Management of International Projects International Business Environment

COUNTRY REPORT -AUSTRIA

Team : Iulia-Claudia Bugean Sergiu Dragan Alexandru Busca Mihai-Alexandru Sirbu

Bucharest, 2011

Austria Country report

Chapter 1 Presentation of the country. demographic trends, Human Development Index, transport and telecommunication network Austria is a small country located in Central Europe with a population of 8.3 million. It borders both Germany and the Czech Republic to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the west. Austria's terrain is highly mountainous due to the presence of the Alps. Therefore the country is influenced by a temperate and alpine climate. The territory of Austria covers 83,871 sq km (8,4 million ha). According to the Austrian forest inventory (1986/90) 3,9 million ha, nearly 50 percent of Austria, is forest. Famous for its spectacular mountain scenery, Austria is no longer the dominant political force it was in Central Europe under the Habsburg dynasty which ruled until the first world war. However, its position at the geographical heart of Europe on the key Danube trade route enhances its strategic importance. Austria is divided into 9 states,wich are divided into districts and statutory cities. Districts are subdivided into municipalities . Statutory Cities have the competencies otherwise granted to both districts and municipalities. The states are not mere administrative divisions but have some legislative authority distinct from the federal government, e.g. in matters of culture, social care, youth and nature protection, hunting, building, and zoning ordinances. In recent years, it has been discussed whether today it is appropriate for a small country to maintain ten parliaments. States Burgenland : capital - Eisenstadt, area - 3,966 km, population - 280,350; Vorarlberg : capital - Bregenz , area - 2,601 km, population - 364,611; Salzburg : capital - Salzburg, area - 7,154 km, population - 529,085; Carinthia : capital - Klagenfurt, area - 9,536 km, population - 560,753; Tyrol : capital - Innsbruck, area - 12,648 km, population - 698,472; Styria : capital - Graz, area - 16,392 km, population - 1,203,986; Upper Austria : capital - Linz, area - 11,980 km, population - 1,405,986; Lower Austria : capital - St.Polten, area - 19,174 km, population - 1,588,545; Vienna : capital - Vienna, area - 414.90 km, population - 1,660,534. The capital, Vienna, is home to key international organisations, including the Organisation for Security and Cooperation in Europe (OSCE), the International Atomic Energy Agency (IAEA) and Opec, the Organisation of Petroleum Exporting Countries. Vienna has a population of about 1.7 million and is by far the largest city in Austria, as well as its cultural, economic, and political centre. It is the 10thlargest city by population in the European Union. The currency in Austria is Euro that was introduced as an accounting currency on 1 January 1999, and euro coins and banknotes entered circulation on 1 January 2002. As a preparation for this date, the minting of the new euro coins started as early as 1999, however all Austrian euro coins introduced in 2002 have this year on it; unlike other countries of the Eurozone where mint year is minted in the coin.The Central Bank is Austrian National Bank and its International Reserves are US$ 21.244 billion (Source: IMF; Data updated: November 2010). Before adopting the Euro in 2002 Austria had maintained use of the Austrian schilling which was first established in December 1924. The Schilling was abolished in the wake of the Anschluss in 1938 and was reintroduced after the end of the World War II in November 1945.

Politics Austria is a Federal Republic that is run by The Head of State(the Federal President) and the Government(the federal parliament). The Federal President is elected by direct popular vote for a term of six years, renewable once. The current incumbent, President Heinz Fischer, former SP Speaker of Parliament, was elected president on 25 April 2004 and sworn in on 8 July 2004. He succeeded the late Thomas Klestil, who had served as president since 1992. Fischer was re-elected in April 2010 with 79.3% of the vote in a largely one-sided competition against the FP candidate Barbara Rosenkranz. Fischers election was sworn in for his second term on 8 July 2010. The Federal Parliament consists of two chambers: the Nationalrat and the Bundesrat. Members are directly elected to the Nationalrat for a five-year term. This follows electoral reform, which extended the term from four years, with effect from the last general election (28 September 2008). The reforms also lowered the voting age from 18 to 16 years. Members of the Bundesrat are elected by the provincial assemblies for a five-year term (with the exception of the province of Upper Austria, where they are elected for a six-year term). Austrias government is a so-called Grand Coalition, between the Social Democratic Party (Sozialdemokratische Partei sterreichs, SP) and the conservative Peoples Party (sterreichische Volkspartei, VP). Werner Faymann (SP) is the Chancellor, and Josef Prll (VP) the Vice Chancellor (and Finance Minister). Languages&Religions The official language in Austria is german, is spoken by 88.6% followed by Turkish 2.3%, Serbian 2.2%, Croatian (official in Burgenland) 1.6%, other (includes Slovene, official in Carinthia, and Hungarian, official in Burgenland) 5.3% . According to census information published by Statistik Austria there were a total of 710,926 foreign nationals living in Austria. Of these, 124,392 speak German as their mother tongue (mainly immigrants from Germany, some from Switzerland and South Tyrol, Italy). The next largest populations of linguistic and ethnic groups are 283,334 foreign nationals from the former Yugoslavia (of whom 135,376 speak Serbian; 105,487 Croatian; 31.551 Bosnian; 6,902 Slovenian and 4,018 Macedonian); 123,417 speak Turkish; 25,155 English; 24,446 Albanian; 17,899 Polish; 14,699 Hungarian; 12,216 Romanian; 7,982 Arabic; 6,891 Slovak; 6,707 Czech; 5,916 Persian; 5,677 Italian; 5,466 Russian; 5,213 French; 4,938 Chinese; 4,264 Spanish; 3,503 Bulgarian. Because it has a large number of immigrants ,religion is varied the majority are Roman Catholic (5,662,782 members, or 68.5% of the total Austrian population,according to the Austrian Roman Catholic Church),the rest are Lutherans,Muslim,Jewish and about 12% of the population declared that they have no religion. YEAR 2001 2005 2008 POPULATION 8,032,926 8,250,000 8,350,000 CATHOLICS 5,915,421 5,662,782 5,579,493 PERCENTAGE 73.6% 68.5% 66.8% LUTHERANS 376,150 328,346 PERCENTAGE 4.7% 3.9%

