Inflation at its highest level since 1981, steadily rising energy prices, a shortage of building materials of all kinds – the COVID-19 pandemic, the current war in Ukraine as well as the associated sanctions against Russia have not left Austria unscathed. The current global economic environment is also having a wide impact on labour relations in Austria.
For example, the salary-increase negotiations currently taking place between the trade unions and the Chamber of Commerce are strongly influenced by the current very high inflation levels in Austria and the whole of Europe. The trade unions demand that wages be increased by at least 6% this year (whereas 2,5 or 3% increases were agreed in the past) in order to secure purchasing power for employees. This demand has been rejected by employer representatives as unrealistic, not least because of the fatal economic consequences of the crises mentioned on companies involved. If further rounds of negotiations fail, warning strikes are on the cards. In the banking sector a compromise salary increase was agreed on at the beginning of April 2022, due to the severe effects of the cutting-off of significant business with Russia by internationally active Austrian banks (despite good results on a national level).
Further, Austria recently has declared itself to be at the early warning stages of its emergency plan for gas supply. The reason was Russia’s announcement that gas deliveries must be paid for in rubles in future. Even though energy control measures such as rationing are not planned for the time being, the Austrian climate ministry has called on companies to voluntarily reduce their gas consumption. Since Russian gas covers approximately 80% of Austria’s total usage, a gas embargo would be fatal for the Austrian economy. If it happened, there would inevitably be increasing numbers of insolvencies and company closures, especially in industry and construction. For example, the world’s largest brick and tile company, Wienerberger, based in Vienna, has just announced that it will selectively reduce production and introduce short-time work in the event of a shortage in the supply of gas. Other companies will most probably follow.