Demands for the distribution of more state funds are currently booming in Austria. More money is to be distributed all the time, first because of the corona restrictions, now because of the inflation crisis. At the same time, discussions are raging about price caps that are as inefficient as they are expensive.
Austria is already in third place within the EU in terms of government spending in relation to economic output, as calculations by the Viennese think tank Agenda Austria now show. Only France and Greece were able to show even higher rates last year. Measured in absolute figures, government spending has almost doubled over the past 20 years from EUR 113.3 billion to EUR 225.7 billion. With inflation around 45 percent.
“In Austria, the government ratio, i.e. government spending as a percentage of GDP, has grown by 4.5 percentage points over the past 20 years. Corona aid recently played a large part in this,” explains Agenda Austria economist Marcell Göttert. Austria is not alone in this. Almost all states have increased their government spending during this period.
Only five countries have reduced their government spending in the past 20 years. Including the Scandinavian countries Denmark and Sweden. “Austria must ask itself which countries it would like to orient itself towards. Are we following France, Greece and Italy? Or do we rather see our role models in the Danes and Swedes?” concluded Göttert.