Demographic indicators 2005-2008 INDICATOR Birth rate(number of live births per 1,000 total Population) Total fertility rate (births per woman) Net reproduction rate Mean age of fertility all births first births Death rate (number of deaths per 1,000 total population) Life expectancy at birth (years) males females Infant mortality rate (number of infant deaths per 1,000 live births) Perinatal mortality rate (number of still births and infant deaths in the first week of life per 1,000 live births) Marriage rate (number of marriages per 1,000 total population) Median age at first marriage males females Total divorce rate (%) 2005 9.5 1.41 0.68 29.0 27.3 9.1 76.6 82.2 4.2 5.9 4.8 30.9 28.1 46.4 2008 9.3 1.41 0.68 29.5 27.8 9.0 77.6 83.0 3.7 5.4 4.2 31.7 28.9 47.8

Transport Austria is a country extremely developed in transportation;it has various ways to travel thru the country or across it. Ways of transportation Road : The Austrians are known to be a car-loving nation. As a result, Austria boasts an excellent road network. However, almost all of the bigger cities suffer from severe parking availability problems. Spaces are scarce and prohibitively expensive. Austria has 26 motorways with a total of 200.000km (100% paved, including 1700 km of expressways). Austria has 17 Autobahnen(expressways) with a total length of 1,699 km, built and maintained by the ASFINAG Company held by the Republic. Each route bears a number as well as an official name with local reference not displayed on road signs. Unusually for European countries, interchanges are numbered by distance in kilometres starting from where the route begins; this arrangement is also used in the Czech Republic, Slovakia, Spain, and most provinces of Canada (and in most American states, albeit in miles). The system is going to be expanded; one Autobahn is currently under construction, and two more are planned. In spite of Austria's relatively low population density, the motorway density per capita is the highest in Europe, possibly due to its location in the centre of the continent. The West Autobahn or A1 was the first motorway to be built in Austria originating from plans

drawn up for the so-called Reichsautobahn system. Today it runs from Vienna via Linz to Salzburg.

Rail: The deregulation measures implemented within the European Union and the resulting statutory and organisational changes in the rail sector strongly influence the development of rail transport in Austria. The railway network consists of 6,123 km, its gauge is 1,435 mm (Standard gauge) and 3,523 km are electrified and is mainly owned by the national rail company BB. Austrian network, out of the principal rail system, also counts some funiculars, rack railways and lot of heritage railways mainly derived from part of disused lines. Some secodary lines have a narrow gauge.The principal rail system in Austria is divided in two:rail freight transport and rail passenger transport. In rail freight transport, a total of 98.9 million tons of freight was transported on Austrias railway network in 2008 by all domestic and foreign railway operating companies. The breakdown by modes of transport was as follows: inland transport, 35.0 million tons; international goods receipt, 27.5 million tons; international goods dispatch, 16.5 million tons and transit, 20.0 million tons. In passenger transport a total of 239.7 (2008: 238.9) million passengers were transported on the rail network on Austrias federal territory by domestic and foreign railway companies in the year 2009. This represents a rise of 0.3% compared to the preceding year. The share of all foreign railway operating companies, which transported a total of 1.9 million passengers (2008: 1.7 million),cumulated to 0.8% (2008: 0.7%). The transport performance in passenger transport decreased by 0.2 billion passenger kilometres or 1.7% to 10.7 billion passenger kilometres whereof 0.5% (2008: 0.6%) was conducted by foreign rail operating companies. Aviation: The survey scope of civil aviation in Austria covers commercial aviation (scheduled and nonscheduled transport) and general aviation. The results provide an insight into the developments in civil aviation in Austria, which represents an important economic factor. If one takes into account all the enterprises involved in providing civil aviation services, including all the upstream and downstream stages, the relevant driving forces for employment and local value added can be determined. The stock of civil aircraft in 2009 with a total number of 1 597 (2008: 1 559) represented a rise of 2.4% compared to

the previous year. With the exception of microlights and motor gliders a constant or increasing stock in all sections of general aviation was noted. In commercial air transport (scheduled and non-scheduled services) there was an overall increase.

Years 2005 2008

Aircraft Weight categories A 598 621 B C D 7 74 56 9 144 91 E 24 37 F 122 180

Hydroplanes 1

Gyroplanes 124 147

Microlights 96 107

Motor gliders 220 199

Powered aircraft owned by the Austrian federation Aircraft Helicopters 2 17 2 21

Total 1,340 1,559

Weight category A: single-engine up to 2 000 kg. Weight category B: single-engine from 2 000 kg to 5 700 kg; from 2007: single-engine with more than 2 000 kg to 5 700 kg. Weight category C: multi-engine up to 5 700 kg. Weight category D: single- and multi-engine from 5 700 kg to 14 000 kg; from 2007: single- and multiengine with more than 5 700 kg to 14 000 kg. Weight category E: multi-engine from 14 000 kg to 20 000 kg; from 2007: multi-engine with more than 14 000 kg to 20 000 kg. Weight category F: multi-engine with more than 20 000 kg. S: AUSTRO CONTROL; as of 2005 for microlights AUSTRIAN AEROCLUB. Compiled on 18 Mai 2010. Freight and postal transport Within 317 534 flight movements in commercial aviation (scheduled and non-scheduled transport), which were reported in 2009, a decrease of 9.1% compared to the preceding year, a total of 209 200 tons (t) (-2.6%) of freight and 12 707 t (-11.2%) of mail were transported via the six Austrian international airports (including transit). Air passenger transport: In commercial aviation (scheduled and non-scheduled transport) in 2009, almost 22.7 million air passengers (including transit), which was a decrease of about 2.1 million passengers or 8.5% compared with 2008, were transported by a total of 317 534 (-8.3%) flight movements at Austrias six airports. Scheduled airline services accounted for 20.7 million or 91.2% of air passengers, which was a decline of 7.8%, while non-scheduled airline services recorded around 2.0 million passengers (a share of 8.8%), which was a drop of 15% compared with the previous year. Austria has 55 airports and two heliport. Most airports in the country have short, unpaved runways and only one airport has paved runways longer than 10,000 feet. Inland waterway Inland waterway transport is widely regarded as an eco-friendly mode of transporting especially large volumes of freight. The inland waterway survey covers the transport performance of domestic and

