly in 2025, further efforts are needed 
to  achieve  the  2030  national  poverty 
reduction  target.  The  share  of  people  at  risk  of 
poverty  or  social  exclusion  (AROPE)  increased 
markedly to 18.8% in 2025. Significant efforts are 
required  to  achieve  the  2030  national  target  of 
204 000 fewer people  at risk of poverty  or social 
exclusion  than  in  2019.  In  2025,  Austria  had 
265 000  more  people  AROPE  than  in  2019,  as 
notably  the  share  of  people  at  risk  of  poverty 
(AROP) and the proportion of people in households 
with  low  work-intensity  has  increased  in  2025. 
While  equivalized  net  household  incomes  (based 
on 2024 annual income) increased by an average 
of  8.7%  in  2025,  income  growth  for  the  bottom 
10%  at  4.7%  lagged  significantly  behind  that  of 
(8%) 
middle-income 
groups.  There  are  stark  regional  differences  in 
AROPE  levels  between  urban  and  rural  areas 
(Vienna 29.4% vs Burgenland 11.7%) and between 
regions  with  similar  characteristics  (e.g.  Salzburg 
14.6%  vs  Vorarlberg  21.6%).  These  regional 
disparities 
levels  are  shaped  by 
differences  in  job  opportunities,  the  proportion  of 
rented  housing  versus  owner-occupied  housing, 
and demographic composition, and by the varying 
levels  of  social  assistance  set  by  federal  states. 
Unemployed  people  are  particularly  exposed  to 

(8.7%)  and  high-income 

in  AROPE 

poverty risks. Following improvements in 2024, the 
AROPE  share  of  unemployed  people  increased  by 
12.2  pps  to  71.4%  in  2025,  compared  with  9.8% 
of the employed population (EU: 66.3% and 10.9% 
respectively).  Individuals  with  low  qualifications 
are  more  often  AROPE  than  those  with  high 
educational  attainment  (34%  vs  13.8%)  (EU: 
34.2%  vs  10.3%).  Simultaneously,  the  impact  of 
social  transfers  (other  than  pensions)  in  reducing 
poverty has sharply fallen, as benefits do not keep 
track with the increases in pensions and wages in 
a  context  of  rising  prices.  Decreasing  by  7.9  pps 
compared  to  2024,  social  transfers  reduced  the 
AROP  share  in  Austria  by  32.8%  with  the  impact 
now  being  below  the  EU  average  (33.2%).  Social 
and unemployment assistance benefits as well as 
the minimum pension income being set below the 
AROP  threshold  together  with  the  suspension  of 
the  social  benefit  indexation,  including  family-
related  benefits,  in  the  context  of  Austria’s  fiscal 
consolidation  efforts  might  further  exacerbate 
poverty  and  social  exclusion  risks  in  the  coming 
years.  To  address  the  multiple  dimensions  of 
poverty,  the  implementation  of  a  comprehensive 
approach,  as  set  out  in  the  EU  Anti-Poverty 
Strategy,  can  support  progress  towards  achieving 
the  national  anti-poverty  target.  It  would  be 
beneficial  if  Austria  took  account  of  regional 
differences  and  the  specific  characteristics  of 
target groups in the upcoming reform of the social 
assistance system.  

Graph A12.1: AROPE rates across subgroups 

Source: Source: Eurostat, EU-SILC [ilc_peps01n, ilc_peps06n].  

104 

0510152025303540452019202020212022202320242025% of populationATOlder people (65+)Non-EU born (18+)Children (<18y)Total 
 
      
 
 
Children  are  disproportionally  affected  by 
the  rise  in  AROPE.  The  Austrian  national  action 
plan  to  implement  the  European  Child  Guarantee 
aims to halve the AROPE rates for children to 11% 
by 2030. In 2025, the AROPE rate for children rose 
by 4.4 pps to 25.3% (EU: 24.2%), the highest level 
in  over  a  decade,  well  above  the  AROPE  rate  of 
adults (17.7%). At the same time, severe material 
and  social  deprivation  (SMSD)  is  less  pronounced 
among  children  (2.9%)  than  the  total  population 
(3.3%).  Some  groups  warrant  particular  policy 
attention.  While  18.9%  of  children  with  highly 
educated  parents  are  at  risk  of  poverty  or  social 
exclusion  (EU:  10.8%),  the  share  rises  to  72.5% 
among  children  of  parents  with  a  low  level  of 
education  (EU  61.5%).  As  educational  levels  tend 
to be passed down across generations (see Annex 
13),  repeating  the  cycle  of  poverty,  targeted 
support 
recently  adopted 
‘Chancenbonus’ programme aims to address these 
challenges.  Overall,  Austria’s  compliance  with  the 
European  Child  Guarantee  recommendations  is 
uneven: it is largely compliant on effective access 
to  suitable  housing  but  lags  behind  on  early 
childhood  education  and  care  for  children  under 
the  age  of  three  and  the  deinstitutionalisation  of 
alternative care. 

crucial. 

The 

is 

AROPE  risks  are  higher  among  women  at  all 
life  stages.  In  2025,  women  experienced  higher 
AROPE  rates  than  men 
(19.9%  vs  17.7%). 
Disparities increase with retirement, due to higher 
levels  of  part-time  employment,  fewer  years  in 
employment  overall  and  lower  lifetime  earnings 
among women. In 2025, the percentage of female 
pensioners  at  risk  of  poverty  or  social  exclusion 
was  4.8 pps  higher  than  that  of  male  pensioners, 
an  imbalance  that  will  be  only  partially  mitigated 
by the gradual increase in the statutory retirement 
age for women until 2033. Among single parents – 
over  80%  of  whom  are  women  -  AROPE  rates 
remain  high,  at  45.9%,  increasing  by  3.4  pps 
compared  to  2024.  The  Single  Parent  Support 
Fund Act announced by the current coalition could 
help  reduce poverty  levels  among  single  mothers. 
In 2024, men were almost 5 pps more likely than 
women  to  receive  social  benefits  (43.5%  vs 
38.5%),  mainly  because  some  benefits  are 
income-related  or  are  granted  in  the  form  of  tax 
deductions (400).  To  reduce  AROPE  levels  among 
women, it would therefore be beneficial if Austria 

(400) Gasior (2025): Versteckte Armut? Das Armustrisiko von nicht-

to  social  benefits, 

increased  women's  working  hours,  as  this  would 
including 
improve  access 
pensions 
(see  Annex  11).  Flexible  working 
arrangements  and  adequate  childcare  are  crucial 
to achieving this objective. In recent years, Austria 
increase 
has 
participation in early childhood education and care 
for  children  under  three,  raising  it  from  21.1%  in 
2020  to  30.9%  in  2025  and  moving  closer  the 
Barcelona target of 33% but remaining well below 
the EU average of 40.5% (401). 

introduced  policy  measures  to 

the 

in  accessing 

People  born  outside  Austria  are  more  likely 
to  face  poverty  and  social  exclusion  risks, 
including  in-work  poverty.  While  the  AROPE 
rate  was  11.5%  among  people  born  in  Austria  in 
2025,  it  reached  29.0%  among  people  born  in 
other  Member  States  and  42.5%  among  those 
born outside the EU. This is 31 pps higher than for 
the  native-born  population (402).  While  AROPE 
increased in  all  groups,  it particularly  rose  among 
people  born  outside  the  EU  and  those  from  other 
EU  countries.  The  levels  of  low  work  intensity 
(15.9%  vs  AT:  4.7%)  and  in-work  poverty  (22.4% 
vs  AT:  6%)  are  also  higher  among  people  born 
intensity  reflects 
outside  the  EU.  Low  work 
difficulties 
labour  market, 
particularly  for  newcomers.  Improved  integration 
measures starting from the moment of arrival, as 
announced  in  the  reform  of  the  social  assistance 
system,  could  help  address  this  issue.  As  social 
assistance is to be made conditional on integration 
efforts,  it  will  be  crucial  that  these  measures  are 
accompanied  by  sufficient  German 
language 
courses  and  training  opportunities  that  are  easily 
accessible  and  offer  flexible  arrangements  in 
combination  with  childcare.  Projects  such  as 
‘College  25+’  serve  as  good  examples  in  this 
regard,  combining  language  skills  with  practical 
In-work 
skills  and 
poverty  is  higher  among  non-EU  nationals,  who 
tend  to  work  in  unqualified,  lower-paid  jobs  and 
are  often  overqualified (404).  This  group  could 
benefit  from  reskilling  programmes,  better  job-
housing 
placement  measures 

individual  counselling (403). 

linked 

to 

(401) See Erweiterung des Arbeitskräftepotenzials, 2025. 

(402) The  shift  in  eligibility  for  people  with  subsidiary  protection 
from  higher  minimum  income  (Mindestsicherung)  to  core 
social  assistance  (Grundversorgung)  from  2026  in  Vienna 
and  Tirol  risks  worsening  AROPE  levels  for  this  group  and 
may weaken their incentives for labour market integration.  

(403) See College 25+ | Die Wiener Volkshochschulen. 

alleinlebenden Frauen in Oesterreich, Caritas.  

(404) OECD (2025), State of Immigrant Integration: Austria.  

105 

 
 
 
support (405)  and  support  for  the  recognition  of 
qualifications (see Annex 11).  

and 

social 

deprivation 

Material 
has 
increased.  In  2025,  261 000  people,  or  2.9%  of 
the  Austrian  population,  were  affected  by  SMSD. 
This  represents  a  decline  compared  to  the  peak 
levels of 2023 and 2024 (3.7%) and is below the 
EU  average  (6.3%),  but  it  is  still  a  relatively  high 
level  for  Austria  for  the  past  decade.  The  high 
levels of 2023-24 were driven by repercussions of 
the pandemic and inflation, especially in terms of 
higher energy, rent and food prices, which affected 
low-income  households  disproportionately.  More 
than half of the rise in spending among people in 
the  lowest  income  quintile  relates to  basic  needs, 
putting already limited resources under significant 
pressure.  Low  incomes  have  failed  to  keep  pace 
with  rising  living  costs  (406),  as  reflected  in  the 
increase  in  food  bank  use.  In  2024,  Tafel  Austria 
rise  of  114% 
supported  75 000  people,  a 
compared with 2023 (407). 

lowest  quintiles 

Inequalities  in  wealth  and  income  are  rising 
in Austrian society. The income gap between the 
highest  and 
(S80/S20)  has 
increased  since  2021  (4.00),  reaching  4.35  in 
2025,  only  slightly  below  the  EU  average.  While 
the  absolute  difference  is  relatively  small,  the 
increase  shows  a  worrying  trend,  contrasting  with 
the overall improvement at EU level (4.98 in 2021 
vs 4.62 in 2025). Inequality is also pronounced in 
the  distribution  of  wealth,  as  the  top  10%  of 
society owned 63.928 of net household wealth in 
Q3-2025,  which  is  the  highest  level  in  the  euro 
area and  which  is  also  linked  to  features  of  the 
taxation system (see Annex 3). Without a wealth or 
gift/inheritance  tax  to  facilitate  a  more  equal 
wealth distribution, these trends may continue.  

The situation of persons with disabilities  has 
improved slightly, though leaving room for further 
improvement.  After  a  marked  increase  in  2023 
and 2024, SMSD declined to 5.4% in 2025. At the 
same time, 17.7% of people with disabilities were 
at risk of poverty or social exclusion (EU: 20.6%), a 
5.8 pps  difference  compared  with  people  without 
disabilities.  Although  a  pilot  programme  for 
improved personal assistance at work exists, there 

to 

contributes 

Employment 

labour  market  with 

is scope  for further measures to help people with 
find  work.  Sheltered  workplaces 
disabilities 
currently  offer  low  pay  and  no  access  to  social 
security  benefits.  Promoting  equal  pay  and 
employment in the open labour market could help 
reduce  poverty  levels.  The  recent  initiative  on 
Inclusive 
this, 
supporting the access of people with high support 
needs  to  the 
insurance 
coverage  and  fair  wages. (408)  Although  a  quota 
system  for  employing  people  with  disabilities  in 
companies  is  in  place,  only  23.9%  of  firms 
comply (409).  The  ability-to-work  examination 
exempts people with a disability level above 50%, 
focusing  on 
than  support 
needs (410). Exemptions are granted to people with 
disabilities  under  25,  accompanied  by  youth 
coaching.  Targeted,  conditional  and  activation-
oriented exemptions could be considered for those 
over 25. 

limitations 

rather 

by 

states 

(mainly 

significant 

federal 
the 

the 
(mainly 

Coverage  and  costs  of  long-term  care  are 
characterised 
regional 
disparities. Austria’s long-term care (LTC) system 
is  characterised  by  split  powers  between  the 
federal  level  and  federal  states  with  regard  to 
level)  and 
financing 
implementation 
and 
communes).  The  LTC  provisions  laid  down  in  the 
Care  Fund  Act  are  only  set  out  in  general  terms, 
leaving  federal  states  with  broad  discretion  for 
implementation.  This  results  in  a  heterogenous 
system of LTC provision and related  costs. Across 
the  three  broad  LTC  categories  (residential  care, 
home care and semi-inpatient care), coverage (411) 
in  2024  varied  from  5.3%  in  Lower  Austria  to 
10.3%  in  Vorarlberg  (compared  with  7%  for  the 
entire  country).  Similarly,  the  average  number  of 
hours  of monthly mobile care  per  recipient varied 
in 
from  7.5  hours 
Vienna (412).  Private 
vary 
substantially.  In  2020,  the  national  court  of 
auditors (413)  showed  that  the  share  of  co-

in  Tyrol  to  22.5  hours 

can  also 

costs 

(408) The initiative is funded with 36 mn EUR by the government. 

(409) European Semester 2025-2026 country fiche on disability 

equality - Publications Office of the EU.  

(410) UN Convention of the Rights of Persons with Disabilities.  

(411) Ratio of people over 60 compared with the number of 

(405) See AMS Forschungsnetzwerk - Housing Support Policies and 

recipients of LTC benefits. 

Refugees’ Labor Market Integration in Austria. 

(412) Fink, M. (ESPAN), Long-term care settings for older people in 

(406) Heitzmann et al., Kennzahlen zu Lebensbedingungen, 2025. 

Austria, 2025.  

(407) See 2024 Jahresbericht, Die Tafel Österreich.  

(413) 2020, Bericht des Rechnungshofes: Pflege in Österreich. 

