Economy of Austria
Encyclopedia
Austria
is one of the 12 richest countries in the world in terms of GDP (Gross domestic product
) per capita, has a well-developed social market economy
, and a high standard of living. Until the 1980s, many of Austria's largest industry firms were nationalised; in recent years, however, privatisation
has reduced state holdings to a level comparable to other European economies. Labour movement
s are particularly strong in Austria and have large influence on labour politics. Next to a highly developed industry, international tourism is the most important part of the national economy.
Germany
has historically been the main trading partner of Austria, making it vulnerable to rapid changes in the German economy. However, since Austria became a member state of the European Union
it has gained closer ties to other European Union
economies, reducing its economic dependence on Germany. In addition, membership in the EU has drawn an influx of foreign investors attracted by Austria's access to the single European market and proximity to the aspiring economies of the European Union. Growth in GDP accelerated in recent years and reached 3.3% in 2006.
In 2004 Austria
was the fourth richest country within the European Union, having a GDP (PPP) per capita of approximately € 27,666, with Luxembourg, Ireland, and Netherlands leading the list.
Vienna
was ranked the fifth richest NUTS
-2 region within Europe (see Economy of Europe
) with GDP reaching € 38,632 per capita, just behind Inner London
, Luxembourg
, Brussels-Capital Region and Hamburg
.
Growth has been steady in recent years 2002–2006 varying between 1 and 3.3 %.
Austria became a member of the EU on 1 January 1995. Membership brought economic benefits and challenges and has drawn an influx of foreign investors attracted by Austria's access to the single European market. Austria also has made progress in generally increasing its international competitiveness. As a member of the economic and monetary union of the European Union (EMU), Austria's economy is closely integrated with other EU member countries, especially with Germany. On 1 January 1999, Austria introduced the new Euro currency for accounting purposes. In January 2002, Euro notes and coins were introduced and substitute for the Austria/Austrian Schilling.
In Austria, Euros appear as 1999, however all Austrian euro coins introduced in 2002 have this year on it; unlike other countries of the Eurozone
where mint year is minted in the coin. Eight different designs, one per face value, were selected for the Austrian coins. In 2007, in order to adopt the new common map like the rest of the Eurozone countries, Austria changed the common side of its coins.
Before adopting the Euro in 2002 Austria had maintained use of the Austrian schilling
which was first established in December 1924. The Schilling was abolished in the wake of the Anschluss
in 1938 and has been reintroduced after the end of the World War II
in November 1945.
Austria has one of the richest collection of collectors' coins in the Eurozone, with face value ranging from 10 to 100 euro (although a 100,000 euro coin was exceptionally minted in 2004). These coins are a legacy of an old national practice of minting of silver and gold coins. Unlike normal issues, these coins are not legal tender
in all the eurozone. For instance, a €5 Austrian commemorative coin cannot be used in any other country.
. For many years, the government and its state-owned industries conglomerate played a very important role in the Austrian economy. However, starting in the early 1990s, the group was broken apart, state-owned firms started to operate largely as private businesses, and a great number of these firms were wholly or partially privatized. Although the government's privatization work in past years has been very successful, it still operates some firms, state monopolies, utilities, and services. The new government has presented an ambitious privatization program, which, if implemented, will considerably reduce government participation in the economy. Austria enjoys well-developed industry, banking, transportation, services, and commercial facilities.
Austria has a strong labour movement
. The Austrian Trade Union Federation
(ÖGB) comprises constituent unions with a total membership of about 1.5 million—more than half the country's wage and salary earners. Since 1945, the ÖGB has pursued a moderate, consensus-oriented wage policy, cooperating with industry, agriculture, and the government on a broad range of social and economic issues in what is known as Austria's "social partnership
". The ÖGB has often opposed the Schüssel
government's program for budget consolidation, social reform, and improving the business climate, and indications are rising that Austria's peaceful social climate could become more confrontational.
(CAP). Although Austrian farmers provide about 80% of domestic food requirements, the agricultural contribution to gross domestic product
(GDP) has declined since 1950 to less than 3%.
Although some industries are global competitors, such as several iron and steel works, chemical plants and oil corporations that are large industrial enterprises employing thousands of people, most industrial and commercial enterprises in Austria are relatively small on an international scale.
Most important for Austria is the service sector generating the vast majority of Austria's GDP. Vienna has grown into a finance and consulting metropole and has established itself as the door to the East within the last decades. Viennese law firms and banks are among the leading corporations in business with the new EU member states. Tourism
is very important for Austria's economy, accounting for around 10 percent of Austria's GDP. In 2001, Austria was the tenth most visited country in the world with over 18.2 million tourists. Previously, dependency on German guests made this sector of the Austrian economy very dependent on German economy. However recent developments have brought a change, especially since winter ski resorts such as Arlberg
or Kitzbühel
are now more and more frequented by Eastern Europeans, Russians and Americans.
by the social democrats in Vienna
initially.