foreign vessels transporting freight on the Danube waterway, which links Austria with the European waterway network.Austria has 4 ports(Enns,Krems,Linz,Vienna) and all access the Danube. Telecommunications Austria has a highly developed and efficient telephone network, and has a number of radio and television broadcast stations. Telekom Austria dominates the fixed-line, mobile and broadband sectors through ownership of the countrys most extensive last-mile infrastructure (which has allowed it to progressively roll out double-, triple- and quadruple-play services); its highly-visible brand; and its ability to compete aggressively for new customers through attractive price promotions and retail marketing offers. The mobile and broadband sectors exhibit the strongest potential for growth, despite the fact that, at 121% at the end of 2007, mobile penetration was among the highest in Western Europe. In addition, delays in getting operators to agree interconnection and access agreements may have historically dampened growth potential in the broadband sector. There were 9.948mn mobile subscribers at the end of March 2008, served by four network operators and four service providers/resellers. This represented a year-on-year (yo- y) increase of 5.1% and a quarter-on-quarter (q-o-q) improvement of 1.6%.The 3G mobile services demand is strong, and there were 2.465mn active 3G SIM cards at the end of 2007. Internet in Austria is typically received over DSL and cable. However, mobile services employing UMTS/HSDPA are rapidly gaining ground due to fierce market competition. SDSL and mobile phone access is also available. The uptake of mobile broadband services is reflected by the high penetration of broadband in general.There were 2.208mn fixed and mobile broadband users in Austria at the end of 2007, yielding a penetration rate of almost 27%.Clearly, the market is being driven by the use of mobile broadband services but is being held back by problems in getting alternative operators to quickly agree network interconnection and access agreements with the incumbent. The main ISP's in Austria are: Telekom Austria(internet,voice telephony,data communications)UPC(cable access and DSL)and Kabelsignal(cable services). Austrias telecommunications market is characterised by intense competition, which in recent years has caused a substantial decrease in prices for voice and data traffic, the declining wireline sector and the ever-growing mobile sector. The mobile market is witnessing a combination of increased subscribers and lower tariffs; the proportion of data services is rising and the introduction of flat tariffs is proving to be catalyst for sector development. The broadband sector is rapidly growing in comparison, with narrowband having a lower rate of penetration and becoming less relevant. Increased use of mobile broadband is demonstrating good prospects for further development of this sector.

Chapter 2 The macroeconomic environment and the results of the economic development of Austria

General description of the Austrian economic environment Austria, with its well-developed market economy and high standard of living, is closely tied to other EU economies, especially Germany's. Its economy features a large service sector, a sound industrial sector, and a small, but highly developed agricultural sector. Following several years of solid foreign demand for Austrian exports and record employment growth, the international financial crisis and global economic downturn in 2008 led to a sharp but brief recession. Austrian GDP contracted 3.9% in 2009 but saw positive growth of about 2% in 2010. Unemployment has not risen as steeply in Austria as elsewhere in Europe, partly because its government has subsidized reduced working hour schemes to allow companies to retain employees. Stabilization measures, stimulus spending, and an income tax reform pushed the budget deficit to 3.5% of GDP in 2009 and 4.7% in 2010, from only about 1.3% in 2008. The international financial crisis caused difficulties for Austria's largest banks whose extensive operations in central, eastern, and southeastern Europe faced large losses. The government provided bank support including in some instances, nationalization - to prevent insolvency and possible contagion. In the medium-term all large Austrian banks will need additional capital. Even after the global economic outlook improves, Austria will need to continue restructuring, emphasize knowledge-based sectors of the economy, and encourage greater labor flexibility and labor participation to offset growing unemployment and Austria's aging population and low fertility rate. (Source: http://www.indexmundi.com/austria/economy_overview.html)

Economic growth indicators 1. GDP at constant prices (billions of US dollars)

year 2005 2006 2007 2008

GDP 243.585 252.350 261.762 267.465

Gross domestic product (GDP) at constant prices refers to the volume level of GDP. Constant price estimates of GDP are obtained by expressing values in terms of a base period. During the studied period, we can notice an increase in Austrias GDP.

2.

GDP/capita (US dollars) Year GDP/capita 2005 33897.444 2006 36073.984 2007 38367.54 2008 39889.113 Percent change 4.98 % 6.42 % 6.36 % 3.97 %

We can use the values of GDP/capita in order to compare Austria to the other countries:

3.

Real growth rate of GDP (percent changes) Percent change -3.34 % 46.30 % 3.61 % -41.57 %

Year GDP 2005 2.46 2006 3.599 2007 3.729 2008 2.179

Using the real growth rate of the GDP, we can analyze the economic development of a country. Studying the data above, we notice that between 2005 and 2008 there was a constant increase in the GDP, while in 2008 it dropped.

Even if this analysis is focused on 2005 and 2008, we must notice the sudden drop in GDP from 2009, when the Austrian Economy was seriously affected by the financial crisis.