106 

 
 
 
terms  of  transport  poverty,  6.1%  of  the  Austrian 
population could not afford a car in 2024, slightly 
above the EU average. The regions of Burgenland 
and  Oberösterreich,  where  approximately  12%  of 
the  population 
is  at  risk  of  poverty,  have 
particularly poor public transport services (417) (see 
also  Annex  19).  Transport  fuel  expenditure  is 
projected  to  increase  in  line  with  the  EU  average, 
driven by ETS2. Risks are likely to be concentrated 
limited 
among  vulnerable  households  with 
alternatives. 
the  affordability  and 
Improving 
availability  of  public  transport  will  therefore  be 
essential.  In  areas  with  limited  access,  support 
could focus on zero-emission vehicle options, such 
as social leasing schemes.  

payments  ranged  from  31.5%  in  Salzburg  to 
80.7%  in  Styria.  Differences  in  coverage  and 
affordability  have  implications  for  the  health  and 
AROPE levels of care recipients. Among home care 
recipients, 74% (Vienna)  and 71% (Upper Austria) 
of  those  with  moderate  needs  lived  below  the 
national  poverty  threshold  in  2024(EU  average: 
68%);  compared  with  77%  and  36%  respectively 
among  those  with  severe  needs  (EU  average: 
74%) (414).  Although  both  values  have  decreased, 
they  are  still  above  EU  level.  Differences  in 
provision and costs incentivise the use of informal 
care, which can be of suboptimal quality, and risk 
overburdening  acute  care  systems  such  as 
hospitals.  LTC  reforms  in  2022-2024  prioritised 
staff 
financial 
benefits (415), with limited progress in harmonising 
coverage  and  affordability.  Social  economy  care 
providers are a significant part of the care system 
and  help  tailor  care  delivery  to  people’s  needs, 
including  in  rural  areas.  A  national  needs-based 
approach  linked  to  unified  quality  assurance,  as 
suggested by the current government programme, 
could  support  the  provision  of  better  services. 
Shifting away from one-on-one care and stepping 
up  the  provision  of  community-based  care  and 
community  nursing  could  help  improve  the  cost-
effectiveness of LTC. 

shortages 

improved 

and 

Overall, energy and transport poverty remain 
low,  but  challenges  are  emerging.  In  2025, 
4.0%  of  the  population  were  unable  to  keep  their 
homes  adequately  warm,  which  is  4.8  pps  below 
the  EU  average.  This  percentage  has  increased 
steadily since 2020 but stabilised in 2025. The EU 
emissions  trading  system  for  buildings  and  road 
transport  (ETS2)  will  exert  additional  pressure. 
Heating  expenditure  is  projected  to  rise  by  less 
than  the  EU  average,  reflecting  households' 
relatively  limited  exposure  to  fuels  covered  by 
ETS2. From 2026, the Social Climate Fund will help 
mitigate  these  impacts  through  targeted  energy 
efficiency  investments,  complemented  by  existing 
measures  to  combat  energy  poverty,  such  as 
energy cost subsidies and housing benefits (416). In 

(414) OECD (2026): Adequacy of social protection for long-term 

care Austria (Vienna). oecd.org,  

(415) Notably,  the 

longer 
increased  family  allowance 
deducted  from  the  long  term  care  allowance.  A  hardship 
supplement  and  a  bonus  for  caregiving  relatives  have  been 
introduced.  Financial  support  for  24-hour  care  and  support 
for substitute care have been stepped up.  

is  no 

(416) Based on Austria’s final updated national energy and climate 

plan, https://link.europa.eu/nmRRHM. 

(417) Data from the Commission’s Transport Poverty Hub. 

107 

 
 
 
ANNEX 13: EDUCATION AND SKILLS 

in 

science, 

issues  that  begin 

strengthening  Austria’s 

Addressing skills shortages, improving equity 
in  childhood  education,  and  reducing  gender 
disparities 
technology, 
engineering and mathematics (STEM) are key 
educational 
to 
landscape.  The  partial  decline  in  basic  skills  and 
equity 
in  early  childhood 
education  and  care  (ECEC)  also  pose  challenges 
for  education  outcomes,  vocational  education  and 
training 
(VET),  school-to-work  transitions  and 
lifelong  learning.  Continued  investment  in  ECEC, 
with a focus on quality, and efforts to tackle staff 
shortages  at  all  educational  levels  and  ensure 
adequate  resources,  could  contribute  to  tackling 
these 
remain 
widespread.  To  counteract  them,  comprehensive 
policy  efforts  should  promote  upskilling  and 
reskilling 
labour  market  needs, 
accompanied  by  targeted  outreach  measures 
aimed  at  under-represented  groups,  in  particular 
low  qualified  people,  and  by  measures  to  reduce 
gender disparities in STEM education. In 2025, the 
country-specific  recommendations  addressed  to 
Austria called for raising the levels of basic skills, 
starting  from  an  early  age,  and  stepping  up  the 
provision 
and 
acquisition 
competences needed for the green transition. 

challenges.  Skills 

to  meet 

shortages 

skills 

and 

of 

the  EU  average 

Amid  rising  enrolment rates,  the  quality  and 
availability of ECEC remains insufficient and 
is  uneven  across  the  territory  (418).  In  2024, 
enrolment  in  ECEC  for  children  aged  three  until 
compulsory  primary  education  stagnated 
(-- 
0.5 percentage  points  (pps))  at  90.7%,  remaining 
below 
(95.0%).  Enrolment 
continues  to  be  marked  by  regional  differences, 
with  the  lowest  rate  reported  in  Styria  (83.3%), 
and  the  highest  in  Lower  Austria  (97.5%).  As 
regions  and  municipalities  are  responsible  for 
providing  ECEC  services  in  Austria,  quality  and 
availability  differ  across  institutions  and  regions. 
Participation  among  children  under  three  is  still 
significantly below the EU average in 2025 (30.9% 
is  approaching  the  national 
vs  40.5%)  but 
Barcelona  target  of  31.9%  following  increases  in 
recent  years (419).  Since  2014,  the  rate  has 

(418) CSR 2025.5.2: ‘and the full-time labour market participation 
of women, including by improving quality and availability of 
childcare services’. 

(419) Eurostat EU-SILC and national statistics can diverge, as the 
former are survey-based and the latter register-based. 
National data also reveal significant regional differences. 

increased by 8.6 pps, although this is slower than 
the EU average (10.6 pps).  

the 

scope 

shortages 

Staff 
for 
limit 
expanding  ECEC  places  and  services.  Recent 
studies  identify  shortages  of  more  than  20 000 
trained staff by 2030 (420). Students can opt for a 
career in ECEC at an early age (15 years) and are 
given  the  right  to  access  higher  education  upon 
completing  secondary  education.  However,  about 
half  of  graduates  never  enter  the  profession  but 
after 
pursue 
career 
alternative 
graduation (421).  To  address 
the 
government has adopted an information campaign 
and a comprehensive training initiative to increase 
training  places  and  launch  new  training pathways 
across  all  relevant  institutions  within  the  ECEC 
sector.  Moreover,  universities  of  applied  sciences 
aim to increase the number of people training for 
the ECEC profession (by at least 100 entrants per 
year, over a period of three years (422). 

paths 
shortages, 

between 

agreement 

limited  opportunities 

financing 
further 

capabilities 
constrain 

of 
The 
limited 
municipalities 
the 
availability and quality of ECEC. Municipalities 
have 
to  generate  own 
resources.  Yet,  on  average,  they  covered  around 
72% of costs of ECEC over the past decade, while 
state  and  federal  funding  accounted  for  the 
remainder.  In  the  period  2022/23  to  2026/27,  a 
funding 
federal 
government  and  the  federal  provinces  supports 
ECEC  services  with  EUR 1 billion  annually  and 
between  2024-2030,  under  the  Zukunftsfonds 
(423), around EUR 550 million per year in additional 
resources  is  made  available  to  fund  additional 
places  and 
coalition 
agreement  envisages 
the  establishment  of 
compulsory  quality  standards.  Planned  measures 
to further extend ECEC and to improve quality are 
expected  to  lead  to  EUR 7.1 billion  in  additional 
funding  between  2024  and  2030 (424).  This 
reduces  municipalities’  contributions  to  64%  by 

improve  quality.  The 

the 

(420) Köppl-Turyna, M. - Graf, N.,  Studienbericht. Kosten einer 

Kinderbetreuungsgarantie. Wien, 2023. 

(421) Wirth, K, et al., Personalknappheit im Bereich der 

Elementarpädagogik, KDZ, 2023.   

(422) BMB, Sonderrichtlinie für die Förderung von Studienplätzen 

„Elementarpädagogik“, 2025.  

(423) Bundesministerium für Finanzen, Raab/Brunner: Gelder für 

die Kinderbetreuung. 2024. 

(424) Städtebund, Quo vadis elementare Bildung?, 2024. 

108 

 
 
 
 
 
2030.  However,  increasingly  strained finances  of 
local  authorities  remain  a  major  bottleneck  for 
expansion (425). Yet, there is still  scope  for further 
measures.  

can 

and 

students’ 

accumulates 

Austria  is  taking  measures  to  improve  basic 
skills amid pronounced inequalities (426). While 
the share of top performing students exceeds the 
EU  averages  across  subjects,  underperformance 
has  been  growing  since  2012(427)  and 
is 
significantly 
socio-
influenced  by 
economic  and  migration  background  (see  Country 
Report  2025).  Regarding  digital  skills,  Austrian 
students,  on  average,  outperform  their  peers 
across  the  EU.  However,  also  here,  performance 
differs  by  gender  and  socio-economic  and 
migration  background.  Low  performance  in  basic 
skills 
hamper 
intergenerational  mobility (428).  The  2023  UN 
monitoring  of  the  Convention  on  the  Rights  of 
Persons  with  Disabilities  reveals  that  progress  in 
inclusive  education  is  insufficient.  The  inclusion 
rate in schools has been stagnating for years and 
remains at around 63%. An overall strategy in this 
area  is  lacking.  In  addition,  OECD  Talis  2024 
identified Austria as having a distinctively low rate 
of  inclusion  in  schools  (8.1%;  EU  average:  50.2). 
The rate of young people leaving school early has 
increased  steadily  over  10  years  to  10.0%  and 
remains  above  the  EU  average  (9.3%)  with  a 
particular recent increase among native born. It is 
noticeably higher in cities and among foreign born 
pupils.  At  48.8%,  the  share  of  students  with  a 
migrant, and 
disadvantaged, 
background  is  high  and  rising  (429),  so  there  is  a 
need  for  more  support  and  more  teaching  staff, 
including  to  help  address  language  barriers.  In 
2025,  the  government  adopted  an  innovative 
model to distribute resources based on the socio-
economic profile (”SÖL” classification) a promising 
approach  (“Chancenbonus”  programme)  supported 
by  stakeholders  and  social  partners.  Moreover,  to 
strengthen  learning  outcomes,  in  2025,  Austria 
launched  the  online  platform  ‘Digitale  Drehtür’ 

often 

also 

(425) Mitterer, K., Durch Finanzausgleichsreformen 

Handlungsräume der Gemeinden sichern, 2025.  

(426) CSR 2025.5.4: ‘and raise the levels of basic skills, starting 

from an early age, notably at school level’.  

(427) In the 2022 OECD PISA survey, 24.9% of 15-year-olds 
underperformed in mathematics, 25.3% in reading and 
22.7% in sciences.  

supporting  all  but  especially  talented  students. 
Since  2024,  to  further  support  well-performing 
students,  Austria  has  launched  several  initiatives 
that offer individualised learning. Austria has also 
strengthened its monitoring practices with the new 
quality management system QMS 2.0, which helps 
teachers  and  schools  to  improve  teaching  and 
learning (430).  Early  tracking  at  the  age  of  10 
remains a major structural hurdle. 

to  high  attrition 

Teacher  shortages  remain  significant,  also 
due 
rates.  Between 
2014/2015 and 2022/2023, teacher attrition rates 
at  the  primary  and  secondary 
levels  nearly 
doubled from 3.2% to 6.2%, in equal parts due to 
retirement  and  voluntary  exit.  58%  of  teachers 
leave with less than five years of experience (431). 
In  2022/2023,  4 778  positions  in  primary  and 
secondary  education,  or  4.6%  of  all  teaching 
positions,  were  vacant.  At  the  same  time,  the 
share  of  teachers  occupying  positions  for  which 
they are not fully qualified has risen from 2.4% to 
5.7%.  The  ageing  teacher  workforce  and  the 
declining  number  of  student  teachers  further 
exacerbate  shortages  (see  Country  Report  2025). 
teachers  face 
While  salaries  are  attractive, 
challenging  environments  and 
lack  support. 
Austrian  teachers  are  more  satisfied  with  their 
salaries than their EU peers (71.9% vs 37.3%) (432). 
However,  stress  has  increased  since  2018  due  to 
problems  with 
and 
classroom 
administrative  burden.  Austria  has  one  of  the 
highest  shares  of  teachers  in  schools  with  more 
than 10% of students that are not native speakers 
of  the  teaching  language  (62.6%;  EU  average: 
24.4%). However, only 16.8% (EU average: 15.4%) 
of these teachers report connected learning needs. 
Participation  in  impactful  professional  learning 
declined between 2018 and 2024, from 79.6% to 
40.7% (EU average in 2024: 56%). 

discipline 

Austria  has  adopted  various  initiatives  and 
reforms  to  make  the  profession  more 
attractive,  improve  working  conditions  and 
increase  the  supply  of  teachers.  Under  the 
‘Klasse  Jobs’  department strategy,  the  Ministry  of 
Education  conducts  several  activities  to  attract 
young  talent  and  to  motivate  professionals  from 
other  disciplines  to  pursue  a  career  in  teaching. 

(430) European Commission, Education and Training Monitor, 2025.  

(428) Produktivitätsbericht der Regierung imfname_1665036.pdf. 

(431) OECD, Education at a Glance 2025: Austria. 

(429) OECD, PISA 2022, Table I.B1.7.5. and Table I.B1.7.6. 

(432) OECD, Results from TALIS 2024. 