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
is one of the 12 richest countries in the world in terms of GDP (Gross domestic product
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
) per capita, has a well-developed social market economy
Social market economy
The social market economy is the main economic model used in West Germany after World War II. It is based on the economic philosophy of Ordoliberalism from the Freiburg School...
, and a high standard of living. Until the 1980s, many of Austria's largest industry firms were nationalised; in recent years, however, privatisation
Privatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...
has reduced state holdings to a level comparable to other European economies. Labour movement
Labour movement
The term labour movement or labor movement is a broad term for the development of a collective organization of working people, to campaign in their own interest for better treatment from their employers and governments, in particular through the implementation of specific laws governing labour...
s are particularly strong in Austria and have large influence on labour politics. Next to a highly developed industry, international tourism is the most important part of the national economy.
Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
has historically been the main trading partner of Austria, making it vulnerable to rapid changes in the German economy. However, since Austria became a member state of the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
it has gained closer ties to other European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
economies, reducing its economic dependence on Germany. In addition, membership in the EU has drawn an influx of foreign investors attracted by Austria's access to the single European market and proximity to the aspiring economies of the European Union. Growth in GDP accelerated in recent years and reached 3.3% in 2006.
In 2004 Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
was the fourth richest country within the European Union, having a GDP (PPP) per capita of approximately € 27,666, with Luxembourg, Ireland, and Netherlands leading the list.
Vienna
Vienna
Vienna is the capital and largest city of the Republic of Austria and one of the nine states of Austria. Vienna is Austria's primary city, with a population of about 1.723 million , and is by far the largest city in Austria, as well as its cultural, economic, and political centre...
was ranked the fifth richest NUTS
Nomenclature of Territorial Units for Statistics
The Nomenclature of Territorial Units for Statistics or Nomenclature of Units for Territorial Statistics is a geocode standard for referencing the subdivisions of countries for statistical purposes...
-2 region within Europe (see Economy of Europe
Economy of Europe
The economy of Europe comprises more than 731 million people in 48 different states. Like other continents, the wealth of Europe's states varies, although the poorest are well above the poorest states of other continents in terms of GDP and living standards. The difference in wealth across...
) with GDP reaching € 38,632 per capita, just behind Inner London
Inner London
Inner London is the name for the group of London boroughs which form the interior part of Greater London and are surrounded by Outer London. The area was first officially defined in 1965 and for purposes such as statistics, the definition has changed over time. The terms Inner London and Central...
, Luxembourg
Luxembourg
Luxembourg , officially the Grand Duchy of Luxembourg , is a landlocked country in western Europe, bordered by Belgium, France, and Germany. It has two principal regions: the Oesling in the North as part of the Ardennes massif, and the Gutland in the south...
, Brussels-Capital Region and Hamburg
Hamburg
-History:The first historic name for the city was, according to Claudius Ptolemy's reports, Treva.But the city takes its modern name, Hamburg, from the first permanent building on the site, a castle whose construction was ordered by the Emperor Charlemagne in AD 808...
.
Growth has been steady in recent years 2002–2006 varying between 1 and 3.3 %.
History
Ever since the end of the World War I, Austria has achieved sustained economic growth. In the soaring 1950s, the rebuilding efforts for Austria lead to an average annual growth rate of more than 5% in real terms and averaged about four point five percent through most of the 1960s. Following moderate real GDP growth of 1.7%, 2% and 1.2%, respectively, in 1995, 1996, and 1997, the economy rebounded and with real GDP expansion of 2.9 percent in 1998 and 2.2% in 1999.Austria became a member of the EU on 1 January 1995. Membership brought economic benefits and challenges and has drawn an influx of foreign investors attracted by Austria's access to the single European market. Austria also has made progress in generally increasing its international competitiveness. As a member of the economic and monetary union of the European Union (EMU), Austria's economy is closely integrated with other EU member countries, especially with Germany. On 1 January 1999, Austria introduced the new Euro currency for accounting purposes. In January 2002, Euro notes and coins were introduced and substitute for the Austria/Austrian Schilling.
Currency
Eurozone
The eurozone , officially called the euro area, is an economic and monetary union of seventeen European Union member states that have adopted the euro as their common currency and sole legal tender...
where mint year is minted in the coin. Eight different designs, one per face value, were selected for the Austrian coins. In 2007, in order to adopt the new common map like the rest of the Eurozone countries, Austria changed the common side of its coins.
Before adopting the Euro in 2002 Austria had maintained use of the Austrian schilling
Austrian schilling
The schilling was the currency of Austria from 1924 to 1938 and from 1945 to 1999, and the circulating currency until 2002. The euro was introduced at a fixed parity of €1 = 13.7603 schilling to replace it...
which was first established in December 1924. The Schilling was abolished in the wake of the Anschluss
Anschluss
The Anschluss , also known as the ', was the occupation and annexation of Austria into Nazi Germany in 1938....
in 1938 and has been reintroduced after the end of the World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
in November 1945.