4.

Gross fixed capital formation as % of GDP or investment ratio. Gross capital formation (% of GDP) Year 2005 22,54305864 2006 22,31801914 2007 23,16122708 2008 23,17850144

This indicator is defined as total gross fixed capital formation (GFCF) expressed as a percentage of GDP, for the private sector. GFCF consists of resident producers' acquisitions, less disposals, of fixed tangible or intangible assets, such as buildings, machinery and equipment, vehicles, or software. It also includes certain additions to the value of non-produced assets realized by productive activity, such as improvements to land. The ratio gives the share of GDP that is used by the private sector for investment (rather than being used for e.g. consumption). Analyzing the data provided above, we notice that the share of GDP used for investments has increased between 2005 and 2008.

5.

GDP by origin

Studying the GDP by origin, we can see that 69% comes from the tertiary sector, which is a characteristic of the developed countries.

6.

Expenditures on GDP

7.

Ten Economic Freedoms of Austria

Business Freedom Trade Freedom Fiscal Freedom Government Spending Monetary Freedom

72.8 87.6 50.3 28.0 82.9

Investment Freedom Financial Freedom Property Rights Fdm. from Corruption Labor Freedom

80.0 70.0 90.0 79.0 78.2

Austrias economic freedom score is 71.9, making its economy the 21st freest in the 2011 Index. Its score is 0.3 point better than last year. Austria is ranked 10th out of 43 countries in the Europe region, and its overall score is well above the regional and world averages.

Austrias international orientation and tradition of strong property rights are the backbone of its economic growth. The government has streamlined time-consuming regulations, and a comprehensive legal framework promotes competition. Foreign investment requirements are not particularly stringent, and the financial market facilitates entrepreneurial activity. The corporate tax regime is competitive, although individuals still face high tax rates and an onerous overall tax burden. Business Freedom 72.8 Austrias overall regulatory framework encourages business innovation and productivity growth. Lingering barriers to market entry have been eased in wholesale and retail trade. The administrative cost of launching a business remains burdensome. Trade Freedom 87.6 Austrias trade policy is the same as that of other members of the European Union. The common EU weighted average tariff rate was 1.2 percent in 2009. However, the EU has high or escalating tariffs for agricultural and manufacturing products, and its MFN tariff code is complex. EU-wide non-tariff barriers include agricultural and manufacturing subsidies, quotas, import restrictions and bans on some goods and services, market access restrictions in some services sectors, non-transparent and restrictive regulations and standards, and inconsistent regulatory and customs administration. There are additional restrictions on biotechnology and certain service sectors. Ten points were deducted from Austrias trade freedom score to account for non-tariff barriers. Fiscal Freedom50.3 Austria has a high income tax rate and a moderate corporate tax rate. The top income tax rate is 50 percent, and the top corporate tax rate is 25 percent. Other taxes include a value-added tax (VAT), a tax on insurance contracts, and a tax on real estate transfers. In the most recent year, overall tax revenue as a percentage of GDP was 42.9 percent. Government Spending28.0 is high even in comparison to other European countries. In the most recent year, total government expenditures, including consumption and transfer payments, equaled 49 percent of GDP. Stimulus spending drove public-sector debt to nearly 67 percent of GDP. Sustainability of the pension program and other social schemes is in jeopardy. Monetary Freedom 82.9
Austria is a member of the euro zone. Inflation has been roughly in line with the euro areas average and is forecast to be 1.6 percent1.7 percent for 20102011. As a participant in the EUs Common Agricultural Policy, the government subsidizes agricultural production, distorting the prices of agricultural products. It also subsidizes rail transportation and operates some state-owned firms, utilities, and services. Ten points were deducted from Austrias monetary freedom score to account for measures that distort domestic prices.

Investment Freedom80.0 For foreign investments, at least one manager must meet residency and other legal qualifications, and non-residents must appoint a representative in Austria. Foreign and domestic private enterprises may establish, acquire, and dispose of business interests, except in some infrastructure areas, utilities, and a few state monopolies. Environmental restrictions are strict, and many industries fall under a greenhouse-gas emissions trading system. There are no controls or requirements on current transfers, access to foreign exchange, or repatriation of profits. Real estate transactions are subject to approval by local authorities. Legal, regulatory, and accounting systems are transparent, but bureaucracy can be cumbersome and unpredictable. Expropriation is rare and requires special legal authorization. Financial Freedom70.0 Austria has one of the worlds most competitive banking systems. Banks provide a wide range of credit and financial services, credit is allocated at market terms, and domestic and foreign investors enjoy unrestricted access to capital markets. The five largest banking groups account for around 60 percent of total assets. Financial regulations are consistent with international norms. Foreign exchange is fully liberalized, and there are no limitations on crossborder transactions. The government has responded to banks exposure to troubled assets in Central and Eastern Europe with a deposit guarantee and capital injections. In December 2009, the government nationalized the Hypo Group Alpe Adria. Property Rights90.0 Private property is very secure. Contractual agreements are enforced, and the protection of intellectual property is well established. The rule of law is respected, and the judiciary is independent. Freedom From Corruption79.0 Corruption is perceived as minimal. Austria ranks 16th out of 180 countries in Transparency Internationals Corruption Perceptions Index for 2009. Bribery of an Austrian or foreign government official is subject to criminal penalties. In September 2009, the government amended and defined more precisely its criminal regulations against corruption to alleviate some measures viewed as too strict. Labor Freedom78.2 Relatively flexible labor regulations facilitate employment and productivity growth. However, the non-salary cost of employing a worker remains high, and the cost of fringe benefits per employee is among the EUs highest. There is no nationally mandated minimum wage.
(Source: The Heritage Foundation and the Wall Street Journal)

Chapter 3 The Austrian inflation rate during 2005-2008, the use of human resources and the social harmony

Austrian Inflation Rate The inflation rate in Austria was last reported at 3 percent in February of 2011. From 1990 until 2010, the average inflation rate in Austria was 1.99 percent reaching an historical high of 4.00 percent in June of 2008 and a record low of -0.40 percent in July of 2009. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy. This page includes: Austria Inflation Rate chart, historical data and news.

