10.6092/issn.1561-8048/15683
Austria’s recovery and resilience plan (RRP) was officially adopted by the Council on 13 July 2021. While its main focus lies on implementation of the so-called ‘green’ and ‘digital transitions’, the Austrian RRP also contains a number of reforms and investments that directly impact the labour market. The goal of this article is to explore these implications and put them in the context of the European Pillar of Social Rights and the annual country-specific recommendations issued by the European Commission.
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Italian Labour Law e-Journal
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National Recovery and Resilience Plan: Austria
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2022-11-03
2022-10-29
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2022-11-03
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Verena Vinzenz
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National Recovery and Resilience Plan: Austria
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    National Recovery and Resilience Plan:                                          Italian Labour Law e-Journal
    Austria                                                                        Special Issue 1, Vol. 15 (2022)
    Verena Vinzenz                                 The NextGeneration EU in Action: Impact on Social and Labour
    verena.vinzenz@uni-graz.at                                                                            Policies
                                                                                                 ISSN 1561-8048
                                                                  https://doi.org/10.6092/issn.1561-8048/15683




           National Recovery and Resilience Plan: Austria
                         Verena Vinzenz


                                                  Abstract

     Austria’s recovery and resilience plan (RRP) was officially adopted by the Council on 13 July
     2021. While its main focus lies on implementation of the so-called ‘green’ and ‘digital transitions’,
     the Austrian RRP also contains a number of reforms and investments that directly impact the
     labour market. The goal of this article is to explore these implications and put them in the
     context of the European Pillar of Social Rights and the annual country-specific
     recommendations issued by the European Commission.

     Keywords: NGEU, Austrian RRP, Covid-19 pandemic, European Pillar of Social Rights, Social
     Scoreboard, Country-specific recommendations, European Semester.




1. Austria’s position on NextGenerationEU.

   Austria, together with Denmark, the Netherlands and Sweden, made up the so-called
“frugal four”, an informal grouping of fiscally conservative Member States. The “frugal four”
advocated for tight fiscal policies and against a large distributive European budget and
collective EU debt. As might have been expected, the implementation of the
NextGenerationEU (NGEU) recovery plan was initially controversial in Austria. For
instance, on 17 June 2020 then finance minister Gernot Blümel reiterated the Austrian federal
government’s rejectionist stance. He found the plans insufficiently precise and feared they
would result in a disproportionate burden on Austrian taxpayers. In contrast, a number of
other political parties in the Austrian parliament – namely the Social Democratic Party of
Austria (SPÖ), the New Austria and Liberal Forum (NEOS) and the Greens – made an





  University Assistant (post-doc) at the Institute of Labour and Social Security Law, University of Graz
(Austria).

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    Verena Vinzenz                                                              Italian Labour Law e-Journal
                                                                               Special Issue 1, Vol. 15 (2022)
                                                                 The NextGeneration EU in Action: Impact on
                                                                                   Social and Labour Policies




immediate and clear commitment to a “united Europe based on solidarity”, supporting
NGEU from the outset.1
   On 1 July 2020, German ambassador to Austria Ralf Beste presented a set of adapted
plans issued by the European Council regarding NGEU to the EU Committee of the
Austrian Federal Council (Bundesrat). The councillors welcomed this proposal, especially the
humanitarian aid it included, and hoped for its rapid implementation.2 Based on these
adapted plans, on 9 July 2020 then Austrian Prime Minister Sebastian Kurz declared his
general approval of all European measures planned in response to the economic
consequences of the Covid-19 pandemic. Much like Finance Minister Blümel, however, he
also stated that a very firm commitment was necessary to ensure that conditionalities be
attached to the disbursement of funds, that the relationship between grants and loans be
sufficiently balanced, and repayment clarified.3 Caroline Edstadler, at the time Minister for
the EU and the Constitution, declared that Austria was prepared to make a “solidarity
contribution” within the framework of NGEU in order to emerge from the Covid-19 crisis.
She also specified, however, that all measures adopted by the European Union would have
to be short-term and clearly conditional. An approach under which Member States would be
held liable for debts of other Member States would not be supported.4
   Austria formally submitted its national RRP on 30 April 2021, and on 21 June 2021 the
European Commission gave the green light.5 The RRP was officially adopted by the Council
on 13 July 2021.