109 

 
 
 
The recently reformed initial teacher training aims 
to  improve  the  attractiveness  of  teaching  by 
allowing  faster  graduation  at  the  bachelor’s  level. 
In  2024/2025,  a  competence  profile  for  teachers 
was  developed (433),  also  to  be  used  in  quality 
mapping. The 2025-2029 government programme 
plans  a  stronger  link  between  teacher  education 
and  practical  challenges.  To  increase  teachers’ 
wellbeing  in  schools  and  help  them  face  difficult 
situations,  special measures  are  being introduced, 
such 
prevention.  Moreover, 
administrative  processes,  including  recruitment, 
have  been  digitalised  for  central  access  in  a 
decentralised administrative structure. 

violence 

as 

Graph A13.1: Number of apprentices in Austria 

Source: Lehrlingsstatistik, WKÖ 

Austria’s  VET  system  performs  strongly  but 
faces  structural  challenges  and 
fewer 
training  opportunities.  The  share  of  upper 
secondary  students  enrolled  in  medium-level  VET 
continues to be well above the EU average (70.1% 
vs 52.9% in 2024). In 2024, 84.7% of recent VET 
graduates (20-34) had participated in work-based 
learning  (EU  average:  65.2%)  and  85.3%  were  in 
employment  (EU  average:  80.0%),  reflecting  the 
generally  strong  performance  of  the  VET  system. 
However, on a structural level, declining basic skills 
of  pupils  and  decreasing  incentives  for  employers 
to 
hampering 
training 
competitiveness.  Since  2010,  the  number  of 
apprentices  has  diminished  by  almost  21%  (see 
training 
Graph  A13.1),  and 
companies  has  dropped  by  nearly  one  third (434). 
Simultaneously,  though  two  thirds  of  apprentices 
experience very good framework conditions, some 
challenges  to  the  quality  of  training  exist.  Some 
apprentices 
limited 
documentation  of  training,  and  tasks  unrelated  to 
their  occupation,  while  digitalisation  in  training 

report  weak  supervision, 

the  number  of 

invest 

risk 

in 

in 

increase  further 

companies  remains 
low,  with  only  18%  of 
apprentices being exposed to digital tools (435). And 
even though the number of applications has been 
declining  for  over  a  decade,  there  were  fewer 
apprenticeships  than  applicants in  2025  (436).  This 
light  of  the 
gap  might 
increasing demand for VET skills and the projected 
high numbers of future enrolments (437); resources 
for VET schools,  notably on school-based training, 
may  need  to  be  increased  accordingly.  Moreover, 
notable regional disparities exist in the availability 
of apprenticeship opportunities. In Vienna, for over 
seven  apprenticeship  seekers,  there  was  only  one 
vacancy available, whereas in Upper Austria, there 
were  two  positions  available  for  each  interested 
applicant (438).  

Recent measures aim to better align the VET 
system  with 
labour  market  needs  and 
strengthen  the  provision  of  skills  and 
competences. The entry into force of the Federal 
Act on Higher Vocational Education and Training in 
May  2024  enables  further  alignment  with  the 
labour  market  and  establishment  of  new  higher 
VET  modules  and  qualifications.  According  to  the 
Austrian  Economic  Chamber,  up  to  2.4  million 
skilled  workers  could  benefit 
from  higher 
vocational qualifications. Several curricula changes 
in  VET  have  been  implemented  since  2022 (439) 
and  in  2025  the  Green  Skills  Competence  Centre 
was  created  to  increase  synergies  among  VET 
in  greening.  The  higher 
providers 
professional qualification ‘Technical Consulting for 
Energy  Efficiency’  entered  into  force  in  2025. 
Moreover,  the  public  employment  service  (PES) 
subsidises  inter-company  training  for  unplaced 
applicants 
total  apprentices).  The 
‘AusbildungsFit’  project  funded  by  the  European 
Social Fund Plus (ESF+) supports vulnerable young 
people in accessing training and employment. The 
apprenticeship  system  could  be  strengthened  by 
improving  monitoring  and  provision  of  basic  skills 
in  schools  (including  VET  schools),  access  to 
education  and  training  for  people  with  a  migrant 

(5%  of 

investing 

(435) Arbeiterkammer, Lehrlingsmonitor 2026.   

(436) ibw, Lehrlingsausbildung im Überblick 2024.  

(437) See Statistik Austria, 2025.  

(438) ibw, Aktuelle Daten und Fakten zur Lehrlingsausbildung in 

(433) BMB: Berufsbild für Lehrer*innen, 2025.   

Österreich, ibw research brief, 2025.  

(434) AMS, Die Lehrausbildung am österreichischen Arbeitsmarkt.  

(439) CEDEFOP, Green transition in VET.  

110 

98000100000102000104000106000108000110000201020202022202320242025 
  
 
 
background,  quality  control of  education  (440)  and 
apprenticeships (441), and psycho-social support.  

Austria  has  implemented  reforms  to  boost 
STEM  enrolment 
in  VET,  though  gender 
disparities  persist.  In  2024,  39.5%  of  medium-
level  VET  students  were  enrolled  in  STEM  fields, 
well  above  the  EU  average  (36.6%).  15.3%  were 
women, slightly below the EU average (15.9%). To 
address  this,  Austria’s  PES  supports  women 
like 
pursuing  VET 
construction 
Several 
governmental  initiatives  under  the  new  industrial 
strategy  aim  to  increase  STEM  enrolment (442), 
such  as  the  STEM  quality  seal (‘MINT-Gütesiegel’) 
for  kindergartens  and  all  schools  or  the  STEM 
Regions (443)  quality  seal,  which  aims  to  build 
regional  networks  across  federal  states,  engaging 
children with STEM, in particular girls.  

in  high-demand 
and 

engineering. 

fields 

attainment 

educational 

is 
Tertiary 
increasing, but regional disparities remain. In 
2025,  43.7% of  young  people  (25-34)  held  a 
tertiary education degree, with women being more 
likely to hold one. While approaching the 45% EU-
level  target,  disparities  persist  between  regions, 
spanning  from  36.6%  in  Vorarlberg  to  51.1%  in 
Vienna.  This  difference  is  due  to  the  location  of 
universities and when they have been established, 
geography,  economy  and  demographics.  In  2023, 
STEM  enrolment  among  tertiary  students  was  at 
29.3%,  surpassing  the  EU  average  of  26.9%,  but 
still below the proposed EU target of 32%. 52.1% 
of STEM students are enrolled in engineering, with 
46.7%  at  PhD  level.  Austria  aims  to  raise  female 
participation in  STEM  fields  to  38%, up  from  only 
in  2023 (444).  Women  are  particularly 
32.5% 
under-represented 
and 
in 
communications  technology  (ICT),  accounting  for 
only  21.4%  of  doctoral  students  in  this  field. 
Austria  started  to  formulate  a  higher  education 
strategy for 2040. It aims to create an educational 
and  scientific  environment  favouring  innovation 
and  excellence  by  recognizing  and  promoting 
diversity,  the  social  dimension,  and  cooperation 

information 

(440) Rechnungshof, Bestandsaufnahme Fachkräftemangel, 2024, 

p. 56.  

(441) Arbeiterkammer, Lehrlingsmonitor 2026.   

(442) BMWET, Industriestrategie Österreich 2035, 2026.  

(443) Home- MINT Regionen, European Commission, Education and 

participation 

among  higher  education  institutions.  Initiatives  to 
STEM 
increase  women’s 
occupations  include  a  planned  extension  of  the 
women’s  fund  ‘Let’s  Empower  Austria’,  which 
organises  workshops,  seminars,  projects  and 
events to inform women about career offers. 

in 

to 

that 

require 

Austria 

expected 

shortages 

Skills 
persist, 
in 
highlighting  the  need  for  a  comprehensive 
approach.  Amid  wider  labour  shortages,  a  WKÖ 
survey  from  March/April  2025  revealed  that  56% 
of  surveyed  companies  struggled  to  fill  vacancies 
for skilled workers. In particular, the recruitment of 
skilled tradespeople (42%) is proving difficult (445). 
Moreover,  by  2030,  most  job  openings  in  Austria 
are 
require  medium-level 
qualifications,  primarily  in  VET (446).  Next  to  skills 
shortages, relatively high labour surpluses persist, 
in particular in occupations at risk of displacement 
due  to  automation  and  digitalisation (447). 
In 
addition,  80%  of  companies  reported  greater 
difficulties  filling  positions 
the 
completion  of  apprenticeships (448).  Upskilling  and 
reskilling, along with attracting skilled talent from 
abroad,  can  help  mitigate  shortages and  meet 
labour  market  needs  (449).  Many  non-EU  workers, 
however,  are  overqualified  (41.2%)  compared  to 
Austrians (24.3%) and other EU nationals (34.6%), 
as  procedures  in  Austria  for  recognizing  foreign 
qualifications  from  outside  the  EU  are  often 
decentralized. 
transparent 
recognition  of  foreign  qualifications  can  facilitate 
the integration of skilled migrant workers into the 
labour market, enabling them to contribute in roles 
that  match  their  expertise.  Additionally,  targeted 
investments  in  VET,  enhanced  quality  assurance 
mechanisms, and incentives for small to medium-
sized  enterprises  to  expand  training  programmes 
could  help  mitigate  skills  gaps.  Promoting  age-
inclusive workplace policies and adapting job roles 
to  the  needs  of  older  workers  may  also  help 
companies 
retain  experienced  professionals, 
preserving  their  skills  within  the  labour  force.  In 
Austria,  tools  such  as  the  Job  Barometer  and  the 
employer-driven Skilled Labour Radar provide data 
on  occupational  trends  and  skills  requirements. 
While  skills  intelligence  foresight  is  conducted 

timely  and 

The 

(445) IBW, Arbeits- und Fachkräftemangel in Österreich 2025.  

(446) CEDEFOP, Future employment needs. 

(447) EURES, Report on labour shortages and surpluses 2024.  

Training Monitor, 2025. 

(448) WKÖ, Fachkräfte-Radar, 2025.  

(444) See Eurydice, National reforms in higher education.  

(449) Rechnungshof, Bestandsaufnahme Fachkräftemangel, 2024.  

111 

 
 
 
completed  vocational  education.  This  highlights 
socio-economic inequalities in taking up training. In 
addition,  basic  skills  among  adults,  as  reported  in 
PIAAC,  have  been  deteriorating,  particularly  in 
reading (see Country Report 2025).  

it 

lacks  the  provision  of 

To  address  these  challenges,  Austria  has 
launched  several  initiatives.  The 
‘Level-Up 
Adult  Education’  programme,  co-financed  by  the 
ESF+,  provides  free  and  quality-assured  basic 
skills classes for adults as well as courses leading 
leaving  certificate. 
to  a  compulsory  school 
language 
However, 
classes.  Improving  access  to  childcare,  especially 
in rural areas, and ensuring adequate coverage of 
language training in all Länder can help to remove 
inequalities in access to training. However, flexible 
upskilling  and  reskilling  pathways  such  as  ‘du 
kannst  was’  do  not  cover  all  federal  states.  Amid 
high  skills  shortages  and  rising  unemployment, 
there is space to further strengthen upskilling and 
reskilling,  notably  among 
low-skilled  people, 
unemployed people, older workers and people with 
a  migrant  background.  Improving  the  cooperation 
between  the  federal  and  the  state  levels  to 
develop 
the 
involvement  of  social  partners  and  an  increased 
focus  on  shortage  occupations,  can  support 
competitiveness in the medium term. 

‘LLL-Strategy  2040’,  with 

the 

systematically  (by  Synthesis  Forschung)  and  the 
Job  Barometer  allows  for  comparison  among  the 
Länder, a register of occupations is lacking.   

jobs  (57%),  and 

With the transition of its economy, Austria is 
experiencing  a  rising  demand  for  green  and 
digitals  skills  (450).  Austria  aims  to  achieve  net-
zero  emissions  in  electricity  production  by  2030 
and full climate neutrality by 2040. While a large 
share  of  future  green  jobs  will  be  created  by 
adapting  existing  jobs,  the  areas  of  lifelong 
learning  experiencing  the  greatest  increase  in 
importance are artificial intelligence (71%), future 
technologies / green 
IT  skills 
(50%) (451). Labour shortages in sectors relevant to 
the  green  transition  are  particularly  high 
in 
construction  (5.9%),  transportation  and  storage 
(4.0%),  manufacturing  (3.1%)  and  energy  (2.7%). 
High  digital  skills  levels  co-exist  with  persistent 
gaps  across  age,  education  and  employment 
status.  Austria  boasts  a  high  level  of  digital 
proficiency, with 69.7% of its population having at 
least  basic  digital  skills  in  2025,  significantly 
above  the  EU  average  of  60.4%.  Austria’s 
workforce also includes a higher proportion of ICT 
specialists  (5.3%)  compared  to  the  EU  average 
(5.0%).  However,  fewer  digital  skills  are  found 
among  older  people  (55-64),  at  63.02%.  Digital 
skills  are  also  lower  among  people  with  low 
qualifications,  unemployed  people  and  people 
outside the labour force.  

basic 

disparities 

socio-economic 

skills,  Austria 

and 
Amid 
declining 
faces 
challenges in meeting its 2030 adult learning 
(25-64) 
In  2022,  52.2%  of  adults 
target. 
participated in training,  well below  Austria’s  2030 
national  target  of  62%.  Even  though  this  was 
above  the  EU  average  of  39.5%,  it  represents  a 
decline by 3.1 pps since 2016. Though more recent 
labour  force  survey  data  point  to  an  increase  in 
participation  among  25–64-year-olds  between 
2022  and  2024,  participation  in  adult  learning 
events  organised  by the  10  largest  adult  learning 
providers 
levels, 
according  to  KEBÖ  2024  data.  About  26.7%  of 
adults  with  only  compulsory  education  report 
having participated in informal training in the past 
those  who 
year,  compared  with  49.7%  of 

remains  well  below  2019 

(450) CSR 2025.5.5: ‘Step up policy efforts aimed at the provision 
and acquisition of skills and competences needed for the 
green transition.’ 

(451) PbEB, Weiterbildungsstudie, 2025. 

112 

 
 
ANNEX 14: SOCIAL SCOREBOARD 

Table A14.1:Social Scoreboard for Austria 

Update of 4 May 2026. Members States are categorised based on the Social Scoreboard according to a methodology agreed with 
the EMCO and SPC Committees. Please consult the Annex of the Joint Employment Report 2026 for details on the methodology 
(https://employment-social-affairs.ec.europa.eu/joint-employment-report-2026_en). 
Source: Eurostat 

113 

52.210.069.810.36.84.3577.65.71.3102.818.825.332.818.86.530.90.9Critical situationTo watchWeak but improvingGood but to monitorOn averageDynamic labour markets and fair working conditionsSocial protection and inclusionShare of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2025)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2025)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2025)Self-reported unmet need for medical care (% of the population aged 16+, 2025)Disability employment gap (percentage points, population aged 20-64, 2025)Housing cost overburden (% of the total population, 2025)Adult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Equal opportunities and access to the labour marketBest performersBetter than averageEarly leavers from education and training(% of  the population aged 18-24, 2025)Young people not in employment, education or training(% of the population aged 15-29, 2025)Gender employment gap(percentage points, population aged 20-64, 2025)Income quintile ratio (S80/S20, 2025)At risk of poverty or social exclusion (AROPE) rate (% of the total population, 2025)Employment rate(% of the population aged 20-64, 2025)Unemployment rate(% of the active population aged 15-74, 2025)Long term unemployment(% of the active population aged 15-74, 2025)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2024)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2025) 
 
 
 
  
 
 
ANNEX 15: HEALTH AND HEALTH SYSTEMS 

health 

system 

Austria’s 
performs 
comparatively well, with a relatively low rate 
of  avoidable  mortality.  However,  the  2025 
country-specific recommendation (CSR) highlighted 
challenges  in  improving  the  fiscal  sustainability 
and 
cost-effectiveness  of  healthcare,  and 
streamlining  hospital  infrastructure.  In  addition, 
Austria  faces  shortages  of  healthcare  workers. 
These  challenges  need  to  be  addressed  if  the 
country  is  to  ensure  the  health  of  its  population, 
social fairness and productivity.  

