EU doom-mongers predicted in the wake of the United Kingdom’s Brexit vote that other countries would follow suit in the months and years to come. But one of the countries touted as a fellow ‘exiter’, Austria, looks likely to stay in the European club for now. EURACTIV Germany reports.
Europe’s right-wing populists have latched onto the European Union as an easy way to score points, using the bloc’s policies and alleged shortcomings as a way of drumming up support, quite often ignoring the damage that comes with targeting it.
But now a new study carried out in Austria has shown the benefits of EU membership to the alpine republic and the potential chaos a so-called ‘Öxit’ (Österreich-exit) could cause for the country.
If Austrians were asked the question at the moment, then 61% would be opposed to leaving the EU. Interestingly, young Austrians are more anti-EU than in other countries, as 28% said that they would vote to leave. In Germany, that number is just 11%.
Chamber of Commerce President Christoph Leitl called for this finding not to be swept under the rug, but for “more facts” to be given to people in favour of leaving and for lessons to be learned from the aftermath of the UK’s vote, “where the economy was led into a valley of tears”.
The study, commissioned by the chamber, shows in black and white what advantages Austria reaps from its EU membership. Researcher Christian Keuschnigg spoke of a “phenomenal return” on the country’s investment and listed several important positives.
Firstly, net payments of 0.4% of GDP are converted into long-term gains of 7%, nearly a 19 times increase of its investment.
Secondly, innovative companies looking to export have enjoyed strong economic growth because of the country’s lucrative access to the internal market and unrestricted access has increased direct investment from multinational companies fivefold since 1995.
Foreign subsidiaries in Austria may only make up 3.2% of companies, but they employ 566,000 people, nearly a fifth of the country’s workforce, account for a third of sales revenue and a quarter of all added value.
Generally, Austria’s competitiveness was increased when it joined the bloc, prices have gone down and real purchasing power has gone up.
Without EU membership, the study estimated that Austria’s GDP would be 7% lower today as a result. If it were to follow the UK in its way out the door, then up to 150,000 jobs would go with it.
For economic expert Christoph Leitl, the US election result should therefore act as a wake-up call: “In the US, Trump is all about “America first”. Turkish President Erdoğan wants to turn Turkey into a hegemonic regional power. Putin wants to make Russia strong again. And we want to weaken Europe? What we need now is the opposite, to strengthen it, through a further development of the European Union, so that we are once again able to face the challenges of the world and to shape globalisation.”
Researcher Keuschnigg insisted that this requires a monetary union with much deeper integration and for the eurozone to remain at the core of the bloc. He added that only member states that are open to more economic integration should be offered a place in a reformed European economic area.