2. The Austrian RRP: the green and digital transitions.

   Austria originally requested a total amount 3.46 billion euros (€) in grants (but no loans).6
   As part of the allocations within the RRP is based on current economic data (as laid out
in the updated Eurostat outturn data), the maximum financial contribution was revised
upwards on 30 June 2022, so that Austria will now receive a total of €3.75 billion in grants.7



1 Parliamentary Correspondence PK0628,
https://www.parlament.gv.at/PAKT/PR/JAHR_2020/PK0628/index.shtml, accessed 15 July 2022.
2 Parliamentary Correspondence PK0722,

https://www.parlament.gv.at/PAKT/PR/JAHR_2020/PK0722/index.shtml, accessed 15 July 2022.
3 Parliamentary Correspondence PK0781,

https://www.parlament.gv.at/PAKT/PR/JAHR_2020/PK0781/index.shtml, accessed 15 July 2022.
4 Parliamentary Correspondence PK0768,

https://www.parlament.gv.at/PAKT/PR/JAHR_2020/PK0768/index.shtml, accessed 15 July 2022.
5 European Commission, Press release IP/21/3052, Next Generation EU: European Commission endorses Austria’s

recovery and resilience plan, https://ec.europa.eu/commission/presscorner/detail/en/ip_21_3052, accessed 15
July 2022.
6 Recovery and Resilience Scoreboard, https://ec.europa.eu/economy_finance/recovery-and-resilience-

scoreboard/country_overview.html?lang=de, accessed 15 July 2022.
7 Commission note to the Council and European Parliament, RRF: Update of the maximum financial contribution,

https://ec.europa.eu/info/sites/default/files/2022_06_30_update_maximum_financial_contribution_rrf_gra
nts.pdf, accessed 15 July 2022.

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    Verena Vinzenz                                                                      Italian Labour Law e-Journal
                                                                                       Special Issue 1, Vol. 15 (2022)
                                                                         The NextGeneration EU in Action: Impact on
                                                                                           Social and Labour Policies




   The European Commission has already disbursed €450 million in a pre-financing
payment.8
   The Austrian RRP focuses on four broad areas of relevance (or components), namely (1)
Sustainable recovery, (2) Digital recovery, (3) Knowledge-based recovery, and (4) Just
recovery.9 These four components are further divided into 16 subcomponents, which include
59 measures, 27 reforms and 32 investments, as well as 106 milestones and 65 targets.


    Component                                                                          Costs (EUR million)
    1. Sustainable recovery
    1.A Renovation wave                                                                209
    1.B Eco-friendly mobility                                                          849
    1.C Biodiversity and circular economy                                              350
    1.D Transformation to climate neutrality                                           100
    2. Digital recovery
    2.A Broadband expansion                                                            891
    2.B Digitalisation of education                                                    172
    2.C Digitalisation of the public administration                                    160
    2.D Digitalisation and ecological transformation of businesses                     605
    3. Knowledge-based recovery
    3.A Research                                                                       212
    3.B Reskilling and upskilling                                                      277
    3.C Education                                                                      129
    3.D Strategic innovation                                                           250
    4. Just recovery
    4.A Health                                                                         125
    4.B Resilient municipalities                                                       104
    4.C Arts and culture                                                               67
    4.D Resilience through reforms                                                     0




2.1. Main reforms and investments.

   The main focus of the Austrian RRP lies with the so-called green transition, as 59 per cent
of the plan supports climate objectives. As pointed out by the European Commission,
Austria’s challenges regarding the green transition include the need “to improve the pricing
of greenhouse gas emissions, reduce transport-related emissions and making the building
sector more energy-efficient, all while taking account of regional economic implications and

8 European Commission, NextGenerationEU: European Commission disburses € 450 million, Press Release, Brussels,
28 September 2021, https://ec.europa.eu/commission/presscorner/detail/en/ip_21_4067, accessed 15 July
2022.
9 General Secretariat of the Council, Annex to the Council Implementing Decision on the approval of the assessment of the

recovery and resilience plan for Austria, 2021/0162 (NLE), 1.