Life  expectancy  at  birth  in  Austria  remained 
higher  than  the  EU  average  in  2024.  As  in 
other EU countries, women in Austria can expect to 
live longer than men (4.7 years longer). That said, 
they  can  only  expect  to  live  around  0.2  years 
longer  than  men  in  good  health.  At  age  65,  the 
healthy  life  expectancy  is  higher  than  the  EU 
average, and the prevalence of multimorbidity (the 
presence of multiple chronic conditions in patients) 
is  lower  than  the  EU  average.  Austria  fares 
comparatively  well 
in  avoiding  deaths  from 
treatable  causes.  The  rate  of  avoidable  hospital 
admissions  for  conditions  that  are  sensitive  to 
management  at  outpatient  care  level  was  14% 
below  the  EU  average  in  2023  (452).  In  the  same 
system 
the 
year,  diseases  of 
(‘cardiovascular  diseases’)  and  cancer  were  the 
leading  causes  of  death.  The  mortality  rate  from 
cardiovascular  diseases  was  higher  than  the  EU 
average, while the cancer mortality rate was lower 
than  the  EU  average.  However,  cancer  cases  are 
projected  to  rise  significantly  by  2040:  by  23%, 
which  is  higher  than  the  18%  increase  projected 
across  the  EU.  Despite  falling  since  2014,  the 
suicide rate was above the EU average in 2023. 

circulatory 

Austria  prioritises  disease  prevention  but 
there  is  scope  to  increase  efforts.  The  share 
of  spending  on  prevention  stood  at  4.3%  of 
Austria’s  total  health  expenditure  in  2023,  above 
the  EU  average  of  3.7%.  While  the  rate  of 
lower  than  the  EU 
is 
preventable  mortality 
average,  it  trails  the  rate  in  countries  in  Western 
Europe.  Around  one  quarter  of  deaths  in  Austria 
are linked to behavioural risk factors, with Austria 
levels  of  alcohol 
having  among  the  highest 
consumption and the highest smoking rates in the 
EU.  Alcohol  consumption  is  linked  to  11%  of 

(452) OECD/European Observatory on Health Systems and Policies 
(2025), Country Health Profile 2025: Austria. State of Health 
in the EU. 

in 

limited 

regional 

preventable  deaths,  yet  there  are  no  large-scale 
national programmes targeting alcohol abuse, with 
interventions 
initiatives. 
to 
Similarly, 
initiatives  to  prevent  cardiovascular 
diseases  are  limited  to  pilot  programmes  in 
the  absence  of  national 
federal  states, 
comprehensive strategies. Uptake of breast cancer 
screening  is  much  lower  than  across  the  EU.  The 
obesity  rate  among  adults  is  above  the  EU 
average,  while  overweight  and  obesity  rates 
among  adolescents 
increased  by  over  50% 
between  2010  and  2022  (453),  raising  concerns 
and 
about 
cardiovascular diseases in the future. 

prevalence 

diabetes 

the 

of 

Graph A15.1: Treatable mortality 

Age-standardised death rate - mortality that could be avoided 
through optimal quality healthcare. 
Source: Eurostat (indicator: hlth_cd_apr) 

is  expected  to  exert 
Population  ageing 
considerable  pressure  on  Austria’s  health 
system,  highlighting  the 
importance  of 
strengthening preventive measures. According 
to the 2024 Ageing Report (454), public spending on 
health  in  Austria  is  projected  to  increase  by  1.7 
percentage  points  (pps)  of  GDP  by  2070  under  a 
‘no  healthy  ageing’  scenario.  However,  this  could 
be  limited  to  0.6  pps  of  GDP  under  a  ‘healthy 
ageing’  scenario,  highlighting  the  importance  to 
the  prevention  of  non-
increase  efforts 
the 
communicable 
sustainability  of  the health system (see Annex 2), 
and  in  turn  address  the  2025  CSR.  Austria 
participates  in  joint  actions  funded  by  EU4Health, 
such  as  PreventNCD  (455)  and  EUCanScreen  (456), 

diseases 

support 

to 

in 

(453) Country Health Profile 2025: Austria – see earlier footnote. 

(454) 2024 Ageing Report. Economic and Budgetary Projections for 

the EU Member States (2022-2070). Brussels, 
doi:10.2765/022983.   

(455) JA PreventNCD - Reducing Europe's cancer and NCD burden 
through coordinated strategies on health determinants. 

114 

77.773.270.471.269.268.594.889.291.793.389.786.8201420192020202120222023per 100 000 populationAustriaEU 
 
 
       
 
 
 
reducing 

aimed  at 
the  burden  of  non-
communicable  diseases.  Strengthening  disease 
prevention  is  also  among  the  priorities  of  the 
2024-2028  health  reform  package.  This  directs 
additional  funding  into  health  promotion  and 
disease  prevention  programmes,  including  the 
nationwide roll-out of early childhood intervention 
programmes  for  pregnant  women  and  young 
parents  under  Austria’s  recovery  and  resilience 
plan  (RRP).  The  reforms  also  aim  to  integrate 
preventive services, such as routine health checks, 
into  the  primary  healthcare  centres.  To  improve 
vaccination  rates,  the  government  has  been 
removing 
freely 
available 
influenza  vaccinations  for  all 
residents  and  the  vaccination  for  the  human 
papillomavirus (HPV) to everyone up to age 21. 

financial  barriers,  making 
the 

Health spending in Austria is skewed towards 
inpatient  hospital  care. 
In  2023,  health 
spending  per  inhabitant  in  Austria  (adjusted  for 
differences  in  purchasing  power)  was  among  the 
highest  in  the  EU,  with  the  largest  share  (higher 
than the EU average) going towards inpatient care. 
This reflects a persistently high number of hospital 
beds (589 per 100 000 population in 2023, much 
higher than the EU average), despite a reduction in 
recent  years.  Reliance  on  hospital-based  care  is 
evidenced by high volumes of elective procedures 
such  as  hip  and  knee  replacements,  which  are 
39% and 51% respectively above the average EU 
levels  (457).  However,  the  occupancy  rate  of 
hospital  beds  remains  low  (69.2%  in  2023) 
suggesting  an  inefficient  allocation  of  resources. 
The  publicly  financed  share  (as  percentage)  of 
total  health  expenditure  in  Austria  was  below  the 
EU  average  in  2023.  Consequently,  the  share  of 
households’ 
for 
healthcare  was  higher  than  the  EU  average, 
relating  mainly  to  costs  for  outpatient  medicines, 
long-term  care,  dental  care  and 
increasing 
payments 
to  private  doctors  who  are  not 
contracted  with  social  health insurance  (SHI).  This 
reliance  on  private  expenditure  raises  concerns 
about  the  emergence  of  a  two-tier  system  with 
potentially negative impact on equitable access to 
healthcare, 
is  not 
expanded. 

if  publicly-funded  capacity 

out-of-pocket 

payments 

(456) EUCanScreen - Implementation of cancer screening 

programmes. 

(457) Country Health Profile 2025: Austria – see earlier footnote. 

Graph A15.2: Out-of-pocket payments: share in 
healthcare spending and categories, 2023 

Household out-of-pocket payment: direct payment for 
healthcare goods and services from the household primary 
income or savings, where the payment is made by the user at 
the time of the purchase of goods or the use of the services 
(Eurostat). VHI: voluntary health insurance. 
(1) Others: eyeglasses, hearing aids, lab tests... 
Source: Eurostat and Country Health Profiles - Dashboard 

Reforms  aim  to  strengthen  cost  control  and 
shift  the  spending  balance  from  hospital  to 
outpatient  care,  but  there  is  scope  for 
further  changes.  Pharmaceutical  expenditure  in 
inpatient  settings  is  growing,  driven  by  increased 
use of high-cost specialised  medicines. As part of 
the  2024  health  reform,  the  Federal  Appraisal 
Board was established with the task of evaluating 
high-priced  and  specialised  medicines  used  in 
hospitals.  In  this  context,  a  national  negotiation 
team has been established to negotiate prices for 
medicines  assessed  by  the  Appraisal  Board.  For 
the  time-being  though,  the  final  responsibility  for 
procuring  medicines  remains  with  the  hospitals. 
Furthermore,  the  uptake  of  generic  medicines  in 
Austria  is  relatively  low,  limiting  the  scope  for 
savings  in  pharmaceutical  expenditure.  Changes 
have  been  implemented  to  the  diagnosis-related 
groups model, aiming at reducing the provision of 
supply-induced  inpatient  services  and  enhancing 
the  attractiveness  of  outpatient  care.  As  part  of 
other reform measures, the national health hotline 
(1450)  will  become  a  key  entry  portal  for  the 
health system, serving as a triage tool and guiding 
patients  to  the  appropriate  levels  of  care.  Video 
consultations  will  be  expanded  as  a  first  line  of 
patient  contact  before 
In 
November  2025,  the  government  established  a 
health reform fund with EUR 500 million annually 
for  2026  to  2030.  The  aim  is  to  modernise  the 
health system, focusing on expanding the number 
the 
of  primary  healthcare  centres 

in-person  visits. 

(112 

in 

115 

77%16%7%21%18%18%16%18%9%Gov. & CompulsoryOut-of-pocket (OOP)Voluntary (VHI)PharmaceuticalsOutpatient careLong-term careOthersDental careInpatient careShare ofspendingOOP BreakdownOOP share -EU-27 average:15% 
 
        
Table A15.1:Key health indicators 

*The EU average is weighted for all indicators except for doctors and nurses per 1 000 population, for which the EU simple 
average is used based on 2023 data (or latest available). Doctors’ density data refer to practising doctors in all countries except 
Greece, Portugal (licensed to practise) and Slovakia (professionally active). Density of nurses: data refer to practising nurses (EU 
recognised qualification) in most countries except Portugal (licensed to practice) and Slovakia (professionally active). Latest data 
update on nurses for Belgium and Sweden: 2022; for France: 2021; for Luxembourg: 2017. 
** latest available 10-year trend: ratio 2023/2014 or 2024/2013; a factor of 2.00 means that it has doubled in 10 years. 
***‘Available hospital beds’ covers somatic care, not psychiatric care. 
Source: Eurostat 

beginning  of  2026)  to  255  within  five  years  and 
extending 
to  avoid 
their  opening  hours, 
unnecessary  referrals  to  specialist  or  hospital-
based  care.  Austria  has  requested  technical 
support  as  part  of  a  multi-country  project  under 
the  Technical  Support  Instrument.  Through  this 
system 
project,  Austria  will  apply  health 
performance  assessment  methods  to 
identify 
areas  of  suboptimal  performance  and  improve 
resource allocation.  

A  shift  towards  community-based  care  is 
emerging,  but  accompanying  this  shift  with 
more  flexible  budgetary  rules  could  be 
beneficial  for  the  country.  Between  2018  and 
2023,  the  hospital  admission  rates  for  chronic 
conditions  such  as  diabetes  and  chronic  heart 
failure  declined  much  faster  than  across  the  EU. 
During the same period, there was a 16% decline 
in  the  overall  inpatient  discharges  (458).  These, 
together with the ongoing establishment of multi-
disciplinary  primary  healthcare  centres  (supported 
by  Austria’s  RRP),  point  to  a  gradual  shift  away 
from  hospital-centred  care.  This  direction  of 
change  could  contribute  to  improving  the  cost-
effectiveness 
of 
fiscal 
healthcare,  and  the  use  of  hospital  infrastructure, 
thus could contribute to addressing the 2025 CSR. 
However, SHI funds remain obliged to pay a fixed 
budget  to  hospitals,  even  if  inpatient  activity  is 
reduced,  which  counters  the  potential  for  better 
cost-effectiveness and fiscal sustainability.   

sustainability 

and 

(458) Country Health Profile 2025: Austria – see earlier footnote. 

in 

and 

and 

uneven 

geographical 
Shortages 
distribution  of  health  professionals  cause 
concerns  over  access  to  healthcare.  The 
density  of  doctors  and  nurses  in  Austria  is  well 
above  the  EU  average.  However,  this  masks 
imbalances 
geographic 
specialty 
distributions,  as  well  as  the  level  of  capacity 
required  to  meet  the  expected  rise  in  healthcare 
demand.  On  average,  there  are  551  practising 
doctors  per  100  000  population,  but  densities 
range from 705 in Vienna to 446 in Upper Austria 
(459). The share of general practitioners (GPs) is low 
and  dropped  from  16%  of  all  doctors  in  2010  to 
13%  in  2023.  This  has  led  to  shortages  of  GPs, 
leaving many SHI-contracted posts unfilled, mainly 
in rural areas. The overall number of doctors who 
are  SHI-contracted  has  more  or  less  stagnated  in 
2000-2023.  That  said,  the  number  of  private 
doctors  who  are  not  SHI-contracted  more  than 
doubled during the same period and has exceeded 
the  number  of  SHI-contracted  ones.  This  shift  in 
balance 
towards  non-SHI-contracted  private 
practice intensifies geographic and socio-economic 
imbalances  and  drives  variation  in  waiting  times 
for  accessing  healthcare.  Evidence  indicates  that 
shorter  waiting  times  are  associated  with  having 
(460). 
supplementary  private  health 
Moreover, around 34% of doctors are aged 55 and 
over,  and  only  around  20%  are  aged  below  35, 

insurance 

(459) Country Health Profile 2025: Austria – see earlier footnote. 

(460) Kraus, M., Stacherl, B., Czypionka, T., & Mayer, S (2024). Equal 

waiting times for all? Empirical evidence for elective 
surgeries in the Austrian public healthcare system. 

