The Austrian economy has benefited substantially from the expansion of economic ties with Central and Eastern
Europe, which has provided a significant boost to growth, productivity, competitiveness, profits and (more
controversially) aggregate employment. Indeed, among the older EU member states, Austria has benefited the most
from the transition of the Central and Eastern European countries from planned economies to market economies, and
the subsequent entry into the EU of the ten new member states, mostly from Central and Eastern Europe, in 2004.
However, important segments of the population in Austria, and in particular low-skilled and semi-skilled workers in
the manufacturing sector, appear to have been adversely affected by these developments. There is thus a need for
policy measures to help those segments of the workforce that have had difficulty coping with growing competition
from Central and Eastern Europe. Furthermore, more can be done to make Austria a more attractive location for
highly skilled and well qualified expatriate workers and to maintain Vienna’s position as a central hub for
multinationals operating in the region. These include, in particular, the need to strengthen eastern transportation links
and to reduce to a minimum bureaucratic hurdles and red tape for foreign enterprises seeking to operate out of
Vienna.