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     Verena Vinzenz                                                               Italian Labour Law e-Journal
                                                                                 Special Issue 1, Vol. 15 (2022)
                                                                   The NextGeneration EU in Action: Impact on
                                                                                     Social and Labour Policies




cohesion”.10 The flagship initiative contained in component 1 of the Austrian RRP is an eco-
social tax reform, which introduces a price for CO2 emissions on fossil energy sources and a
climate bonus. Another principal goal, towards which 53 per cent of the reform plans are
directed to, is the digital transition.11 The European Commission named a number of specific
digital challenges for Austria, including “the need to improve the population’s basic digital
skills, adopting digital technologies, especially in smaller companies and widening very high
speed broadband coverage”. Measures included in component 2 of Austria’s RRP are
intended to address these issues, namely by investing €891 million in fast internet
connections or providing digital end devices, such as tablets, to all Austrian high school
students.12 Lastly, the Austrian RRP aims to reinforce economic and social resilience.13
Austria defined the need to make taxes more efficient and more supportive of inclusive and
sustainable growth as one of its key macroeconomic challenges. Therefore, the Austrian RRP
includes investments and reforms in the areas of education and skills, health care, business
environment, and research and innovation. The beacon project presented by the Austrian
government in this area of focus is the so-called “one-stop shop for the long-term
unemployed”.14


2.2. Impact of the reforms on the labour market.

    Reforms with a likely impact on the labour market are included primarily in component
3 (Knowledge-based recovery), more precisely in subcomponent 3.B, entitled “reskilling and
upskilling”.
    This subcomponent aims to address the labour market integration of low skilled workers
by reskilling and upskilling, in order to prepare for future challenges. Therefore, the first
reform directly related this goal is the so-called “education bonus”. This measure consists of
a “top-up”, that is, an additional payment on top of the unemployment benefits provided by
the Austrian Unemployment Insurance Act (AlVG). The education bonus aims to reduce
the risk of participants dropping out of school without qualifications. The education bonus
is considered a “milestone”, and Austria defines the provision’s entry into force as its main
qualitative indicator.
    Austria has already achieved this milestone with the implementation of the education
bonus in sec 20 of the Austrian Unemployment Insurance Act,15 the reform having entered

10  European Commission, Austria’s recovery and resilience plan – overview, https://ec.europa.eu/info/business-
economy-euro/recovery-coronavirus/recovery-and-resilience-facility/austrias-recovery-and-resilience-
plan_en, accessed 15 July 2022.
11 Ibidem.
12 https://www.bundeskanzleramt.gv.at/eu-aufbauplan/projekte/notebooks-und-tablets-fuer-digitales-

lehren-und-lernen.html, accessed 15 July 2022.
13 European Commission, nt. (10).
14 Ibidem.
15 BGBl I 2021/158,

 https://www.ris.bka.gv.at/Dokumente/BgblAuth/BGBLA_2021_I_158/BGBLA_2021_I_158.html,
accessed 15 July 2022.

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     Verena Vinzenz                                                                   Italian Labour Law e-Journal
                                                                                     Special Issue 1, Vol. 15 (2022)
                                                                       The NextGeneration EU in Action: Impact on
                                                                                         Social and Labour Policies