116 

2020202120222023202410-year change**EU average* (latest year) Cancer mortality per 100 000 population230.5224.7226.1221.2n.a.0.89233.1 (2023)Mortality due to circulatory diseases per 100 000 population 361.0 343.3 346.6 333.4n.a.0.80313.0 (2023)Current expenditure on health, purchasing power standards, per capita4 0954 7894 8344 9015 1921.423834.9 (2023)Public share of health expenditure, % of current health expenditure 76.4 77.8 77.2 76.7 76.31.0480.6 (2023)Spending on prevention, % of current health expenditure 3.210.47.54.3n.a.2.023.7 (2023)Available hospital beds per 100 000 population*** 636 620 600 589n.a.0.89440 (2023)Doctors per 1 000 population*5.35.45.45.55.61.144.3 (2023)*Nurses per 1 000 population* 10.3 10.7 10.7 10.3n.a.1.577.6 (2023)*Mortality at working age (20-64 years), % of total mortality13.414.113.613.713.60.9214.3 (2023)Consumption of antibiotics in the community and hospital sectors,      defined daily doses per 1 000 inhabitants 8.8 8.8 10.5 11.3 11.8n.a.20.3 (2024) 
 
 
 
      
 
raising  concerns  about  the  long-term  accessibility 
of  health  services.  There  are  similar  challenges 
regarding  the  adequacy  of  nursing  supply  in  the 
context  of  a  surging  future  demand  driven  by 
population  ageing  and  the  shift  to  community 
care.  The  government  estimates  that  around 
51 000 new nursing staff will be needed by 2030 
compared  to  2023,  to  replace  retired  staff  and 
meet  additional  care  needs  due  to  population 
ageing  (461).  Improving  working  conditions  and 
training  opportunities  for  health  professionals  are 
among  Austria’s  health  reform  priorities.  A  new 
specialty in general and family medicine is starting 
in  2026,  while  start-up  incentives  of  up  to  EUR 
100 000  will  be  available  to  attract  doctors  to 
unfilled SHI posts in underserved areas. Under the 
RRP,  Austria  implemented  measures  to  make 
primary  healthcare  more  attractive  to  GPs  and  to 
other  health  and  social  care  professionals,  and 
also  posted  150  community  nurses  nationwide. 
Additional measures for boosting nursing capacity 
include  training  allowances  and  scholarships  to 
attract  new  entrants  and  people  wanting  to 
change  careers  to  the  nursing  profession,  as  well 
as  measures  to  accelerate  the  recognition  of 
foreign  qualifications.  A  monitoring  tool  is  being 
developed  to  precise  health  workforce  shortages 
and  plan  health  workforce  capacities  across  the 
country. 

Austria  has  been  investing  consistently  in 
digital  technologies  for  health,  yet  their 
uptake  is  rather  slow.  Austria  is  among  the 
leading  EU  countries  for  capital  investment  in 
infrastructure.  Since  2015,  the 
digital  health 
in  EUR 
invested  annually,  expressed 
amount 
million per 100 000 population, has been three to 
four  times  the  EU  average.  Despite  the  above-
average overall technical deployment of electronic 
health  records  in  Austria  (see  Annex  7),  their  use 
by  the  public  is  comparatively  low.  In  2024,  the 
share  of  people  accessing  their  personal  health 
records  online  was  below 
the  EU  average. 
Furthermore,  the  share  of  the  population  using 
online health services (excluding phone) instead of 
in-person  consultations  was  among  the  lowest  in 
the  EU.  The  2024-2028  health  reform  package 
aims  to  boost  the  digital  transformation  of  the 
health sector, earmarking EUR 51 million annually 
to  implement  a  range  of  measures  including  (i) 
offering  appointment-booking  services  via  the 

(461) GÖG (2023). Pflegepersonalbedarfsprognose Update bis 

private 

providers, 

national  health  hotline  1450;  (ii)  establishing 
digital  services  (for  example,  video  consultations) 
as  first  line  of  patient  contact  with  the  health 
system; (iii) making it obligatory for all outpatient 
care 
non-SHI-
including 
contracted  doctors,  to  use  the  national  electronic 
health  record  system  (ELGA)  from  2026  onwards; 
and  (iv)  setting  up  a  platform  for  the  secondary 
use  of  health  data  (462).  In  addition,  Austria’s  RRP 
includes  investments  to  develop  an  ‘electronic 
parent  child  pass  platform’,  which  consists  of 
electronic  documentation  and  a  communication 
platform  for  simplified  access  to  test  results  for 
healthcare  practitioners  and  parents,  in  particular 
from  socially  disadvantaged  families.  Moreover, 
Austria  participates  in  joint  actions  and  benefits 
from direct grants under EU4Health, which aim to 
improve  the  semantic  interoperability  of  health 
data  and  facilitate  the  implementation  of  the 
European  Health Data  Space.  The  achievement  of 
these  measures  could  improve  the  access  to  and 
cost-effectiveness  of  healthcare  services,  which 
could contribute to addressing the 2025 CSR. 

sector 

pharmaceutical 

holds 
Austria’s 
considerable  economic  importance.  The  share 
of  employment  in  pharmaceutical  manufacturing 
is  higher  than  the  EU  average.  Clinical  research 
capacity  is  strong  and,  in  2024,  the  number  of 
clinical  trials  per  million  population  in  Austria 
(22.8)  was  above  the  EU  average  of  18.3  (463). 
Investment 
in  research  and  development  by 
Austria’s  pharmaceutical  industry  has  increased 
since the onset of the COVID-19 pandemic (464). In 
2024, 
the  number  of  patents  granted  for 
pharmaceuticals  per  million  population  in  Austria 
(1.7) was on a par with the EU average (1.8) (465). 
Regarding  trade  and  commercialisation,  in  2025 
the  share  of  exports  to  non-EU  countries  from 
Austria’s  pharmaceutical  industry  (13.2%)  was 
close to the EU average (13.9%). 

(462) This typically refers to the reuse of health data for research, 
innovation, public health, policymaking and personalised 
medicine. 

(463) US National Library of Medicine, https://clinicaltrials.gov. 

(464) The Pharmaceutical Industry in Figures, EFPIA (European 

Federation of Pharmaceutical Industries and Associations). 

2050 (Care staff demand forecast for Austria).  

(465) European Patent Office: Statistics & Trends Centre | epo.org.  

117 

 
 
 
ANNEX 16: HOUSING 

Austria  has  a  strong  affordable  rental 
sector,  yet  there  are  relevant  regional  and 
sectoral  differences.  Austria  has  the  second-
highest  tenancy  rate  in  the  EU  with  45%  of  the 
population.  Social  housing  (including  municipal, 
limited-profit  and  cooperative  housing)  makes  up 
24% of the total housing stock and is accessible to 
both  low-  and  middle-income  households.  Vienna 
is the region with the highest  proportion  of rental 
housing  with  78%  (466),  about  half  of  which  is 
social housing. While rents in the capital region are 
slightly  above  the  national  average,  they  are 
highest  in  the  Alpine  regions.  Furthermore,  new 
rental  contracts  are  more  expensive  than  existing 
ones,  especially  in  the  private  rental  market.  The 
increasing  proportion  of  more  expensive  fixed-
term contracts make rents even less affordable. 

After  increasing  sharply  until  2022,  house 
prices  have  fallen  slightly,  while  the  supply 
of  new  housing  is  stagnating.  House  prices 
have increased over the last decade, but this trend 
halted in 2022. While the housing stock has been 
increasing slightly over the past years, the number 
of  completed  constructions  decreased  by  27% 
between  2021  and  2024  (467).  Similarly,  the 
number  of  building  permits  issued  has  halved 
since 2021. 

Housing market developments 

House  prices  in  Austria  halted  their  strong 
increase in 2022 but rents continued to rise, 
particularly  for  new  contracts.  House  prices 
had  been 
increasing  strongly  since  2010, 
outpacing  both  inflation  and  house  prices  in  the 
EU.  However,  in  2022,  rising  interest  rates  led  to 
reduced demand for housing purchases, with sales 
and prices eventually falling in 2023 and 2024. In 
2025,  house  prices  started  to  recover,  growing  at 
2.6%  year-on-year,  without  regaining  their  pre-
2022  growth  rates.  The  price-to-income  ratio  is 
still 35% above its 2010 level, among the highest 
increases  in  the  EU.  House  and  flat  prices  per 
square  metre  are  highest  in  Vienna,  Vorarlberg, 
Tyrol and Salzburg (see Annex 19). Average rental 

(466) Statistik Austria, Mikrozensus Wohnen 2024, 

https://www.statistik.at/fileadmin/publications/Wohnen_2024
_Web-barrierefrei.pdf.  

prices (including existing and new rental contracts) 
increased  more  slowly  than  house  prices,  as 
existing  rental  contracts,  sometimes  concluded 
decades  ago,  keep  the  average  down.  In  2024, 
rental contracts concluded less than two years ago 
were 86% more expensive per square metre than 
old  rental  contracts  concluded  over  30  years  ago 
(468).  Long-term  rental  contracts  are  common  in 
Austria, with 11% of rental contracts having been 
concluded more than 30 years ago. The proportion 
of relatively expensive fixed-term contracts is high 
among  new  contracts.  Such  new  rental  contracts 
are  putting  pressure  on  new  entrants  in  the 
housing  market,  many  of  whom  have  modest 
economic means, e.g. students, young families and 
recent immigrants. 

Graph A16.1: House prices, rents and price-to-
income evolution in IT and EU27 since 2005 

Source: Eurostat 

Construction  activity  has  dropped  sharply 
since  2022  while  construction  costs  have 
been  rising.  Having  declined  by  over  50%  since 
2021, building permits dropped to the lowest level 
of  the  past  20  years  in  2025  (see  Graph  A16.2). 
Investment  in  dwellings  as  a  percentage  of  GDP 
has  been  rising  steadily  since  2011  and  has 
exceeded the EU average since 2013. It peaked at 
6.7% in 2022 before decreasing to 5.3% in 2025 
as  housing  demand  was  negatively  affected  by 
the  strong  increase  in  construction  costs  since 
2021  and  the  increase  in  financing  costs  since 
2022.  Producer  prices  for  residential  buildings 
increased  by  33%  between  2020  and  2023.  This 
increase  was  partially  driven  by  the  increase  in 
input  costs,  as  reflected  by  the  22%  increase  in 

(468) https://www.statistik.at/statistiken/bevoelkerung-und-

(467) https://oenb.shinyapps.io/wohnimmobilien_dashboard/.  

soziales/wohnen/wohnkosten 

118 

751001251501752002252502750507091113151719212325Index (2005 = 100)Nominal prices ATNominal prices EU27Rental prices ATRental prices EU27Price-to-income ratio ATPrice-to-income ratio EU27 
 
 
     
 
 
 
the  construction  costs  index.  However,  declining 
productivity  and  contractors’  rising  profit  margins 
also  play  a  role.  Labour  productivity  per  hour 
worked  in  construction  has  been  falling  since 
2005.  Moreover,  demanding  –  but  not  legally 
binding – common market practice for construction 
(anerkannte Regeln der Technik) is driving up costs 
(469). 
prevent 
construction  companies  from  departing  from 
established  technical  standards,  even  when  some 
of  those  standards  merely  serve  comfort-related 
purposes like noise reduction.  

requirements 

Compliance 

Graph A16.2: House supply indicators in AT since 
2005 

Source: Eurostat 

Demand  for  purchasing  housing  fell  steeply 
in  2022  and  2023  amid  rising  interest  rates 
but  showed  signs  of  recovery  in  2025.  New 
housing  loans  as  a  percentage  of  GDP  dropped 
from  7%  in  2021  to  2.3%  in  2023.  This  drop  is 
more pronounced than in the euro area. One factor 
contributing  to  the  decline  in  housing  loans  was 
the introduction of a mortgage regulation (the KIM 
Regulation) in early 2022 that limited the loan-to-
collateral ratio to 90% and mortgage payments to 
40%  of  household  income.  The  regulation  expired 
in  July  2025,  contributing  to  the  recovery.  The 
market  saturation  in  some  pricier  segments  may 
also  have  played  a  role  in  dampening  demand 
after  years  of  strong  investment.  The  drop  in 
demand  helps  to  explain  the  sudden  halt  in  the 
rise of house prices (see Graph A16.1). 

Graph A16.3: Borrowing costs and housing loans, in 
AT and EA since 2018 

Source: Eurostat 

Structural policies 

Austria has a dedicated legal framework for 
limited-profit housing, which is the basis for 
its  regulated  rental  market  and  contributes 
to  affordable  rents.  The  Limited-Profit  Housing 
Act from 1979 is the basis on which 182 limited-
profit  housing  associations 
let  and  manage 
(470).  These  housing 
997 000  housing  units 
associations  must  set  rents  on  a  cost  basis  and 
have  to  reinvest  their  profits.  Thus,  limited-profit 
housing brings down average rent prices and there 
is  evidence  that  it  also  has  a  price-dampening 
effect  on  the  private  rental  market  (471).  Limited-
profit housing can also benefit from special zoning 
criteria.  Vienna  has  introduced  a  zoning  code  for 
social and limited-profit housing that applies to all 
newly  zoned  buildable  land  of  at  least  5 000 m². 
On  this  land,  two  thirds  of  the  newly  built  living 
area  should  provide  affordable  housing.  The 
objective  is  to  counter  excessive  growth  in  land 
prices  and  ensure 
that  sufficient  area  for 
affordable housing is available. 

A  housing  and  construction  package  was 
adopted  in  2024  to  create  more  affordable 
through  new  construction  and 
housing 

(470)https://www.bmwet.gv.at/Themen/KulturellesErbe/Wohnungsp

olitik.html?utm.  

(471) The Price-Dampening Effect of Non-profit Housing, Austrian 

(469) Übersicht Gebäudetyp E: Pro und Kontra der Einfach-Bau-

Initiative | bauingenieur24. 

Economic Research Institute (WIFO), 2023, 
https://www.wifo.ac.at/en/publication/48877/.  

119 

012345675070901101301501701902100507091113151719212325% of GDPIndex (2005 = 100)Residential building permits in m2, indexResidential buildings producer prices, indexInvestment in dwellings (right-hand side axis)01234567891819202122232425in % (interest rates) or in % of GDP (loans)Interest rates ATInterest rates EAPure new loans ATPure new loans EA 
     
 
     
 
renovation.  It  is  expected  to  mobilise  more 
than EUR 2 billion in investment for the creation of 
new affordable housing, renovation and economic 
recovery.  It  includes  a  budget  of  EUR 1  billion  to 
support the construction of 20 000 new residential 
units and the renovation of 5 000 residential units. 
The  package  aims 
to  counteract  declining 
investment in construction and to offset the rise in 
housing costs. 