Austrian Unemployment Rate The unemployment rate in Austria was last reported at 4.3 percent in January of 2011. From 1993 until 2010, Austria's Unemployment Rate averaged 4.26 percent reaching an historical high of 5.40 percent in May of 2005 and a record low of 3.40 percent in September of 2000. The labour force is defined as the number of people employed plus the number unemployed but seeking work. The nonlabour force includes those who are not looking for work, those who are institutionalised and those serving in the military. This page includes: Austria Unemployment Rate chart, historical data and news.

Statistics on the labour market initially provide information about labour force supply and demand. Statistics on the labour force supply subdivide the population according to activity status (economically

actives, not economically actives). Results on employment and unemployment are for the most part available according to two different definitions: the Labour Force Concept (ILO definition), which can be used for international comparisons, and national definitions (employment that is subject to social insurance contributions and which is registered at the main social insurance organisation, or unemployed persons who are registered at the Austrian Public Employment Service).

-1) Employed persons according ILO-Definition (Labour-Force-Concept), without employed people living in institutions and without conscripts and people on community service. People on parental leave included as regards data on part-time (situation before parental leave), otherwise excluded. Data refer to main job unless otherwise stated. - 2) Part-time rate: part-time employment as a proportion of total employment. Part-time according answers to question on parttime. - 3) Volume of work in main and second job. - 4) Change in absolute numbers respecitvely in percentage points. During the studied period, we can notice a decrease in the number of working hours, combined with an increase of the volume of work. This directly influences the economic results of the country, as it is translated into a bigger added value.

Average gross annual earnings in industry and services Gross earnings are remuneration (wages and salaries) in cash paid directly to the employee, before any deductions for income tax and social security contributions paid by the employee. Data is presented for full-time employees in "industry and services". We can notice an increase of the average gross annual earnings during 2005-2008, as it follows:
39500 39000 38500 38000 37500 37000 36500 36000 35500 35000 34500 2005 2006 2007 2008 EUR

The GINI index Social stability (harmony) indicators: 1. Gini Coefficient or Gini Index (the percentage expression of the respective coefficient) measuring the inequality of income distribution in a country; The Gini index is a measure of income inequality. Zero means perfect equality (everyone has the same income) and 100 means perfect inequality (one person has all the income, everyone else has nothing).
26.5

GINI
26.0 25.5 25.0 GINI 24.5 2005 2006 2007 2008

By interpreting the GINI index for Austria, we can notice that the income is imperfectly distributed. However, the values under 30 indicate a large dispersion of incomes and, therefore, a lower social risk.

2005 credit debit net

2006 credit debit net

2007 credit debit net

2008 credit debit net

EUR million

Current account

154313

149004

5309 1047

170792

163534

7258

193124

183504

9620

199051

185294

13757

goods 96260 merchandise Exports and Imports as Recorded in the Foreign Trade Statistics 95086 Cif/Fob-adjustment other gap estimates repairs on goods 0 -2223 3398 96499 -815 -1934 3557 97306

106504

106173

331

118724

117426

1298

121511

122082

-571

1413 815 -289 -159

103742 0 137 2624

104201 -797 104 2665

-459 797 34 -41

114680 0 210 3834

114255 -953 157 3968

425 953 53 -134

117525 0 588 3398

119568 -996 170 3341

-2043 996 418 57

services transportation services by service of transport international passenger transport freight transport supporting and auxiliary services by means of transport, of which: sea transport air transport rail transport road transport inland waterway transport travel business travel expenditure by seasonal and border workers

34012 7347

24627 6975

9385 372

36377 8184

26658 8115

9719 69

39640 8804

28477 8844

11163 -40

43397 10226

29148 9320

14249 906

1796 4830 721

1417 5017 541

380 -187 180

1889 5447 848

1667 5740 708

222 -293 140

1845 6047 912

1652 6553 638

193 -506 273

1835 7433 958

1735 6888 697

100 545 260

384 2216 859 3294 67 12904 2314 295

842 2068 1171 2565 103 7506 1564 92 1472 5942 111 77 5754 662 510 680 486 195 615 98 67

-458 148 -312 729 -36 5399 750 203 547 4648 -104 205 4547 148 97 114 268 -154 158 -32 -56

464 2323 967 3945 60 13255 2433 295 2138 10822 8 282 10533 1128 772 772 768 4 600 75 11

966 2421 1326 3009 154 7641 1564 93 1472 6077 110 74 5893 898 686 612 214 398 872 101 72

-502 -98 -359 936 -94 5614 868 202 666 4745 -102 207 4640 229 87 160 554 -394 -272 -26 -61

504 2330 1042 4478 65 13641 2638 359 2279 11003 8 308 10687 1215 813 1001 995 6 956 85 12

1011 2345 1403 3597 192 7699 1642 116 1526 6057 125 83 5849 952 743 878 455 423 1250 120 82

-508 -15 -361 881 -127 5942 995 243 752 4946 -116 224 4838 262 70 123 540 -417 -294 -35 -70

534 2369 1035 5767 82 14677 2570 400 2170 12107 10 384 11713 1199 820 1167 1160 7 888 44 5

1095 2476 1371 3825 231 7721 1593 106 1487 6128 89 93 5946 909 700 1044 628 415 722 67 90

-561 -106 -336 1941 -149 6956 977 294 683 5979 -78 291 5766 290 120 123 532 -408 167 -23 -84

other business travel personal travel health-related expenditure education related expenditure other personal travel communication services of which telecommunication services construction services construction services abroad construction services in Austria insurance services life insurance and pension funding freight insurance