into force on 31 December 2021. According to sec 20 para 7 of the Austrian Unemployment
Insurance Act, the education bonus consists of €4 per day if a training measure was
commissioned by the Public Employment Service and its duration is at least four months. In
order to ensure the effectiveness of the measure, Austria set a target, namely for 40,000
people to receive the education bonus by Q4 2021. Subcomponent 3.B also contains an
investment, the so-called “promotion of reskilling and upskilling” (3.B.2). Again, it is aimed
specifically at already unemployed people and “consists of funding of reskilling and upskilling
measures related to basic qualifications, electronics and digital technologies, nursing, social
and caring professions, environment/sustainability, project oriented transitional workplaces,
as well as youth coaching”.16 The investment concentrates on offering flexible training
methods and focuses directly on supporting women. Implementation of the investment is
divided into a milestone – consisting solely of annual reports – to be completed by Q1 2022,
and a target, namely a total of 94,000 people who are supposed to benefit from the re- and
upskilling measures by Q4 2024.17 The estimated costs for both measures contained in
subcomponent 3.B total €335.6 million, of which the European Union has agreed to bear
€227 million.18
   Subcomponent 3.C (“education”) contains one investment directly relevant to the labour
market (3.C.3). This investment focusses on strengthening elementary education and
expanding childcare facilities. The Austrian government found that there is a need for
improvement as the Barcelona goal (namely that 33 per cent of all three-year old children
should have access to childcare) has not been met.19 The objective of the investment is thus
to expand the provision of child-care facilities, particularly for the under threes, and to extend
hours for three - to six years old to facilitate the reconciliation of work and family life. The
Austrian government also stated that the expansion of elementary education and child-care
facilities is crucial for improving the compatibility of family life and work. The investment
contains two targets. The first is to improve child-care rates for children under three years
of age by 1 percentage point per Land and year, with a total increase of 5 percentage points
by Q4 2023; and the second is to increase the rate of early childhood education for children
aged three to six by Q4 2023. The estimated amount needed to realize this goal is €142.5
million, of which the RRF will fund €28.4 million.20
   Component 4 (Just Recovery) also includes a number of reforms and investments that
are of particular importance for the labour market and central to ensuring social
protection/welfare. Firstly, subcomponent 4.B, which is entitled “resilient municipalities”,

16 Council of the European Union, Annex to the Council Implementing Decision on the approval of the assessment of the
recovery and resilience plan for Austria, 10159/21 ADD 1, 54.
17 Council of the European Union, Annex to the Council Implementing Decision on the approval of the assessment of the

recovery and resilience plan for Austria, 10159/21 ADD 1, 57.
18 Federal Ministry of Finance, Österreichischer Aufbau- und Resilienzplan 2020–2026 [Austrian RRP 2020-2026], 1;

Federal Ministry of Finance, Anhang zum Österreichischen Aufbau- und Resilienzplan 2020–2026 [‘Annex to the
Austrian RRP 2020–2026'], 348 f. See https://www.oesterreich.gv.at/nachrichten/allgemein/EU-
Aufbauplan.html for both documents.
19 Federal Ministry of Finance, Anhang zum Österreichischen Aufbau- und Resilienzplan 2020-2026 [‘Annex to the

Austrian RRP 2020–2026’], 375.
20 Ibidem, 11.



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     Verena Vinzenz                                                                    Italian Labour Law e-Journal
                                                                                      Special Issue 1, Vol. 15 (2022)
                                                                        The NextGeneration EU in Action: Impact on
                                                                                          Social and Labour Policies




contains nothing less than an Austrian government commitment to further develop care
provision, especially long-term care (reform 4.B.2). The reform is intended to serve as
preparation for a long-term care reform starting in 2024,21 as Austria is faced with an ageing
demographic, which will increase the utilisation of nursing and care services over the coming
years. Therefore, the RRP focusses mainly on preparatory steps for this upcoming long-term
care reform with the establishment of a “care taskforce”. As a consequence, no funds were
requested for the reform.22
    Finally, subcomponent 4.D, which is entitled “resilience through reforms”, contains two
measures directed at increasing equal treatment between women and men. Reform 4.D.2.
aims to increase the effective retirement age by reducing incentives for early retirement. It
introduces the so-called “early starter bonus”, which provides that people will receive €1 on
top of their actual pension for each month that they worked between the ages of 15 and 20,
or up to €60 per month or up to €840 per year (assuming the thirteenth and fourteenth salary
is included).23 With this reform, Austria addresses a country-specific recommendation (CSR)
on addressing pension system sustainability (see below). The early starter bonus, as laid out
in sec 262a General Social Security Act (ASVG), entered into force on 1 January 2022. The
second reform contained in this subcomponent is so-called “pension splitting” (reform
4.D.3). The reform aims to “mitigate the effect of interrupted employment histories e.g. due
to childcare responsibilities, on old-age pension rates”,24 and consists of the introduction of
automatic pension splitting for couples with children. In addition, voluntary pension splitting
will also be available for every form of partnership and regardless of parenthood. Lastly,
subcomponent 4.D also introduces reform 4.D.10, the so-called “labour market one-stop
shop” mentioned above. The objective of the measure is to provide targeted support for
bringing long-term unemployed facing multiple barriers back into the labour market. The
coordinated support is expected to help to address those multiple barriers and facilitate
access to qualifications and training. The one-stop shop will be set up in close cooperation
with the social partners and the Länder, and should coordinate and facilitate access to the
appropriate services of different support institutions. For both measures included in
subcomponent 4.D, Austria has requested no grants from NGEU.