A  new  package  of  rental  law  reforms  was 
adopted in 2025 to improve affordability and 
stability  in  the  rental  market.  The  Mietpaket 
includes extending existing rent caps on regulated 
rents  (municipal  and  cooperative  housing)  and 
extending  them  to  parts  of  the  private  rental 
market  (472).  For  the  affected  private  rents,  if 
annual  inflation  exceeds  3%,  only  half  of  the 
amount  above  3%  may  be  passed  on  to  tenants. 
Rent increases in the regulated sector are capped 
at  1%  in  2026,  2%  in  2027  and  will  follow  the 
same rule as in the unregulated sector from 2028. 
Rents  may  be  increased  only  once  per  year,  and 
minimum  lease  terms  have  been  extended  from 
three to five years. The aim of the measures is to 
offset  the  strong  increase  in  rents  in  the  past 
decade  and 
to  offer  more  stability  and 
predictability  to  tenants.  While  these  measures 
might  lower  rent  increases  and  lead  to  more 
certainty  for  tenants,  they  could  also  weigh  on 
supply  and  increase  the  gap  between  new  and 
the 
existing 
measures leave structural disparities of the rental 
market  untouched.  Single  and  two-unit  houses 
remain unregulated, especially affecting tenants in 
rural  areas.  A  structured  harmonisation  of 
regulations  in  the  private  rental  market  could 
provide more legal parity for all rental agreements 
while maintaining existing tenant protection. 

contracts.  Furthermore, 

rental 

The current Austrian government highlighted 
housing affordability as one of its priorities, 
and  plans  both  supply-  and  demand-side 
the  2025-2029  government 
measures. 
programme, living costs and housing affordability, 
in  particular,  are  among 
the  government’s 
priorities  (473).  The  aim  of  these  priorities  is  to 
strengthen the construction and renovation sector 

In 

for  affordable  housing  by  simplifying  building 
regulations  and digitalising  permitting procedures. 
A sustainable land-use policy focuses on using the 
existing  stock  of  buildings  and  land  to  limit  new 
soil sealing and reduce vacancy rates while aiming 
to ensure that publicly owned land remains public. 
Further  plans  include  supporting  limited-profit 
housing, for both rental and ownership, using new 
models such as renting with a purchase option and 
the 
reintroducing 
Wohnbauförderung  for  affordable  housing.  This 
contribution  by  employers  and  employees  initially 
supported  affordable  housing  construction  and 
maintenance,  but  earmarking  was  stopped  in 
2008.  Reintroducing  it  would  support  housing 
associations and increase financial predictability. 

earmarking 

the 

of 

jobseekers 

Regional  differences  in  the  availability  of 
affordable housing influence labour mobility. 
The  concentration  of 
in  Vienna 
contrasts  with  unfilled  vacancies  in  the  western 
federal  states  (474).  In  2024,  the  unemployment 
rate  gap  between  federal  states  was  4.3%. 
Differences  in  housing  markets  contribute  to  this 
(see  Annex  11).  Vienna  has  an 
imbalance 
extensive social housing supply, while in the west, 
the  subsidised  housing  stock  is  smaller  and  rents 
are  higher  overall.  This  creates  lock-in  effects, 
making it difficult for jobseekers (especially those 
in  lower  income  households)  to  relocate.  The 
federal  government 
to 
support cross-regional job placement and improve 
public services in the western regions. 

introduced  measures 

Some  local  authorities  in  touristic  regions 
face  higher-than-average  vacancy  rates  and 
have introduced measures to regulate vacant 
dwellings  and  secondary  homes.  The  regions 
with  the  highest  proportion  of  dwellings  without 
registered  residents  are  the  traditionally  touristic 
regions  of  Carinthia  (16.2%),  Tyrol  (15.9%)  and 
Salzburg 
(14.9%)  compared  with  a  national 
average  of  13.3%  (475),  which  suggests  the 
presence of holiday homes. While tourism plays a 
large  role  in  these  areas’  economies,  Tyrol  and 
Salzburg  are  also  among  the  regions  with  the 
highest house and rent prices in the country. Some 
authorities,  such  as  the  city  of  Salzburg  and  the 

(472) https://www.bmwkms.gv.at/themen/aktuell/mietpaket-

(474) OECD, Addressing Regional Labour Market Imbalances in 

beschlossen0.html.  

Austria, 2025. 

(473) Regierungsprogramm 2025-2029, 

(475) Statistik Austria, Mikrozensus Wohnen 2024, 

https://www.bundeskanzleramt.gv.at/bundeskanzleramt/die-
bundesregierung/regierungsdokumente.html.    

https://www.statistik.at/fileadmin/publications/Wohnen_2024
_Web-barrierefrei.pdf. 

120 

 
 
 
state  of  Tyrol,  have 
to 
disincentivise secondary and vacant homes or use 
specific  zoning  to  restrict  holiday  and  secondary 
homes. 

introduced 

taxes 

federal 

states,  a 

The  Austrian  government  reacted  to  the 
increases 
costs  by 
in  housing-related 
launching a housing support programme. Next 
to existing anti-eviction measures implemented by 
the 
federal  programme 
(Wohnschirm) was started in 2022 with three main 
pillars:  preventing  evictions,  avoiding  energy  cut-
offs  and  ending  homelessness.  The  programme 
was  deemed  successful  and  effective  overall,  as 
beneficiaries predominantly came from vulnerable 
households,  with  73%  being  from  households 
where  people  are  at  risk  of  poverty  or  social 
exclusion  and  44%  being  from  single-parent 
households  (476).  However,  as  the  programme 
provided  a  one-off  payment  under  the  anti-
eviction  pillar,  the  underlying  challenge  of  rising 
rental  costs  has  not  been  resolved  and  therefore 
leaves scope for additional long-term measures. In 
contrast, the ending homelessness pillar is a long-
term  project  that  applies  the  Housing  First 
principle  by  covering  up-front  payments  such  as 
deposits,  and  providing  support  by  social  workers 
before, during and after the search for housing. 

Vulnerable groups 

on 

and 

tenants 

Although  housing  affordability  pressure  in 
Austria  remains  comparatively  contained,  it 
low-income 
weighs 
households.  While  the  housing  cost  overburden 
rate,  at  6.5%  was  below the  EU  average  of  7.7% 
in  2025  (477),  households  with  lower  incomes,  in 
particular,  struggle  with  housing  affordability.  The 
housing cost overburden rate among people below 
the poverty threshold is 33.4%, which is over five 
times  higher  than  in  the  general  population  and 
also above the EU average of 29.1%. People within 
this  group  spent  on  average  39.7%  of  their 
disposable  income  on  rent,  slightly  above  the  EU 

(476) Bundesministerium für Soziales, Gesundheit, Pflege und 
Konsumentenschutz (BMSGPK) (Hg.); Endbericht zur 
begleitenden Evaluierung des Programms Wohnschirm, 
2024. 

(477) The overburden rate should be read together with the tenure 
structure (homeowner, tenants), that may differ across 
country and regions.   

average of 36.6%. Significant differences can also 
be  observed  according  to  rental  status.  While 
15.6%  of  tenants  renting  at  market  price  were 
overburdened in 2025, only 4.2% of those renting 
at  reduced  prices  were  affected,  reflecting  the 
importance  of  subsidised  housing  in  alleviating 
financial  pressure  for  lower-income  segments. 
Single-person  households  and 
single-parent 
households with dependent children struggle more 
frequently  with  housing  affordability.  The  degree 
of  urbanisation  also  influences  housing  costs.  In 
2025,  11.4%  of  people  living  in  cities  were 
overburdened vs only 4.5% of those in rural areas. 
The difference is more pronounced compared with 
the  EU  average  (9.6%  in  cities  vs  5.6%  in  rural 
areas) and can be explained by the high proportion 
of  tenants  in  Austria  that  live  predominantly  in 
larger cities. 

Arrears  on  mortgages,  among  those  below 
the  poverty  threshold  rent  and  utility  bills 
doubled  between  2022  and  2024.  Rising 
housing-related  costs  (e.g.  housing,  water  and 
energy)  have  been  accompanied  by  increases  in 
related  arrears.  While  the  EU  average  remained 
broadly  constant in 2024, at 9.2%, the proportion 
of arrears in Austria increased from 4.7% in 2022 
to  7.5%  in  2024.  Among  those  living  below  the 
poverty  threshold,  arrears  doubled  between  2022 
and 2024 from 10.3% to 20.6% (similar to the EU 
average),  further  pointing  to  the  stronger  impact 
those 
of 
households’ incomes. 

inflationary  price 

increases  on 

in  Austria 

Although  housing  quality 
is 
generally  good,  severe  housing  deprivation 
has  surpassed  the  EU  average.  Austria  had  a 
low  and  decreasing  proportion  of  people  living  in 
overcrowded homes (13.7%) in 2024 (EU average: 
16.9%).  The  proportion  of  people  living  in  a 
dwelling with structural deficiencies, although low, 
has  been  slowly  increasing  since  2020.  On  the 
back  of 
this  development,  severe  housing 
deprivation  has  increased  from  3%  in  2020  to 
4.5% in 2024 and now exceeds the EU average of 
4%.  It  disproportionally  affects  people  below  the 
poverty  threshold  (14.2%  vs  9.9%  at  EU  level), 
tenants  (11%)  and  people  living  in  bigger  cities 
(13.9%). 

The number of people registered as homeless 
continues  to  be  low  but  differs  significantly 
by region and has increased slightly in recent 
years. 
registered 
homeless  people  reached  20 573  (0.11%  of  the 

the  number  of 

In  2023, 

121 

 
 
Graph A16.4: Housing affordability selected indicators 

Source: Eurostat and European Commission calculations. The overburden rate should be read together with the tenure structure 
(homeowner, tenants), that may differ across country and regions. 

total  population).  That  figure  has  increased  by 
5.5%  since  2021  but  remained  well  below  the 
record highs in 2013 (478). Of those people, 12 021 
were 
emergency 
accommodation.  Regional  differences  are  stark, 
with  more  than  half  of  all  people  registered  as 
homeless residing in Vienna. 

registered 

living 

as 

in 

(478) Statistik Austria, Kennzahlen zu registrierter Obdach- und 

Wohnungslosigkeit 2023, 2024.  

122 

 
 
 
HORIZONTAL 
ANNEX 17: SUSTAINABLE DEVELOPMENT GOALS 

E
C
E

This  annex  assesses  Austria’s  progress  on 
the  sustainable  development  goals  (SDGs) 
along  the  dimensions  of  competitiveness, 
sustainability,  social  fairness.  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 
the EU. 

on  most  SDGs 

Austria  performs  well  and  continues  to 
to 
improve 
competitiveness (SDGs 8 and 9). It is likewise 
improving  on  productivity-related  indicators 
that  form  part  of  quality  education  (SDG 4). 

related 

Austria  performs  well  on  most  indicators  for 
SDG 8  (Decent  work  and  economic  growth)  and 
SDG 9  (Industry,  innovation  and  infrastructure). 
With 3.26% of GDP allocated to R&D in 2024, up 
from  3.14%  in  2019,  Austria  has  one  of  the 
highest  levels  of  R&D  spending  in  the  EU.  The 
investment  share  stood  at  23.6%  in  2024  and 
thus remained above the EU average of 21.6%. At 
the same time, the share of young people neither 
in  employment  nor  in  education  increased  to 
10.3%  in  2025,  up  from  8.6%  in  2019  and  has 
come  closer  to  the  EU  average  of  11%.  Austria’s 
recovery and resilience plan (RRP) contains several 
measures  to  enable  digitalisation  and  make 
significant  investments  in  strategic  research  and 
innovation, which will help ensure further progress 
(Quality 
on 
education),  Austria 
adult 
participation in learning, with a share of 16.1% in 
2025  compared  to  the  EU  average  of13.7%  and 
with  respect  to  the  percentage  of  adults  with  at 
least basic digital skills (69.8% in Austria in 2025 

these  SDGs.  Regarding  SDG  4 

outperforms 

on 

Graph A17.1: Progress towards the SDGs in Austria 

For a detailed progress assessment towards the various SDGs, see the annual Eurostat report ‘Sustainable development in the 
European Union’; for extensive data on the short-term SDG progress of EU countries, see Key findings – Sustainable development 
indicators; for an interactive visualization of SDG progress of EU countries, see SDG country overview. 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 five or six 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 29 April 2026. Data refer mainly to the period 2019-2024 or 2019-2025. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

123 

 
 
 
 
 
 
 
leavers 

from  education  and 

2025),  but  stays  beneath  the  EU  average  of 
44.8%  with  the  gap  widening.  The  percentage  of 
early 
training 
increased  significantly  from  7.8%  in  2019  to 
10.0% in 2025 and now lies above the EU average 
of  9.1%,  illustrating  a  need  for  improvement  in 
ensuring  equal  opportunities 
in  education, 
particularly for disadvantaged young people. Ways 
to address this are supported by several measures 
in  the  Austrian  RRP  targeted  at:  (i)  access  to 
education, 
(ii) 
training  and  upskilling;  and 
assistance for socially disadvantaged women. 

Overall,  Austria  performs  well  on  SDGs 
related  to  macroeconomic  stability  (SDGs 8 
and  16).  The  employment  rate  rose  from  76.8% 
in  2019  to  77.6%  in  2025,  above  the  76.1%  EU 
average.  In  addition,  Austria  achieves  relatively 
high scores on indicators measuring peace, justice 
and  strong  institutions  (SDG 16),  showing  that 
there  is  a  stable  and  predictable  environment  for 
doing business. The RRP includes several targeted 
measures  to  improve  the  sustainability  of  the 
pension system and the quality of public spending, 
is  therefore  expected  to  also 
and  the  plan 
contribute  to  some  extent  to  Austria’s  long-term 
macroeconomic stability. 

However,  Austria  needs  to  catch  up  on 
partnerships  for  the  goals  (SDG 17).  Austria 
showed  progress  on  this,  but  it  is  still  performing 
poorly compared to the EU average, particularly on 
official development assistance. The percentage of 
households  with  a  high-speed  internet  connection 
also  still  lags  the  EU  average,  but  improved  at  a 
rapid pace from 13.8% in 2019 to 72.2% in 2024 
(see also Annex 19). 

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

compared to the EU average of 60.4%).  

Austria is improving on most SDGs related to 
sustainability  (SDGs 2,  6,  7,  9,  11,  12,  13), 
but it needs to catch up with the EU average 
on  several  of  these  (SDGs 2,  7  and  13). 
Historically, Austria has performed very well on the 
share of renewable energy in its gross final energy 
consumption.  It  was  able  to  further  increase  this 
share from 33.8% in 2019 to 43.0% in 2024, well 
above  the  EU  average  (25.2%).  Final  energy 
consumption in households per capita has slightly 
in  Austria,  showing  a 
increased  since  2019 
different trend compared to the EU average, and is 
still significantly higher than on average in the EU. 
Various  measures  in  the  RRP  aim  to  further  save 
general  greenhouse  gas  emissions  and  should 
support  Austria’s  environmental  sustainability. 
These measures include the eco-social tax reform, 
the  Renewables  Expansion  Act,  and  investment  in 
zero-emission 
renewables,  energy  efficiency, 
mobility  and  biodiversity.  Both  the  biodiversity 
fund  and  the  biodiversity  strategy  published  as 
part  of  the  Austrian  RRP  will  also  help  meet  the 
country’s SDG 15 (Life on Land) aims. 

