The Greek tragedy, European economic policy and Austria

The rul­ing Social Demo­c­ra­t­ic Par­ty (SPÖ) and the People’s Par­ty (ÖVP) have been defend­ing the aid pack­age to Greece, say­ing it was a nec­es­sary and indis­pens­able mea­sure. They have also repeat­ed that not only Greece but also the Euro was at stake and that not help­ing Greece would be much cost­lier than pro­vid­ing the lev­els of aid agreed upon.11See for exam­ple Der Stan­dard, 4 May 2010. Finance Min­is­ter Josef Pröll from the ÖVP point­ed to cred­its grant­ed by Aus­tri­an banks to Greece amount­ing to 5 bil­lion Euros in order to under­line the neces­si­ty of the aid pack­age, while the Gov­er­nor of Austria’s Cen­tral Bank (OeNB), Thomas Nowot­ny, termed the pack­age a “vac­ci­na­tion” which should help oth­ers for­go infec­tion.22Die Presse, 23 April 2010. The rul­ing par­ties also empha­sised that Greece had agreed to adopt and imple­ment “harsh” aus­ter­i­ty mea­sures, which con­sti­tut­ed a pre-con­di­tion for receiv­ing the aid promised. Both the Alliance for the Future of Aus­tria (BZÖ) and the Free­dom Par­ty (FPÖ) opposed the aid pack­age, argu­ing that Greece would nev­er be able to pay back the mon­ey of the Aus­tri­an tax­pay­ers. In con­trast, the Greens wel­comed the aid pack­age, argu­ing that oth­er­wise a chain reac­tion could be set off entail­ing the neces­si­ty for addi­tion­al aid pack­ages for banks and lead­ing to a deval­u­a­tion of the Euro.33Der Stan­dard, 29 April 2010. The Pres­i­dent of the Aus­tri­an Trade Cham­ber (WKO), Christoph Leitl, also pub­licly sup­port­ed the aid pack­age, warn­ing against a pos­si­ble con­fla­gra­tion.44WKO: Leitl zu Griechen­land: “An gemein­samer EU-Wirtschaft­spoli­tik führt kein Weg mehr vor­bei”, 29 April 2010 (last access: 4 May 2010). As for the pub­lic, accord­ing to a poll con­duct­ed among 500 Aus­tri­ans for the mag­a­zine Pro­fil, they are divid­ed on the issue.55Cf. Die Presse, 20 May 2010. While 48 per­cent of the respon­dents stat­ed that they sup­port­ed finan­cial aid to EU coun­tries fac­ing severe prob­lems, 42 per­cent indi­cat­ed that they opposed the idea.

Where­as the way the EU finance min­is­ters reached the deci­sion on Greece was not a top­ic of con­tro­ver­sy in the relat­ed debate, the ques­tion arose as to whether the gov­ern­ment could make such finan­cial com­mit­ments with­out involv­ing the par­lia­ment. The coali­tion part­ners ÖVP und SPÖ argued that the so-called Zahlungs­bi­lanzsta­bil­isierungs­ge­setz – a fed­er­al law adopt­ed in 2009 in the face of the bank­ing cri­sis which allows the finance min­is­ter to offer finan­cial aid to coun­tries Aus­tria is eco­nom­i­cal­ly close­ly asso­ci­at­ed with – pro­vid­ed the legal basis for the com­mit­ments made.66Der Stan­dard, 29 April 2010. How­ev­er, as the bill only allowed for trans­fers amount­ing to 2 bil­lion Euros to a sin­gle coun­try and Aus­tria had accept­ed a cred­it line of 2.3 bil­lion Euros in the case of Greece, the bill required amend­ing. The oppo­si­tion par­ties, on the oth­er hand, argued that the afore­men­tioned bill did not autho­rise the gov­ern­ment to make such finan­cial com­mit­ments and that addi­tion­al par­lia­men­tary autho­ri­sa­tion – that is to say a new law – was required. The Free­dom Par­ty had even been demand­ing a ref­er­en­dum on the issue. Nev­er­the­less, the gov­ern­ment, hav­ing the major­i­ty in par­lia­ment, changed the bill rais­ing the cred­it line to 2.3 bil­lion Euros.77Die Presse, 19 May 2010.