2019 10590 8 282 10301 810 607 795 754 41 772 67 11

other direct insurance reinsurance auxiliary services financial services computer and information services of which computer services royalties and license fees franchises and similar rights other royalities and license fees other business services, of which: merchanting other trade-related services operational leasing legal accounting, management and public relations services legal services accounting, auditing, bookkeeping and tax consulting services business and management consultancy and public relations sercies advertising, market research and public opinion polling

69 600 26 741 1001 892 315 x 315 8825 2029 645 312

31 401 18 599 762 603 1080 x 1080 5080 0 528 148

38 199 8 142 239 288 -765 x -765 3744 2029 117 164

66 420 27 636 1195 1038 427 13 414 9653 2273 535 331

39 641 19 487 858 716 1053 12 1040 5403 0 461 151

27 -221 8 148 337 322 -625 1 -626 4249 2273 73 179

75 747 36 1084 1331 1144 537 13 523 10436 2538 568 326

25 1005 17 530 1054 842 1072 11 1062 5493 0 443 171

50 -258 19 554 277 302 -536 3 -539 4943 2538 124 155

141 668 30 1072 1479 1222 624 19 605 11400 2774 579 334

21 527 16 500 1191 925 1100 16 1084 5905 0 533 170

120 140 14 572 287 298 -477 2 -479 5495 2774 46 164

701 x

505 x

195 x

671 163

581 151

90 12

666 161

611 187

55 -26

658 200

617 205

41 -5

52

51

58

67

-8

63

75

-12

x 569 research and development services architectural, engineering and other technical consultancy agricultural, mining and onsite processing other miscellaneous business, professional and technical services services between affiliated enterprises, n.i.e. personal, cultural and recreational services 191 audio-visual and related services education services health services other personal, cultural and recreational services 39 government services, n.i.e 311 69 14 69 1197

x 758 222

x -188 975

456 616 1428

379 811 260

77 -195 1168

447 762 1540

357 771 310

89 -9 1231

396 841 1467

337 839 379

59 2 1088

1489 x

512 x

977 x

1816 30

660 69

1156 -40

1818 28

739 65

1079 -37

2234 28

807 70

1427 -41

570 1270

989 1369 583 113 40 375 55 85

-419 -99 -392 -45 -25 -306 -16 226 1622 484 2106

554 1399 181 74 15 54 37 347

1063 1346 634 114 40 425 55 84

-509 54 -453 -39 -25 -370 -18 263 1479 378 1856

633 1557 201 57 12 95 37 436

930 1454 615 110 49 407 50 89

-297 103 -415 -53 -37 -312 -13 347

601 1883 248 58 16 129 45 418

933 1556 649 110 57 421 62 87

-332 327 -401 -52 -41 -292 -16 331

income 20830 compensation of employees investment income 19287 21393 1542 22452 1059

24541 1495 23046

26020 1118 24902

31169 1582 29588

32786 1158 31627

-1617 423 -2040

30372 1636 28737

28679 1314 27365

1693 321 1372

of which income direct investment excl. SPEs 7028 income direct investment distributed profit 3941 income direct investment reinvested earnings 3034 income direct investment other capital 53 of which income portfolio investment 7580 income portfolio investment equity securities 641 income portfolio investment long-term debt securities income portfolio investment money market instruments of which income other investment current transfers 3212 general government 711 other sectors of which workers remittances Capital account capital transfers nonfinancial assets 2500 320 2626 1992 647 4618 592 49 2206 698 891 -193 1768 1016 1265 -249 819 1291 -471 9781 14 40 2201 806 8871 854 11103 -48 2233 892 10586 1557 13647 -665 -3061 1251 10286 2036 14095 -785 -3808 3323 -288 5341 2983 2358 6376 3743 2633 1937 -2512 4449 4064 -123 2432 3518 7400 -371 8579 7355 1224 1086 11489 4221 9698 4398 1792 -177 8772 5584 4418 4894 4354 690

6795

9001

7930

9698

9095

11449

-2354

9321

12082

-2761

144 4679

188 4213

-45 466 1407 1915 508 -327

243 5530

514 5878

-271 -347 1314 1959 646 -336

475 7455

933 7929

-458 -474

146 9606

722 8852

-576 754

3371 684 2687 331

4685 2643 2041 667

3591 650 2941 340

4815 2560 2255 770

-1225 -1911 686 -431

3771 688 3083 354

5385 2650 2735 825

-1614 -1962 348 -471

595 552 43

784 728 56

-189 -176 -13

466 387 79

1268 1051 216

-802 -664 -137

747 664 83

547 330 217

200 334 -134

498 408 89

539 307 233

-41 102 -143

Source: OeNB, Statistics Austria. Final data up to 2008, revised data for 2009. last update on 07.10.2010 17:14

Poate fi pus si la anexa!

Subject Measure Frequency Time Country Austria 2005

Goods, balance in millions US-Dollar converted, Seasonally adjusted Annual 2006 2007 2008

-1120.616

992.8513

1907.949

-2004.523

data extracted on 17 Apr 2011 09:42 UTC (GMT) from OECD.Stat

From the table above we can observe fluctuations from an year to another, with a very high deficit in 2008 which is, most probably, caused by the world crisis. The highest magnitude

of the imbalance is in 2008, even higher than 2005 and we can say that the two comparable years have both negative imbalances.
Subject Measure Frequency Time Country Austria 2005 2006 Services, balance in millions National Currency, Seasonally adjusted Annual 2007 2008

9394.399

9719.616

11147.56

14223.19

data extracted on 17 Apr 2011 09:48 UTC (GMT) from OECD.Stat

Regarding the services, the balance reflects a positive imbalance and the fluctuations are smaller than goods case. The highest value is in 2008 and we can forecast higher values in the upcoming years because of Austrias focusing on premium services. This might be the result of having high deficits in goods balance. Also regarding goods, we can estimate if the acceptance level of imbalance, in this case positive. For this fact, we must analyze the services as percent of GDP.

