The head of the Federation of Industrialists (IV), George Knell, is pushing for an exit in view of Austria’s recent increase in dependence on Russian natural gas. “We can no longer rely on this source,” Knill said Sunday at ORF’s “press hour.”
When asked about OMV’s supply contract with Gazprom, which was extended from 2018 to 2040, Knill said that Russia was “completely miscalculated” and that Austria was misled.
Ten billion euros in damages
Knill assesses the economic damage in Austria since Russia’s attack on Ukraine a year ago and the associated sanctions at €10 billion.
“It’s an award we’re happy to support,” he says. The industry supported the sanctions from the start. According to Knill, it is important to demonstrate rejection of the Russian war of aggression and defend European values.
Confidence for the New Year
He cannot say how long this phase will last. After a year, however, it can be “proudly said” that Austrian industry has steered the country through the crisis, says Knill.
A quarter of employees in Austria are employed in industry, a quarter of total value added falls into this area.
The industry assumes weak growth this year, “but we are going to enter the year with confidence”, he emphasizes. However, Austria’s economy is growing more slowly than the EU average. Competitiveness is still an issue, especially after rising costs.
Against the “subsidiite”
Knill said that despite the further increase in Russian supply volumes, Austria must continue to assume that Russia will not supply more gas overnight.
It is therefore a matter of guaranteeing a reliable and accessible supply of gas for the coming years. It therefore needs other supplier countries, such as Norway or the Gulf States, and infrastructure for imports, such as liquefied gas terminals and gas pipelines.
Knill estimates that the state’s energy aid will not fully take effect. As the price of gas has dropped to €50 per megawatt-hour, the industry won’t need the full budgeted €7 billion, according to Knill.
He expressed his confidence that companies will no longer find themselves in a situation where the energy market no longer works.
After massive state aid, first in the corona crisis and then in the energy crisis, it is necessary to get rid of state funds, to cure ourselves of the “subsiditis” that has spread.
You have to move away from help and back to personal responsibility. The IV will be withdrawn when there are requests for more help. “We also have to take each other by the hand,” Knill said.
Part-time incentives
The head of IV described the job market in Austria as “positively tense”. More than 200,000 vacancies could not be filled. “We have nearly full employment.”
Knill said it’s about exploring the full potential, the biggest potential is part-time. There are false incentives here because part-time work has tax privileges compared to full-time work.
There is more potential in foreign workers. Further immigration via the red-white-red card is needed.
Austria should do localization marketing and actively recruit workers from Kosovo and Bosnia, as well as from South America and Southeast Asia. Knill warned that there will be more than 500,000 labor shortages in the coming years.
Mercosur for climate protection
The sector representative also campaigned for free trade. The planned Mercosur agreement with Argentina, Brazil, Paraguay and Uruguay concerns not only Argentine beef, but also sales markets for Austrian exporters.
Knill cited climate protection as an argument for the Mercosur agreement: In the free trade agreement, countries would also commit to complying with the Paris climate agreement.
The 2015 Paris climate protection agreement was supposed to stop global warming by 1.5 degrees, but experts say it’s already too late for that.
Mercosur countries Brazil, Argentina, Paraguay and Uruguay have ratified the Paris climate protection agreement, as have Austria and all EU countries, but so far have failed to meet agreed targets.
According to NASA, the Earth was about 1.11 degrees warmer on average in 2022 than it was at the end of the 19th century, i.e. before the industrial revolution.
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