After the latest EU statistics showed that Austria has the bloc's lowest jobless rate, experts pointed to the country's strong ties with booming Germany and its flexible labour policies as reasons for its success. In June, 4 percent of the workforce were looking for work in Austria, trailed by the Netherlands, Luxembourg and Germany. The average in the European Union was 9.4 percent.
The Social Affairs Ministry said earlier this week that the number of jobless had fallen again slightly in July, the 17th monthly decrease in a row. The small country's export-oriented economy has been profiting from the strong growth of its big neighbour Germany, economists said.
"Germany has once again taken on the role of Europe's growth motor," said Ulrich Schuh, a senior labour economist at the IHS research institute in Vienna. "Austria supplies Germany's export industry," he added. Germany is Austria's most important trade partner by far, with 31.6 percent of Austria's exports going to its northern neighbour last year.
In July, Austria's unemployment sank the most in manufacturing, construction and retail, the three sectors that were hit hardest in the 2009 economic crisis. Experts said that the country's "social partnership" system of non-confrontational relations between employers, unions and the government had carried the economy through these tough times.
"It's about pulling together, finding a consensus and coming up with common solutions," said Hedwig Lutz, a researcher at the Wifo economic institute in Vienna. For example, many companies cut working hours during the crisis to lower costs and protect jobs, a move that was accepted by workers and supported financially by the government in one of its crisis packages.
"Austrian politicians reacted very fast and very comprehensively," Lutz said. "This stabilises expectations and promotes investments," leading to job creation, she explained. Lutz and other experts also pointed to the flexible labour law that helps to keep the jobless rate low. It allows companies to let go workers more easily than in other EU countries, and therefore provides an incentive to hire more quickly once the economy returns to growth.
But amid falling unemployment and the steady creation of jobs, the economists warned that things would not stay as rosy in coming months. "You can detect the first signals that growth is slowing down," said Wolfgang Alteneder at Synthesis, a social policy think tank in Vienna. Government spending cuts would lead to lower private consumption, he said.
As long as Austria is still the EU's star pupil when it comes to labour, other countries might think about copying some of its policies. However, some of the economists interviewed said it would be difficult to transplant policies and historically grown concepts like Austria's social partnership to other countries. "A measure that was very successful in one context could backfire in another context," Lutz said.
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