Austria's Economy Demands Help with Energy Crisis

PeopleEntrepreneurs ♦ Published: September 27, 2022; 10:11 ♦ (Vindobona)

Many companies in Austria are currently struggling with the high energy prices. Now the Austrian Federal Economic Chamber and the Federation of Austrian Industries are calling for political intervention to prevent company closures.

Harald Mahrer, President of the WKO, calls for rapid and unbureaucratic help for Austrian companies. / Picture: © WKO Austrian Chamber of Commerce / Marek Knopp | 6016 x 4016 px | 3,8 MB

The high energy prices have been burdening Austrian households for several months. Many people are living at the subsistence level due to the increased costs. Politicians are trying to find a remedy.

But not only private households suffer from the oppressively high costs. Many companies in Austria are feeling the increase in energy prices and are now demanding more support from politicians.

Harald Mahrer and Georg Knill, the presidents of the Austrian Federal Economic Chamber (WKÖ) and the Federation of Austrian Industries (IV), criticise the passive attitude in politics: "One has the impression more and more that politics is forgetting about domestic companies in the biggest energy crisis of the Second Republic."

Above all, they resent the fact that there are still no substantial relief measures in sight for Austria's businesses. Mahrer made it clear that in many cases economic livelihoods were at stake. Many of the urgently needed jobs that would disappear if companies started to close down would also stand or fall with these companies.

In this situation, there is no time for political tactics and soapbox speeches, "because time is something we no longer have. Relief for businesses must finally come - noticeably, unbureaucratically and, above all, quickly".

Demand for decoupling of electricity and gas prices

With regard to the EU Special Council on Energy, the industry emphasises once again: "The situation on the gas and electricity markets is dramatic and is now attacking the substance of Austria as a business location. Companies cannot produce economically under these conditions. If production is relocated due to the high energy costs and industrial companies have to relocate, there is a threat of a massive loss of prosperity," warns IV President Knill.

"We have to get to the root of the problem: what is urgently needed now is temporary compensation for extreme peaks in the price of gas and a cap on the price of electricity so that companies can continue to produce competitively. At the same time, the EU should strive for joint gas purchasing in order to improve its negotiating position with more market power," emphasise Knill and Mahrer in unison.

In concrete terms, from the point of view of the business community, support is needed for all energy sources, whether electricity, gas or oil, in order to at least be able to slow down the "avalanche of burdens".

The negotiations in this regard must now be brought to a conclusion at full speed and the existing support tools must be made usable. For example, the energy cost subsidy is covered by EU subsidy law until the end of the year and makes it possible - depending on the share of energy costs - to reimburse a part of the additional costs from SMEs to large enterprises. What is missing so far is an implementing directive.

"We have a number of instruments at our disposal that would cushion the price explosions also for companies in this energy crisis. It is time to finally use these possibilities before it is too late. For it is not just a matter of averting short-term damage. When companies shut down production or even entire sites, they naturally look to where energy is cheaper. Our competitiveness is lost, value creation, jobs and prosperity in Austria are lost - and they will not come back. It is therefore high time that politicians at the federal level bring the current negotiations to an end and move from talking to doing - anything else would be tantamount to wilful and lasting damage to Austria as a business location," Mahrer and Knill concluded.

WKO Austrian Federal Chamber of Commerce