21 Council of the European Union, Annex to the Council Implementing Decision on the approval of the assessment of the
recovery and resilience plan for Austria, 10159/21 ADD 1, 75.
22 Federal Ministry of Finance, Anhang zum Österreichischen Aufbau- und Resilienzplan 2020–2026 [‘Annex to the

Austrian RRP 2020–2026’], 492.
23 Federal Ministry of Finance, Anhang zum Österreichischen Aufbau- und Resilienzplan 2020–2026 [‘Annex to the

Austrian RRP 2020–2026’], 565.
24 Council of the European Union, Annex to the Council Implementing Decision on the approval of the assessment of the

recovery and resilience plan for Austria, 10159/21 ADD 1, 89.

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     Verena Vinzenz                                                                 Italian Labour Law e-Journal
                                                                                   Special Issue 1, Vol. 15 (2022)
                                                                     The NextGeneration EU in Action: Impact on
                                                                                       Social and Labour Policies




3. Social and labour dimensions in the RRP.

3.1 Assessment by the European Commission.

   The European Commission assessed Austria’s RRP based on 11 criteria set out in the
Regulation.25 For instance, the European Commission had to assess whether the measures
adopted have a lasting impact; whether the challenges identified in the country-specific
recommendations were addressed by the measures; or whether the milestones and targets
were clear and realistic.26 The European Commission’s assessment thus resulted in a rating
of the individual criteria. All criteria were rated A, except for criterion 2.9, which was rated
B.27 Overall, the European Commission found that the Austrian RRP “represents a
comprehensive and adequately balanced response to the economic and social situation of
Austria, thereby contributing appropriately to all six pillars referred to in the RRF
Regulation”.28
   On 23 May 2022, the European Commission published its annual Country Report for
Austria, in which it took stock of the implementation of the Austrian RRP. It also assessed
Austria’s progress with implementing the European Pillar of Social Rights and achieving the
EU headline targets on employment, skills and poverty reduction (the so-called “social
scoreboard”). Regarding the RRP, the Commission summarised that Austria is making
progress especially in implementing reforms contained in components 1 and 2 of the RRP,
therefore focusing on green investments and reforms. The introduction of a CO2 price or
the launch of a nationwide flat-rate public transport ticket was explicitly highlighted by the
Commission. Also, a number of “key deliverables” were outlined that should be
implemented within the next 12 months, such as the provision of broadband access to 46
per cent of households.29 The European Commission also found, however, that Austria will
face a number of additional challenges not sufficiently covered in the RRP. Among these,
long-term care is explicitly mentioned. The Commission calculated that the cost of long-term
care is expected to soar by up to 30 per cent within the next eight years. While a
comprehensive reform of the long-term care system was announced well before the Covid-
19 pandemic, its implementation is still pending. The Commission also addressed the fact
that Austria’s healthcare and pension systems are facing permanent structural challenges




25 Regulation 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the
Recovery and Resilience Facility, L 57/17.
26 European Commission, Questions and answers: European Commission endorses Austria’s recovery and resilience plan,

Questions and answers, Brussels, 21 June 2021,
https://ec.europa.eu/commission/presscorner/detail/en/QANDA_21_3122, accessed 15 July 2022.
27-Summary       of   the    assessment      of    the    Austrian    recovery      and      resilience      plan,
https://ec.europa.eu/info/sites/default/files/at_rrp_summary.pdf, accessed 15 July 2022.
28 European Commission, nt. (26).
29 European Commission, Commission staff working Document 2022 Country Report – Austria, SWD (2022) 601 final,

9, Brussels, 23 May 2022.