Austria has one of the richest collection of collectors' coins in the Eurozone, with face value ranging from 10 to 100 euro (although a 100,000 euro coin was exceptionally minted in 2004). These coins are a legacy of an old national practice of minting of silver and gold coins. Unlike normal issues, these coins are not legal tender
Legal tender
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency is a common form of legal tender in many countries....
in all the eurozone. For instance, a €5 Austrian commemorative coin cannot be used in any other country.
Privatisation, state participation and labour movements
Many of the country's largest firms were nationalized in the early post-war period to protect them from Soviet takeover as war reparationsWar reparations
War reparations are payments intended to cover damage or injury during a war. Generally, the term war reparations refers to money or goods changing hands, rather than such property transfers as the annexation of land.- History :...
. For many years, the government and its state-owned industries conglomerate played a very important role in the Austrian economy. However, starting in the early 1990s, the group was broken apart, state-owned firms started to operate largely as private businesses, and a great number of these firms were wholly or partially privatized. Although the government's privatization work in past years has been very successful, it still operates some firms, state monopolies, utilities, and services. The new government has presented an ambitious privatization program, which, if implemented, will considerably reduce government participation in the economy. Austria enjoys well-developed industry, banking, transportation, services, and commercial facilities.
Austria has a strong labour movement
Labour movement
The term labour movement or labor movement is a broad term for the development of a collective organization of working people, to campaign in their own interest for better treatment from their employers and governments, in particular through the implementation of specific laws governing labour...
. The Austrian Trade Union Federation
Austrian Trade Union Federation
-External links:*...
(ÖGB) comprises constituent unions with a total membership of about 1.5 million—more than half the country's wage and salary earners. Since 1945, the ÖGB has pursued a moderate, consensus-oriented wage policy, cooperating with industry, agriculture, and the government on a broad range of social and economic issues in what is known as Austria's "social partnership
Social Partnership
Social partnership is the term used for the tripartite, triennial national pay agreements reached in Ireland.The process was initiated in 1987, following a period of high inflation and weak economic growth which led to increased emigration and unsustainable government borrowing and national debt...
". The ÖGB has often opposed the Schüssel
Wolfgang Schüssel
Wolfgang Schüssel is an Austrian People's Party politician. He was Chancellor of Austria for two consecutive terms from February 2000 to January 2007...
government's program for budget consolidation, social reform, and improving the business climate, and indications are rising that Austria's peaceful social climate could become more confrontational.
Agriculture, industry and services
Austrian farms, like those of other west European mountainous countries, are small and fragmented, and production is relatively expensive. Since Austria's becoming a member of the EU in 1995, the Austrian agricultural sector has been undergoing substantial reform under the EU's Common Agricultural PolicyCommon Agricultural Policy
The Common Agricultural Policy is a system of European Union agricultural subsidies and programmes. It represents 48% of the EU's budget, €49.8 billion in 2006 ....
(CAP). Although Austrian farmers provide about 80% of domestic food requirements, the agricultural contribution to gross domestic product
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
(GDP) has declined since 1950 to less than 3%.
Although some industries are global competitors, such as several iron and steel works, chemical plants and oil corporations that are large industrial enterprises employing thousands of people, most industrial and commercial enterprises in Austria are relatively small on an international scale.
Most important for Austria is the service sector generating the vast majority of Austria's GDP. Vienna has grown into a finance and consulting metropole and has established itself as the door to the East within the last decades. Viennese law firms and banks are among the leading corporations in business with the new EU member states. Tourism
Tourism
Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes".Tourism has become a...
is very important for Austria's economy, accounting for around 10 percent of Austria's GDP. In 2001, Austria was the tenth most visited country in the world with over 18.2 million tourists. Previously, dependency on German guests made this sector of the Austrian economy very dependent on German economy. However recent developments have brought a change, especially since winter ski resorts such as Arlberg
Arlberg
Arlberg is a mountain range or massif between Vorarlberg and Tyrol in Austria.The highest peak is the "Valluga" at . The name Arlberg derives from the tradition of the "Arlenburg," who are said to have once established themselves on the Tyrolean side of the Arlberg passes . Another story derives...
or Kitzbühel
Kitzbühel
-Demographic evolution:-Personalities:*Karl Wilhelm von Dalla Torre , entomologist and botanist*Alfons Walde , expressionist painter and architect*Peter Aufschnaiter , mountaineer and geographer...
are now more and more frequented by Eastern Europeans, Russians and Americans.
Health care services
Austria’s health care system was developed alongside other social welfare programsWelfare state
A welfare state is a "concept of government in which the state plays a key role in the protection and promotion of the economic and social well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those...
by the social democrats in Vienna
Red Vienna
Red Vienna was the nickname of the capital of Austria between 1918 and 1934, when the Social Democrats had the majority and the city was democratically governed for the first time.-Social situation after World War I:...
initially.