Subject Measure Frequency Time Country Austria

Services, balance in millions Percentage of GDP Annual 2005 2006 2007 2008

3.864094

3.78409

4.10381

5.052164

data extracted on 17 Apr 2011 10:00 UTC (GMT) from OECD.Stat

What is notable is that the maximum level of 5% is overtaken only in 2008 and by a small value of 0.05% but the focusing on services in this year is obvious. As forecast, we can estimate higher levels of relative significance of imbalance until the balance in goods will have lower fluctuations and a level of acceptance between 0 and 5%. In 2005, the main merchandise groups were, in order: - Boilers, machinery; nuclear reactors, etc. with an absolute value of exports of 20 mil.$ and imports of 16 mil. $; - Vehicles other than railway, tramway with an absolute value of exports of 14 mil. $ and imports of 13 mil. $; - Electrical, electronic equipment with an absolute value of exports of 13 mil. $ and imports of

12 mil.$; Comparative to 2005, the year 2008 maintained the main merchandise groups with even higher levels of exports/imports: 31 mil $ and 24 mil $ for the first group, 18 mil. and 16 mil. for the second one and 17 mil. for both imports and exports(with a small difference) for the third one. The growth in exports and imports in 2008 was 14%, respectively 13%, but the net trade indicator was affected by high imports in mineral fuels, oils and distillation products, which is much higher than 2005.The exports/capita were 544 $ in 2009 for the main merchandise group and 522 $ in 2005. The main partner countries are the ones in EU but Switzerland has also a very important place in trading with Austria, having around 5 mil. $ values in merchandise trade. As for the services, the commercial trade is based on transportation and travel with values of 20 mil. $ in exports and 29 mil. in imports.
Austrian Direct Investment Abroad (active)

2005

2006

2007

2008

Transactions in EUR million

Direct investment including SPEs and real estate1) excluding SPEs2) excluding real estate Direct investment excluding SPEs and real estate Equity capital1) Disinvestment New investment Reinvested earnings Other capital Assets Liabilities Direct investment excluding SPEs and real estate (total capital) broken down by target area Europe EU-27 EU-15 Euro area 16 Central and Eastern Europe3) Belgium Germany Denmark

net -62819 net net net -8962 net credit debit net net net net -5056 1740 6796 -3034 -872 -598 -275 -10897 -5328 9669 14998 -5341 -228 -632 404 -28513 -23580 5919 29498 -6376 1443 -523 1965 -20106 -14484 5087 19570 -1937 -3685 -3148 -538 -53395 -462 -6891 4274 -267 -51089 -22409 -167 -20008 229 -132

-8690 -5575 -2208 -2127 -5115 -4 -1128 -242

-10212 -7299 -2737 -2559 -6047 333 443 -316

-25521 -11585 -2091 -5772 -16736 -1035 -1512 -472

-17625 -11224 -5699 -6480 -10654 -987 -2588 19

Spain Finland France United Kingdom Greece Ireland Italy Luxembourg Netherlands Portugal Sweden Bulgaria Cyprus Czech Republic Baltic countries Hungary Malta Poland Romania Slovenia Slovakia Switzerland Liechtenstein Norway Bosnia and Herzegovina Croatia Montenegro Macedonia Serbia Russia Ukraine Turkey

-97 3 -21 -406 -21 -13 -144 -40 -97 -53 54 -909 -106 -504 -33 -382 -6 -375 -652 -234 -167 -903 -42 -3 -111 -571 0 -4 -175 22 -989 -8 -54 -138 -154 74 5 -62 -58 -162 -20 -142 -110 -4 3 -8 -9

-164 -65 75 -487 -30 28 -1091 -149 -913 -3 -400 -191 -364 -1173 -67 -758 -48 3840 -5189 -204 -407 319 2 -52 -255 23 -14 -184 -422 -1212 205 -882 -95 -91 -230 13 159 -34 -21 -495 -28 -467 -189 -46 -5 -7 12

-133 -37 -466 1030 -31 61 -63 -311 886 -46 39 -1573 -1951 -1206 -123 -1731 -110 -447 -1329 -243 -780 -1100 -5 31 -203 -5205 -14 -4 -504 -2719 -538 -3248 32 -752 -240 -211 -143 -159 -103 -2124 -88 -2036 -182 -34 -9 -30 16

266 -24 -209 29 -158 -55 -527 -207 -1149 -43 -67 -1064 -193 -1376 -68 -950 -160 -286 -980 -374 -73 -203 -69 1 -231 -726 -22 -87 -370 -1601 -2262 -196 75 -1089 -235 -408 -301 -145 -100 -1137 -128 -1009 -163 -37 -33 -5 -31

Africa America U.S.A Canada Central America South America Brazil Asia Middle East Other Asian countries China Hong Kong India Japan South Korea

Singapore Thailand Oceania

1 -4 82

-98 5 -69

-24 -10 -155

-191 -10 -310

Source: OeNB. Final data up to 2008, revised data for 2009, provisional data for 2010. 1) Outward flows: (-) Increase / (+) decrease of Austrian direct investment abroad. 2) Special purpose entities without significant activity in Austria. 3) Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Poland, Romania, Russian Federation, Serbia, Slovakia, Slovenia, Ukraine. last update on 23.12.2010 17:40

Regarding investment in other countries we can observe that the main directions are the EU countries, especially Ukraine. The direct investment abroad in 2008 is lower than 2005 and this can be explained by the economic crisis and high deficit, illustrated above.
Foreign Direct Investment in Austria (passive)