The  picture  on  SDGs  related  to  social 
fairness  (SDGs 1,  3,  4,  5,  7,  8,  10)  is  more 
mixed  than  before.  Austria performs well on 
SDGs 1,  4  and  8,  but  is  moving  away  from 
SDG  1  (No  poverty)  and  SDG 3  (Good  health 
and  well-being)  on  several  indicators  and 
needs  to  catch  up  to  the  EU  average  on 
SDGs 3,  5,  7  and  10.  The  percentage  of  people 
who  perceive  their  health  as  good  or  very  good 
continued to decrease faster than the EU average 
rate (SDG 3; 67.7% in 2024 compared to 71.3% in 
2019  and  an  EU  average of  68.5% in  2024).  The 
share  of  persons  at  risk  of  poverty  of  exclusion 
(SDG  1)  increased  to  16.9%  in  2024,  up  from 
16.5% in 2019, while the average share in the EU 
came down to 21% in 2024 (from 21.8% in 2019). 
The  long-term  unemployment  rate  is  improving 
(SDG 8;  1.3%  in  2025  against  1.4%  in  2019,  but 
at  a  slower  rate  than  the  EU  average  which 
decreased from 2.7% to 1.9%). 

On  SDG 4 
(Quality  education),  Austria 
increased  the  participation  rate  in  early 
childhood  education  for  children  aged  three 
and  over  to  90.7%  in  2024,  but  remains 
below the EU average of 95%. The percentage 
of adults with a tertiary qualification has increased 
compared  to  2019  (from  41.6%  to  43.7%  in 

124 

 
ANNEX 18: COMPETITIVE REGIONS 

Regional development trends 

1%), which are comparable to the Austrian and EU 
average of 0.8 and 0.7%, respectively. 

Map A18.1:  GDP per head compared with the EU 
average. 

Regional disparities in Austria have narrowed 
due  to  the  stable  performance  of  most 
regions  paired  with  the  relative  decline  of 
Wien.  The  country’s  development  model 
is 
underpinned by a robust manufacturing base with 
innovation-driven  services  economy. 
a  highly 
However, 
its  relative  position  within  the  EU 
declined  moderately  from  about  129%  of  the  EU 
average in 2004 to around 118% in 2024. At the 
same  time,  regional  disparities  in  Austria  have 
narrowed,  with  the  gap  between  the  best-  and 
worst-performing federal states falling from about 
83  percentage  points  in  2004  to  roughly  58 
percentage points in 2024. 

This  convergence,  however,  was  driven 
mainly by a pronounced decline in the capital 
region  combined  with  stable  performance 
elsewhere,  rather  than  by  a  strong  catch-up 
of  below-average  performing  regions.  Wien 
remained the clear economic leader until the mid-
2010s and well above the EU average, but its GDP 
per head fell from 170% of the EU level  in 2004 
to  about  135%  in  2024,  surpassed  by  Salzburg 
(144%). By contrast, performance in the remaining 
regions  was  broadly  stable,  with  western  regions, 
particularly  Salzburg,  Tirol,  Vorarlberg  and 
Oberösterreich,  continuing  to  perform  strongly, 
broadly in line with or above the national average, 
while  eastern  and  southern  regions  remained 
closer 
(Niederösterreich, 
Steiermark  and  Kärnten)  or  below  it  (Burgenland, 
with 84%). 

the  EU  average 

to 

regions 

Productivity  growth  has  been  lower  in  the 
eastern  and  southern  regions  over  the  last 
decade.  Although  regional  productivity 
levels 
they  vary 
remain  high  by  EU  standards, 
considerably.  Western 
and  Wien 
consistently  outperform  the  rest  of  the  country. 
Labour productivity in 2023 ranged from 130% in 
Vorarlberg  to  99%  in  Burgenland,  making  it  the 
only region below the EU average. Differences are 
also reflected in annual growth of productivity per 
hour worked between 2013 and 2023: the western 
regions  of  Salzburg  and  Kärnten  performed  the 
strongest 
(1.5-1.8%),  while  Wien  and  some 
southern  and  eastern  regions  (Steiermark  and 
Niederösterreich),  as  well  as  Oberösterreich  and 
Vorarlberg  saw  more  moderate  growth  (below 

2021-2023 average GDP per head in purchasing power 
standard compared with the EU average. 
Source: Commission calculations based on Eurostat 16 July 
2025 data 

Graph A18.1: Productivity per hour worked: growth 
and level, NUTS 2 

Source: Calculations by the Directorate-General for Regional 
and Urban Policy (REGIO) based on Joint Research Centre 
(JRC) (ARDECO) and Eurostat data 

125 

0.70.81.81.51.11.10.90.80.80.60.410011811712699116130106112119127EUAustriaKärntenSalzburgBurgenlandTirolVorarlbergSteiermarkNiederösterreichOberösterreichWienAverage annual growth2013-2023 (%)Productivity in 2023GDP/hour, EU27 = 100 
 
 
 
 
 
  
  
 
 
Key challenges for regional 
competitiveness 

R&D  expenditure  is  particularly  low  in  the 
country’s  less  developed  regions  but  also  in 
Salzburg,  despite  its  high  GDP  per  head. 
Niederösterreich  and  Burgenland,  whose  GDP  per 
head (in purchasing power standard, PPS) is below 

the EU average, have low R&D expenditure levels. 
Salzburg  and  Vorarlberg  also  remain  significantly 
below  both  the  national  and  the  EU  averages 
(2.2%  against  1.6%  and  1.9%,  respectively) 
despite Salzburg having the highest GDP per head. 
The  regional  differences  are  very  significant  as 
Austria  is  one  of  the  most  research-intensive 
countries  in  the  EU  (see  Annex  4).  Steiermark 
stands out  with 5.3% of GDP in R&D  expenditure. 
Closing  the  science-to-market  gap  remains  a 
major challenge for many regions in Austria. While 

Table A18.1: Main development trends, challenges and the concentration of resources 

Source: European Commission based on Eurostat data; categories of regions based on Map A18.1 

126 

Main development trendsTransition regions (population: 2 million)Burgenland and Niederösterreich face specific structural challenges. According to 2021-2023 data, both remain below the EU average of GDP per head (Burgenland at 84% and Niederösterreich at 98%), reflecting prolonged periods of subdued growth and weaker local value creation. Niederösterreich’s GDP per head growth was consistently below the EU average, particularly in the commuter belt around Wien. Both regions have a high number of commuters. Burgenland continues to struggle with the lowest labour productivity in Austria (97% of the EU average) and a smaller, less diversified economic base.  These weaknesses reflect Austria’s broader north-west/south-east divide, where high-productivity and highly innovative regions in the north and west contrast with more moderate productivity and innovation performance in the south and east.More developed regions (population: 7.2 million)All of Austria’s regions are more developed regions, except Niederösterreich and Burgenland. The more developed regions have a strong economic performance overall, yet they differ significantly, reflecting a pronounced east–west divide. Western regions benefit from highly productive economies and some of the strongest real GDP growth in the country. Eastern and central regions, including Wien and Steiermark, also remain well above the EU average in GDP per head, but several have experienced slower GDP per head growth, with Wien experiencing a slight decline. Innovation capacity is highly concentrated in the capital and its commuter zone, while other regions combine solid performance with more stable, less dynamic development patterns. These internal differences highlight the varied economic structures and growth trajectories within Austria’s more developed regions.Specific territoriesDiverging transport and social challenges in urban and rural areas are becoming more pronounced. Urban areas face mounting pressure to reduce transport emissions despite high travel demand, congestion, and limited space for new infrastructure. Growing populations, housing shortages, and rising living costs strain developed public services and increase the risks of poverty, social exclusion and declining environmental quality. These dynamics threaten social cohesion and could reduce the attractiveness of cities, especially for low-income households and young people. Rural areas experience more structural mobility barriers, with a strong dependence on private cars, limited public transport and insufficient electric vehicle charging networks. Persistent gaps in access to essential services – such as education and healthcare – are intensified by longer distances and low population density. Although rural regions often benefit from more affordable housing and better living conditions, poor physical and digital connectivity restricts access to jobs and services and risk widening territorial inequalities if no targeted action is taken. The Austrian Just Transition Fund regions in Oberösterreich, Steiermark and Niederösterreich face significant decarbonisation challenges due to their reliance on fossil fuels and energy-intensive industries. They have a high share of employment in polluting sectors, making them particularly vulnerable to economic and labour-market impacts of the green transition. The strong role of manufacturing and carbon-intensive industries, along with transport dependencies, further complicates these regions’ paths to climate neutrality. 
 
  
 
differing  mobility 
dependencies, 
variations. 

patterns 
further  contribute 

and 

to 

transport 
regional 

Peripheral  Alpine  and  border  regions  suffer 
is  putting 
from  demographic  decline.  This 
increasing  pressure  on  social  cohesion, 
local 
services  and  residents’  ability  to  ’stay’  in  their 
regions. The country’s overall population growth is 
highly  concentrated  in  metropolitan  areas:  Wien, 
Graz,  Wiener  Umland  Nord-  and  Südteil,  Rheintal-
Bodenseegebiet and Linz–Wels continue to expand. 
By  contrast,  peripheral  rural  and  mountainous 
areas in  Steiermark, Kärnten and  Niederösterreich 
continue  to  experience  population  decline,  mainly 
due to low birth rates, reflecting a persistent rural-
to-urban shift (see Map A18.2). Several peripheral 
rural and Alpine regions in Steiermark, Kärnten and 
Burgenland  are  already  seeing  a  substantial 
decline  in  their  working-age  population  due  to 
ageing-in-place  processes  and  outward  migration 
of  young  adults.  In  this  context,  the  provision  of 
public  services  -  particularly  those  characterised 
by  strong  economies  of  scale  –  is  especially 
demanding in small municipalities, concentrated in 
rural  and  peripheral  areas.  In  Austria,  subnational 
entities,  municipalities  in  particular,  play  a  crucial 
role in delivering essential public services, such as 
healthcare, education and public transport (482). 

some regions effectively convert research capacity 
into  high-value  economic  output,  this  success  is 
largely  territorially  concentrated  in  a  few  urban 
areas (see Annex 6).  

The  drivers  behind  the  uneven  regional 
capacity  for 
innovation-led  growth  are 
manifold  and  include  disparities  in  human 
capital  and  industrial  specialisation.  Regional 
economic  structures  remain  highly  differentiated. 
in  regions  such  as 
Manufacturing  dominates 
Vorarlberg, 
and 
Kärnten 
Steiermark,  while  Wien  and  Salzburg  are  more 
highly  specialised in high-value  services, including 
ICT,  finance  and  business  services.  High-tech 
employment exceeds the EU  average in Wien and 
Kärnten  but  remains  below  the  EU  average  in 
other regions.  

Oberösterreich, 

face 

regions 

significant 

of  Oberösterreich 

industries (479).  Within 

The 
and 
challenges 
Steiermark 
related  to  decarbonisation  due  to  their 
strong  dependence  on  fossil  fuels  and 
energy-intensive  industries.  These  two  regions 
are  particularly  exposed  to  the  territorial  and 
labour  market  implications  of  Austria’s  green 
transition.  In  2021,  Südösterreich  had  the  highest 
share  of  employment  in  highly  polluting  sectors 
(17.4%)  closely 
followed  by  Westösterreich 
(17.2%)  and  then  Ostösterreich  (12.1%).  This  is 
aligned  with  the  geographical  concentration  of 
these 
carbon-intensive 
regions, Oberösterreich and Steiermark are among 
the most exposed  in Europe  due to high emission 
levels and a large share of employment in fossil-
fuel-dependent  and  energy-intensive  sectors (480). 
Alongside Niederösterreich, they also report higher 
greenhouse  gas  emissions,  exceeding  10 tCO₂eq 
per head, while Wien records only 2.2 tCO₂eq (see 
Annex  8).  Industry  plays  a  particularly  significant 
role 
regions’  emission  profiles: 
manufacturing  generated  about  38%  of  total 
greenhouse  gas  emissions  in  2023,  the  second-
highest  share  in  the  EU.  Energy-intensive  sectors, 
particularly  paper  and  basic  metals,  also  have 
higher 
EU 
intensity 
counterparts (481).  Additional  factors,  such  as 

in  Austrian 

carbon 

their 

than 

(479) Job Creation and Local Economic Development 2023: Austria 

(2023). 

(480) OECD (2024), OECD Economic Surveys: Austria 2024. 

(481) OECD (2024), OECD Economic Surveys: Austria 2024; 
European Commission (2025) Climate Action Progress 
Report 2024, Country profile: Austria. 

(482) See the 2024 Country Report, p. 4 and KDZ - Centre for 
Public Administration Research Austria (2021), Local 
Government in Austria: Responses to Urban-Rural Challenges. 

127 

 
 
 
Map A18.2:  Population change, NUTS 3, 2015-2024 

compared  with  a  national  average  of  29% (484). 
These differences shape mobility patterns in rural 
areas,  where  limited  public  transport  options  lead 
to  a  much  higher  dependence  on  private  cars. 
More  than  one  third  of  households  in  small  cities 
own more than one car, compared with just 9% in 
Wien (485).  Improving  access  to  public  transport  in 
rural  regions  could  therefore  play  a  substantial 
role  in  reducing greenhouse  gas  emissions  as the 
for  a  significant 
transport  sector  accounts 
proportion these emissions (around 30% in 2023) 
despite a decrease in 2023 (see Annex 8).  

Source: Eurostat 

Access to early childhood education and care 
remains  a  major  territorial  challenge  in 
Steiermark  and  Oberösterreich  and  drag 
their  growth  potential  down.  There  are  wide 
regional  disparities  in  availability,  quality  and 
affordability  of  early  childhood  education,  with 
rural  areas  most  affected.  Participation  in  early 
childhood education for children  under the age of 
three  clearly  illustrates  this  divide.  In  2024, 
participation in early childhood education and care 
(including  children  staying  with  childminders) 
under  the  age  of  three  was  highest  in  Wien 
(47.5%)  and  Burgenland  (44.8%),  and  lowest  in 
Steiermark 
Oberösterreich 
(26.7%) (483).  These  differences  have  a  direct 
impact  on  women’s  labour  market  participation 
and may result in hampering the growth potential 
of  some  of  the  regions  with  lower  levels  of  GDP 
per head (see Annex 13).  

(27.2%) 

and 

Access to public transport is severely limited 
outside  Wien,  especially  in  Burgenland  and 
Kärnten.  In  Wien,  over  70%  of  the  population 
uses  public  transport  daily  or  several  times  a 
week,  whereas  the  share  is  at  or  below  10%  in 
Kärnten and Burgenland. The share remains below 
in  Niederösterreich  and  Oberösterreich, 
20% 

(483) Statistik Austria (2025),  Statistik über die elementare 

Bildung und das Hortwesen 2024/25 - 
Kindertagesheimstatistik.  

(484) VCÖ, & Statistik Austria. (2021). Große Bundesland-

Unterschiede bei Nutzung des Öffentlichen Verkehrs.  

(485) OECD (2024), OECD Economic Surveys: Austria 2024. 

