election promises

Corporate Austria Demands Changes

dpatopbilder epa05312283 Austrian Chancellor Christian Kern arrives for his inauguration in Vienna, Austria, 17 May 2016. Christian Kern has repleced former Austrian Chancellor Werner Faymann. EPA/CHRISTIAN BRUNA +++(c) dpa - Bildfunk+++
Austrian Chancellor Christian Kern arrives for his inauguration in Vienna.
  • Why it matters

    Why it matters

    Austria is on the verge of electing a right-wing populist president. If the mainstream parties cannot modernize the economy, they risk sliding further into irrelevance.

  • Facts


    • Christian Kern became chancellor after his predecessor Werner Faymann resigned earlier this month.
    • Mr. Faymann quit after Austria’s two major political parties, Mr. Faymann’s center-left SPÖ and the center-right ÖVP, suffered embarrassing defeats in the first round of presidential elections.
    • Mr. Kern, who had headed the country’s railways, was sworn in earlier this week, ahead of the second round of presidential elections Sunday.
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A new Austrian chancellor hasn’t received this much praise from the business community in decades. There is a deep longing for a head of government who understands the worries and problems of companies in the often staid Alpine republic. So there are huge expectations for Christian Kern, a former railways boss.

Both foreign firms like Siemens, Henkel and Boehringer-Ingelheim and domestic Austrian companies all have long wish lists for the new chancellor. The demands range from rapid dismantling of bureaucracy to flexible working hours and improvements in research and development all the way to business-friendly tax policies.

There is enormous pressure on the freshly-baked chancellor and his coalition. Austria has seen its competitiveness decline in recent years. German investors avoid it and its own companies prefer to expand abroad, for example the steel giant Voestalpine. For a good while, economic growth has been significantly beneath the E.U. average.

Mr. Kern sees himself not as a classic chancellor, but as the chief executive of Austria Inc. and is not afraid to openly talk about the country’s economic problems. 

The no-nonsense chancellor is frank in his assessment of the negativity that extends from Lake Constance on the east to Neusiedler Lake in the west. He says there is an obsession with power and an obliviousness toward the future that has harmed the country. But cheap cliches won’t be enough to change the mood in the country. After years of difficult relations and poor communications with government, the business community wants to see concrete actions.

“This is our last chance. Otherwise, the two large parties will disappear from the radar screen – probably rightly so.”

Christian Kern, Austrian chancellor

Austria can no longer afford to conduct politics according to antiquated patterns of thought and action. The country’s basic mood of hostility to industry, exacerbated by workers’ representatives with a scant grip on reality, has a long tradition. In addition, there is the inefficient scramble for power on all levels, especially in companies with close ties to the state. Mr. Kern is right that the country is only months away from a huge economic shock. 

Mr. Kern’s dramatic rise to power has shaken his conservative coalition partner Austrian People’s Party, or ÖVP, out of its lethargy. ÖVP party chairman and vice-chancellor Reinhold Mitterlehner knows that for both parties, their very survival is at stake.

The establishment is still in shock that in the fight for the office of federal president, neither the Social Democratic nor the Conservative candidate made it to the final round of voting. The right-wing populist Freedom Party of Austria, or FPÖ, has been the strongest political force for a while now. This next Sunday, the Islamophobic head ideologist of the FPÖ, Norbert Hofer, stands a good chance of becoming Austria’s new head of state. For the first time in post war Europe, a right-wing populist would hold the presidency of a Western European country.

Mr. Kern has said: “This is our last chance. Otherwise, the two large parties will disappear from the radar screen – probably rightly so.” 

It may be that Austria is 10 years ahead of Germany politically. The Alternative for Germany is not yet represented in the Bundestag, and the country’s right-left coalition still lumbers from compromise to compromise, and the economy is still booming. Lucky Germany.

Austria, on the other hand, is at a crossroads. If the new chancellor is able to radically break through the political paralysis and to restore its competitiveness in Europe through far-reaching economic, social and educational reforms, Austria will once again become a dependable partner for Germany. Then its two mainstream parties that for so long have been complacent will once again have a political future.

But if the centrist parties fail in what is probably their last attempt to push Austria towards economic prosperity and social security, then this small Alpine country, right in the heart of Europe, faces political unsuitability. This, in combination with the right-wing, populist Viktor Orbán in neighboring Hungary, would have totally unpredictable, and unpleasant, repercussions for all of Europe. 


Hans-Peter Siebenhaar is a correspondent in Vienna. To contact him: siebenhaar@handelsblatt.com





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