2005

2006

2007

2008

Transactions in EUR million

Direct investment including SPEs and real estate1) excluding SPEs2) excluding real estate Direct investment excluding SPEs and real estate Equity capital1) New investment Disinvestment Reinvested earnings Other capital Assets Liabilities Direct investment excluding SPEs and real estate (total capital) broken down by home country

net 62681 net net net 8672 net credit debit net net net net 6839 9862 3023 3323 -1490 27 -1518 6324 444 4417 3972 2983 2896 -211 3108 22762 4258 22316 18058 3743 14761 -1043 15804 53566 444 3225 -3203 104 45607 22843 2

Europe EU-27 EU-15 Euro area 16 Central and Eastern Europe3) Belgium Germany

7898 7079 6951 6789 260 -149 3815

6553 6895 6842 7048 -39 -106 3932

18948 19002 17349 16271 111 1468 -8164

Denmark Spain Finland France United Kingdom Greece Ireland Italy Luxembourg Netherlands Portugal Sweden Bulgaria Cyprus Czech Republic Baltic countries Hungary Malta Poland Romania Slovenia Slovakia Switzerland Liechtenstein Norway Bosnia and Herzegovina Croatia Montenegro Macedonia Serbia Russia Ukraine Turkey

45 72 72 191 134 -3 -5 2189 720 -205 89 -14 97 -5 -5 7 24 2 4 -2 3 2 647 21 26 0 5 0 0 1 74 50 2 317 362 347 29 -17 4 3 90 108 -18 0 -20 -2 1

-670 735 39 52 472 -1 111 910 550 732 -2 92 -1 89 14 1 -13 -1 2 -47 7 1 -467 8 -13 0 -4 0 0 -1 35 -20 17 52 -565 -1570 -17 1007 15 -5 273 186 87 -8 0 -5 57

-153 -75 132 -249 2906 -1 1405 10861 3746 5544 -37 -34 -27 1628 -17 3 21 18 12 21 -6 1 1139 13 -202 1 -7 0 0 1 124 -15 26 -77 2820 2878 3 -86 25 31 313 95 217 14 113 79 2

173

762

-26

-105

2971

-1253

2448

-1822

-756

-317

-1

50

-14

31

-14

31

48

-887

16

-5

-9

-171

-12

26

Africa America U.S.A Canada Central America South America Brazil Asia Middle East Other Asian countries China Hong Kong India Japan

450

-1359

-1435

64

11

373

222

151

-7

39

-52

95

South Korea Singapore Thailand Oceania

0 8 -4 5

0 37 -2 9

3 -2 0 20

82

-2

32

Source: OeNB. Final data up to 2008, revised data for 2009, provisional data for 2010. 1) Inward flows: (+) Increase / (-) decrease of foreign direct investment in Austria. 2) Special purpose entities without significant activity in Austria.

The foreign investment in Austria has the opposite trend, with high values in 2005 and a decrease of 73% in 2008. The source of investment is, in both years, Germany but with very high fluctuations during this interval. Despite this fact, the investment made by Germany in Austria is pretty much the same in 2008, compared to 2005 with around 3800 mil Euros. In terms of external debt, Austria had very low levels until 2006 and, suddenly, the had a rose of 3194% in 2006 and became stable until 2008. The economic crisis caught Austria with a change of 26.62% in external debt and a value of 752 billion $.

http://www.indexmundi.com/austria/debt_external.html Austria can be defined in 10 phrases like the ones below: 1. Only individuals choose. 2. The study of the market order is fundamentally about exchange behavior and the institutions within which exchanges take place. 3. The facts of the social sciences are what people believe and think. 4. Utility and costs are subjective. 5. The price system economizes on the information that people need to process in making their decisions.

6. Private property in the means of production is a necessary condition for rational economic calculation. 7. The competitive market is a process of entrepreneurial discovery. 8. Money is nonneutral. 9. The capital structure consists of heterogeneous goods that have multispecific uses that must be aligned. 10. Social institutions often are the result of human action, but not of human design.

Tourism is a major sector of the Austrian economy (15 percent of GDP, 30 per cent with all associated activities; 18 per cent of all export receipts). The importance of the environment for tourism in Austria is reflected in many strategies within tourism policy, by government entities as well as by the private sector. For about 15 years, Austria has shown continuous progress in making its tourism sector more environmentally friendly. A wide range of measures has been adopted to move from quantitative growth to qualitative growth in the tourism industry. This was facilitated by the fact that environmental quality is a major sales factor for Austrian tourism. The measures relate to, inter alia, the management of tourism-related traffic, ecolabelling, "green" villages, land use, codes of practice and the rapid expansion of protected areas. In many respects (e.g. water quality improvement), progress has been sustained and very impressive. Agriculture may be detrimental to the environment if farming practices reflect only individual economic needs of producers. On the other hand, sustainable farming methods contribute positively to tourism development, for example by maintaining settlements in remote areas and protecting landscape and amenities, especially in mountain areas. It is therefore recommended that consideration be given to the following proposals: rapidly move towards the early implementation of the tourism measures in the National Environmental Plan when it is adopted; continue efforts to influence tourism demand patterns and to reduce the temporal and spatial concentration of the demand for tourism services; strengthen institutions and efforts for comprehensive and coherent territorial planning and land use planning, including implementation of the guidelines on sustainable territorial development at local level; consider increased use of economic instruments for reducing further the environmental impact of tourism; continue efforts to contain the negative effects of tourist transport and develop regional traffic concepts for the improved co-ordination of public transport; improve the information base on tourism and environment, working towards greater harmonisation of definitions (e.g. for biotope mapping) and management criteria across provinces, in particular in the field of nature protection; develop an overall plan for national parks in Austria, and continue efforts to create more national parks.