Both FPÖ and BZÖ have been claim­ing that Greece had joined and remained in the Mon­e­tary Union by pro­vid­ing false data to the Union. More­over, from the very begin­ning of the cri­sis, the FPÖ has been demand­ing that Greece should be eject­ed from the Mon­e­tary Union. Mem­ber of Euro­pean Par­lia­ment (MEP) Andreas Mölz­er (FPÖ) argued that the cur­rent sys­tem was not viable and main­tained that two dif­fer­ent cur­ren­cy areas should be estab­lished – a hard cur­ren­cy region includ­ing coun­tries like Ger­many, Aus­tria and the Nether­lands vs. a soft cur­ren­cy region with mem­bers like Greece, Spain or Por­tu­gal.88FPÖ: Mölz­er: Kerneu­ropäis­che Hartwährungszone als Ausweg aus der Euro-Krise, 3 May 2010 (last access: 4 May 2010). From the point of view of the BZÖ, Greece should leave the Mon­e­tary Union, though on a vol­un­tary basis. While the rul­ing par­ties do not sup­port the idea of throw­ing coun­tries out of the Mon­e­tary Union, the Ger­man pro­pos­al to revoke the vot­ing rights of coun­tries that do not stick to the sta­bil­i­ty cri­te­ria is not reject­ed. Over­all, all polit­i­cal actors have been call­ing for bet­ter con­trol and mon­i­tor­ing mech­a­nisms. In line with this, Finance Min­is­ter Josef Pröll (ÖVP) called for more pow­ers for Euro­stat and for the ECB to scru­ti­nise the bud­getary sit­u­a­tion of mem­ber states and the data they pro­vide, which should enable the Eurogroup to pro­pose cor­rec­tive mea­sures at an ear­ly stage.99Der Stan­dard, 7 May 2010.

There seems to exist a gen­er­al under­stand­ing that fur­ther fis­cal and eco­nom­ic coor­di­na­tion and stricter super­vi­sion are required on a Euro­pean lev­el. MEP Hannes Swo­bo­da even stat­ed that a com­mon eco­nom­ic gov­ern­ment con­sti­tut­ed a neces­si­ty.1010Der Stan­dard, 3 March 2010. In a sim­i­lar fash­ion, the Pres­i­dent of the Aus­tri­an Fed­er­al Eco­nom­ic Cham­ber, Christoph Leitl, called for a com­mon and bind­ing eco­nom­ic pol­i­cy.1111Ibid. At the same time, phras­es such as deep­en­ing coor­di­na­tion and coop­er­a­tion seem to require fur­ther spec­i­fi­ca­tion and detail­ing, except for when used with gen­er­al demands and ideas such as estab­lish­ing a finan­cial mar­ket super­vi­sion sys­tem on a Euro­pean lev­el, intro­duc­ing a finan­cial trans­ac­tion tax and found­ing a Euro­pean rat­ing agency and an EU Mon­e­tary Fund. How­ev­er, as the dis­cus­sions on the Europe 2020 Strat­e­gy show, too much inter­fer­ence in bud­getary and eco­nom­ic affairs does not seem to be desired.

While the reac­tion of the rul­ing par­ties to the Europe 2020 Strat­e­gy was pos­i­tive in gen­er­al, togeth­er with the oppo­si­tion par­ties they crit­i­cised cer­tain cen­tral­is­tic ten­den­cies in the paper.1212Par­la­ment der Repub­lik Öster­re­ich: Kri­tis­che Stim­men zur Strate­gie Europa 2020, 24 March 2010 (last access: 20 May 2010). Ewald Stadler (BZÖ) argued the paper was rem­i­nis­cent of eco­nom­ic plans pre­sent­ed by the com­mu­nist par­ty in the for­mer Sovi­et Union. In the view of MEP Mölz­er (FPÖ), the strat­e­gy de fac­to intro­duced a Euro­pean eco­nom­ic gov­ern­ment.1313FPÖ-Parl­mentsklub: Mölz­er: EU2020-Stragie darf nicht nation­al­staatliche Rest­sou­veränität aushöhlen, 3 March 2010 (last access: 4 May 2010). Apart from that, the par­ties in the par­lia­ment con­curred that social aspects (espe­cial­ly pover­ty) were not paid due atten­tion in the Strat­e­gy. Accord­ing to the Green MEP Lunacek, the Strat­e­gy con­sti­tutes a rep­e­ti­tion of the very same ideas and defects of the Lis­bon Strat­e­gy by focus­ing on Gross Domes­tic Prod­uct growth, neglect­ing social aspects, and lack­ing bind­ing goals.1414Die Grü­nen: Lunacek zu Bar­roso: Alte Liss­abon-Ideen statt Grün­er New Deal, 3 March 2010 (last access: 10 May 2010). In a sim­i­lar fash­ion, the Strat­e­gy was crit­i­cised by the Aus­tri­an Trade Union Fed­er­a­tion (ÖGB) for not pay­ing due atten­tion to the cre­ation of new jobs and to job qual­i­ty.1515ÖGB Europabüro: DGB und ÖGB kri­tisieren geplante Aus­gestal­tung von EU 2020-Strate­gie, 23 April 2010 (last access: 4 May 2010). The reac­tion of the WKO was in gen­er­al pos­i­tive.1616Der Stan­dard, 3 March 2010.

The reports focus on a report­ing peri­od from Decem­ber 2009 until May 2010. This sur­vey was con­duct­ed on the basis of a ques­tion­naire that has been elab­o­rat­ed in March and April 2010. Most of the 31 reports were deliv­ered in May 2010.

The EU-27 Watch No. 9 receives sig­nif­i­cant fund­ing from the Otto Wolff-Foun­da­tion, Cologne, in the frame­work of the ‘Dia­log Europa der Otto Wolff-Stiftung’, and finan­cial sup­port from the Euro­pean Com­mis­sion. The Euro­pean Com­mis­sion is not respon­si­ble for any use that may be made of the infor­ma­tion con­tained there­in.