128 

 
 
 
 
 
 
Table A18.2:Key regional indicators (at NUTS 2 level) for Austria 

Dark green – the indicator is at least 120% or more of the EU average. 
Light green – the indicator is at least 100% but less than 120% of the EU average. 
Yellow – the indicator is at least 90% but less than 100% of the EU average. 
Light red – the indicator is at least 75% but less than 90% of the EU average. 
Dark red – the indicator is less than 75% of the EU average. 
This colour scale applies to ‘positive’ indicators where higher values are favourable. 
For ‘negative’ indicators (where higher values are unfavourable), the colours are reversed. 
Source: Eurostat and JRC 

the 

lowest 

recording 

Broadband  connectivity  is  very  low  in  most 
rural  areas  of  Austria.  Very  high  capacity 
network  (VHCN)  coverage  remains  below  the  EU 
level (68% compared with 79% in 2024), and rural 
coverage 
in  Europe, 
is  among  the  weakest 
reaching  only  36%  against  the  EU  average  of 
56% (486). Only nine regions exceed 65%, mostly in 
the  western  part  of  the  country,  with  the  south-
east 
VHCN 
coverage (487).  The  gap  in  internet  speed  between 
rural and urban areas is larger than in most other 
OECD countries. Broadband deployment remains a 
challenge  due  to  regulatory  and  administrative 
barriers  in  spatial  planning  and  permitting,  a  task 
primarily  managed  by  the  federal  states,  in 
cooperation  with  districts  and  municipalities. 
Insufficient  broadband  availability  –  especially  in 
constrains 
sparsely 
productivity  growth  and,  together  with  poor 
transport  connectivity,  further  widens  the  urban-
rural divide (see Annex 5).  

populated 

regions 

rural 

– 

is 

housing 

Affordable 
particularly 
challenging  in  Wien  and  Tiroler  Unterland. 
High  price-to-income  ratios  can  also  be  observed 
in  the  touristic  Alpine  regions  of  Vorarlberg,  Tirol 
and  Salzburg,  while  eastern  regions  such  as 
Burgenland,  Niederösterreich  and  Steiermark 
record  noticeably  lower  levels.  Urban  areas  face 
the  highest  housing  pressure:  12%  of  city 
residents  experience  housing  cost  overburden (488) 
(national 
compared  with  3% 
average: 6.3%, see Annex 16) (489). Touristic Alpine 
regions,  particularly 
in  Salzburg,  Tirol  and 
Vorarlberg,  often  deviate  from  this  urban–rural 
pattern  due  to  strong  demand  for  secondary 
residences  and  tourism-driven  housing  markets. 
These  persistent  affordability  pressures  place  a 
financial  burden  on  households 
tourism-
intensive  rural  areas,  negatively  impacting  the 
labour market and exacerbating social  tensions in 
major urban centres. 

in  rural  areas 

in 

(486) Österreichischer Raumentwicklungsatlas (2025), pp. 142–

143.  

(487) OMBIDA and Point Topic (2025), Broadband Coverage in 

Europe, 2024. 

(488) ‘Housing cost overburden’ is the share of the population with 
housing costs above 40% of the total disposable household 
income (net of housing allowances). 

(489)The overburden rate should be read together with the tenure 
structure (homeowner, tenants), that may differ across 
country and regions.  

129 

GDP per head (PPS, index)Net migrationReal GDP per head growthEmployed with high educational attainmentEmployment in knowledge-intensive servicesHuman resources in science and technology (core)Employment rate 20-64Unemployment rateAt-risk-of-poverty or social exclusion rate (AROPE)R&D expenditureEU27=100Average annual change per 1000 residentsAverage annual % change% of employed aged 25-64% of total employment% of total employment% of population aged 20-64% of labour force% of population% of GDP20242015-20242014-20242025202520252025202520242023EU1003.51.441.541.749.976.16.021.02.2Austria1197.20.541.742.253.577.65.716.93.3Burgenland868.91.039.045.153.376.95.010.00.8Niederösterreich987.50.540.543.053.279.54.412.41.8Wien13710.7-0.152.652.561.471.39.928.23.9Kärnten1105.31.140.839.251.176.84.815.73.2Steiermark1115.90.839.140.051.277.85.014.45.3Oberösterreich1196.20.138.536.950.980.34.615.03.5Salzburg1465.11.138.438.550.681.83.511.11.6Tirol1285.10.935.237.148.482.03.813.42.9Vorarlberg1256.10.235.635.249.079.94.317.91.9  
 
 
 
  
 
Map A18.3:  Housing affordability – price-to-
income ratio NUTS 3, 2020 

their  technical  potential,  particularly  for  smaller 
rooftop photovoltaics (490) (see Annexes 9 and 10). 

Land take, soil sealing and urban sprawl are 
persistent 
significant 
challenges  with 
regional  disparities.  Sealing  intensity  is  highest 
in Tirol, Vorarlberg and Wien, followed by Salzburg 
and  Oberösterreich (491).  Low  population  density 
and dispersed settlement patterns, combined with 
extensive  road  networks,  increase  reliance  on 
private  transport.  These  patterns  also  heighten 
climate  risks  as  many  built-up  areas  lie  in  flood-
prone  zones (492).  Planning  powers  lie  largely  with 
municipalities  and  federal  states,  while  flood 
protection and risk management are shared across 
government  levels,  limiting  the  integration  of  risk 
considerations into land-use decisions (493). Despite 
a  national  target  to  reduce  land  take  to  2.5 
hectares per day (494), actual levels remain around 
6.5  hectares (495),  driven  mainly  by  settlement 
areas  and  transport  infrastructure.  Land  take  and 
soil  sealing  continue  to  pose  structural  risks  to 
biodiversity, 
climate 
climate 
adaptation,  despite 
the  newly  adopted  soil 
strategy seeking better alignment between spatial 
planning and environmental objectives.  

resilience  and 

(490) BMWET (2025), Wie steht es um Photovoltaik in den 

Bundesländern?  

(491) ÖROK (2022): Atlas. 

(492) OECD Ecoscope article (2024): Addressing Austria’s growing 

flood risks. 

(493) OECD (2024), OECD Economic Surveys: Austria 2024. 

(494) Bundeskanzleramt (2025). Regierungsprogramm Österreich 

2025-2029. 

(495) ÖROK (2025), ÖROK-Monitoring Flächeninanspruchnahme 

und Versiegelung in Österreich. 

Source: European Commission, Mapadomo database 

its  potential  and 

in  winter,  wind  energy  generation 

Austria  has  one  of  the  highest  renewable 
electricity consumption shares in the EU, but 
electricity  generation  from  wind  and  solar 
PV remains below 
is 
concentrated  in  the  eastern  and  south-
eastern  regions.  Despite  its  great  potential, 
particularly  for  increasing  the  share  of  renewable 
energy 
is 
growing  very  slowly.  Generation 
is  highly 
concentrated  in  the  east  of  the  country,  with 
Burgenland  and  Niederösterreich  accounting  for 
91.5% of total wind energy production. By contrast 
Steiermark,  Oberösterreich  and  Kärnten  account 
for  only  a  moderate  share  of  wind  energy 
generation  and 
installed  capacity,  despite  a 
significant  potential  in  these  regions.  Wind  power 
expansion in Austria is particularly slowed by local 
protests  from  citizen  groups  opposing  turbines 
near  their  communities  (the  NIMBY  effect,  ‘not  in 
my  back  yard’),  which  often  lead  to  political 
pressure, and delays in the permitting process. The 
share of solar PV has increased more dynamically 
across all federal states in recent years, supported 
by  falling  technology  costs  and  policy  incentives. 
Nevertheless,  rural  areas,  particularly  those  in 
western  Alpine  regions  of  the  country  with  grid 
and 
to 
demonstrate  relatively  low  output  compared  with 

topographical 

limitations, 

continue 

130 

 
 
 
 
 
ANNEX 19: TRANSPORT 

Table A19.1:ERTMS deployment in Austria. 

Source: Based on ERTMS – Third work plan of the European Coordinator Matthias Ruete. 

This  Transport  Annex  presents  the  state  of  play 
and 
the 
the  challenges  Austria  faces  with 
implementation  of  the  trans-European  transport 
network  (TEN-T),  the  European  railway  traffic 
management  system  (ERTMS)  and  the  roll-out  of 
Sustainable Aviation Fuels (SAF). 

Four  European  transport  corridors  cross 
Austria (Rhine – Danube, Baltic Sea – Adriatic 
Sea,  Scandinavian  –  Mediterranean,  and 
Western  Balkans  –  Eastern  Mediterranean). 
The  Austrian  TEN-T  rail  network  is  3 028 km long 
(1 222 of which are on the core network). The road 
network is 1 827 km long (1 101 of which are on 
the  core  network).  Austria  has  343 km  of  inland 
waterways, six airports (including one core airport), 
four  ports  (including  three  core  ports)  and  nine 
urban nodes on TEN-T (496).  

railway 
Austria  has  a  well-developed 
network,  though 
it  faces  some  critical 
bottlenecks  and  capacity  constraints  along 
its TEN-T corridor routes. Investment is needed 
to  complete  the  Semmering  Base  Tunnel,  which 
lies  on  the  Baltic  Sea  –  Adriatic  Sea  corridor 
connecting  Poland  with  the  Italian  Adriatic  ports. 
Although  construction  is  underway,  an  additional 
EUR 400 million will be needed until completion in 
2030.  Moreover,  it  is  necessary  to  expand  the 
capacity  of  the  route  from  Vienna  to  Munich,  a 
significant  segment  of  the  Rhine  –  Danube 
corridor,  by  upgrading  the  section  between  Linz 
and Wels from two to four tracks.  

Additionally,  capacity  enhancements  are 
necessary 
north-south 
connections,  which  form  the  beginning  of  the 
Western  Balkan  –  Eastern  Mediterranean  corridor 

two 

the 

on 

from  Austria  to  Greece:  from  Salzburg  to  Villach 
via  the  Lueg  Pass  and  from  Linz  to  Graz,  which 
requires expansion to a dual-track line.  

The  ERTMS  is  essential  to  digitalising  the 
railways and to modernising and harmonising 
railway  operations  across  Europe.  The  ERTMS 
ensures the safety of rail networks by providing a 
unified signalling system that significantly reduces 
the 
It  also  provides 
interoperability  between  national  rail  systems, 
improving  cross-border  train  movements.  Finally, 
the  ERTMS  enhances  network  capacity  and 
operational 
the 
competitiveness of the rail sector. 

risk  of  accidents. 

efficiency, 

increasing 

Scaling  up  ERTMS  deployment  is  key  to 
maximising capacity on the country’s densely 
used  rail  corridors  and  enabling  efficient 
late  2024 (497), 
traffic  management.  As  of 
ERTMS  was  in  operation  on  15%  of  the  Austria’s 
TEN-T  rail  network.  To  meet  its  national  plan’s 
ERTMS  roll-out  target  by  2035,  Austria  aims  to 
deploy  ERTMS  on  an  additional  length  of  almost 
2 000 km.  A  plan  for  decommissioning  of  the 
legacy signalling system is lacking. 

Austria  is  investing  significantly  in  its  rail 
infrastructure  to  overcome  capacity  limits 
and strengthen its role as a transit hub. While 
planning  and  permit  procedures  are  complex  and 
lengthy,  there  are  no  significant  implementation 
delays.  

Austria  would  benefit  from  continuing  to 
strengthen  the  operating  conditions  of  the 
faces 
National  Safety  Authority. 

It  still 

(496) TENtec Information System, according to Reg. 2024/1679. 

Coordinator Matthias Ruete. 

(497) Based on ERTMS – Third work plan of the European 

131 

 
 
 
 
 
 
 
 
 
Map A19.1:  TEN-T cross-border & national priority sections in Austria. 

challenges  related  to  its  budgetary  and  staffing 
constraints,  and  the  need  to  make  supervision 
more risk‑based and effective. 

support 

investment 

to 
This 

Austria  has  a  strong  industrial  base  to 
produce  sustainable  aviation  fuels  (SAF) 
primarily  driven  by  the  efforts  of  its  national  oil 
and  gas  company  (498).  But new  initiatives  require 
initiate 
continued 
commercial-scale  deployment. 
includes 
projects  which  could  supply  bioSAF  as  well  as 
Targeted 
demonstration 
investments 
SAF 
commercialisation  can  be  made  through  pilot 
(such  as  double-sided 
investment  structures 
auctions)  through  the  EU’s  e-SAF  Early  Movers 
Coalition,  as  well  as  the  effective  use  of  existing 
EU  revenue  opportunities  related  to  aviation 
transition  (e.g.  EU  ETS),  and  all  penalties  revenue 
generated by ReFuelEU Aviation.  

plants 
that 

for 
will 

enable 

eSAF. 

Road  crashes  impose  an  enormous  social, 
economic  and  health  burden  on  the  EU 

economy.  The  external  socio-economic  costs  of 
fatal,  serious  and  minor  injuries  have  remained 
persistently  high  despite  the  progress  made  in 
reducing  crash  frequency  and  severity.  These 
resources 
innovation, 
education,  healthcare  and  other  crucial  public 
investments (499). 

could  otherwise 

fuel 

In  2024,  Austria  performed  better  than  the 
EU  average  (45)  with  38  road  fatalities  per 
million  inhabitants.  According  to  the  data,  a 
decrease  of  16%  in  road  fatalities  was  recorded 
between  2019  and  2024.  The  number  of  serious 
injuries  also  decreased  by  3%  over  the  period 
2019-2023.  Compared  to  the  EU  average,  the 
distribution  of  fatalities  in  Austria  showed  a  high 
proportion  of  fatalities  on  roads  outside  urban 
areas and for cyclist  fatalities inside urban areas. 

(498) EASA ReFuelEU Aviation Technical report (2025). 

framework at the Mid-Point, COM(2026) 77 final. 

(499) Report on the implementation of the EU Road Safety Policy 

132 

 
 
 
 
 
 
 
 
The  proportion  of  motorcycle  fatalities  in  total 
traffic  fatalities  on  rural  roads  in  Austria  is  also 
one of the highest in the EU.  

Austria,  while  reaching  some  reasonable 
progress,  requires  more  actions  to  meet  the 
2030  targets  of  halving  road  fatalities  and 
serious  injuries.  Possible  ways  to  address  this 
could  be  better  coordination  among  the  relevant 
authorities  and  stakeholders  and  accelerating  the 
implementation 
effective 
measures(500).  

the  most 

of 

Graph A19.1: Austria's road fatalities per million, 
2024 

Source: Report at the Mid-Point - Austria, SWD(2026) 33 
final. 

The  map  below  presents  the  roads  with  poor 
infrastructure  safety,  where  urgent  action 
is 
required. 

Map A19.2:  Austria's road safety map 

Source: TENtec Information System and TEN-T map library – 
European Commission 

(500) More details in Report on the implementation of the EU Road 

Safety Policy framework at the Mid-Point – Austria, 
SWD(2026) 33 final. 

133 

 
 
 
 
 
 
 
 
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