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     Verena Vinzenz                                                           Italian Labour Law e-Journal
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                                                               The NextGeneration EU in Action: Impact on
                                                                                 Social and Labour Policies




because of population aging. A raising of the statutory retirement age was outlined as a
possible solution to this problem.30


3.2 The Austrian RRP and the European Pillar of Social Rights.

    The Austrian RRP responds directly to several targets laid out in the European Pillar of
Social Rights. Chapter I (equal opportunities and access to the labour market) includes four
principles, principle 1 being “education, training and life-long learning”.31 This principle is
further defined in the European Skills Agenda,32 which in turn declares one of its numerous
objectives for 2025 as increasing the participation of low-qualified adults in learning, as well
as increasing the share of unemployed adults aged 25–64 with recent learning experience.
    As already specified, subcomponent 3.B of the Austrian RRP addresses exactly this
principle, entrenched in the European Pillar of Social Rights, as it includes measures of
reskilling and upskilling in order to better integrate low-qualified and unemployed adults into
the labour market. For instance, the Austrian RRP introduced a so-called “education bonus”.
    The most recent press release by the Ministry of Labour, dating back to 2 December 2021,
shows that the measure, which was originally intended to last only until 31 December 2021,
has now been extended until the end of 2022. As of December 2021, around 36,100 people
had benefitted from the education bonus, thus only narrowly missing the target that Austria
set itself of 40,000 people by Q4 2021.33 Secondly, the Austrian RRP also aims to ensure the
preconditions for re- and upskilling (investment 3.B.2, please refer above for more detailed
information), with a target of having at least 94,000 people pass through some kind of re and
upskilling measure by Q4 2024. For purposes of completeness, it may be added that the
European Pillar of Social Rights also includes principle 13, entitled “unemployment
benefits”, under which the above-mentioned measures could also be classified. Principle 13
is also explicitly addressed by reform 4.D.10 of the RRP, the labour market one-stop shop,
also previously mentioned.
    The measures included in subcomponent 3.C of the Austrian RRP correspond to
principle 11 of the European Pillar of Social Rights, entitled “childcare and support for
children”, which is part of Chapter III (social protection and inclusion). This principle states
that all children have the right to affordable early childhood education. As described above,
investment 3.C.3 aims to do just that by expanding elementary education for under
     three years old and three to six years old by Q4 2023 in order to meet the Barcelona
target of 33 per cent of all children under the age of three to have access to elementary
education/child-care services.


30 Ibidem.
31  See https://op.europa.eu/webpub/empl/european-pillar-of-social-rights/en/ (accessed 15 July 2022) for
more detailed information on the European Pillar of Social Rights.
32   For more information on the European Skills Agenda, its actions and objectives, see
https://ec.europa.eu/social/main.jsp?catId=1223&langId=en, accessed 15 July 2022.
33 Federal Ministry of Labour, Press release, 2 December 2021.



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  Verena Vinzenz                                                                       Italian Labour Law e-Journal
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                                                                        The NextGeneration EU in Action: Impact on
                                                                                          Social and Labour Policies




   The Austrian RRP also addresses principle 18 of the European Pillar of Social Rights,
which focusses on long-term care. According to principle 18, everyone has the right to
affordable long-term care services of good quality, in particular homecare and community-
based services. This corresponds to reform 4.B.2 of the Austrian RRP, which aims to further
develop care provisions in the long-term care sector. As mentioned above, reform 4.B.2 aims
mainly to prepare a long-term care reform starting in 2024, and therefore the roll-out of
changes in long-term care provisions will take place only after 2024.
   Lastly, principle 15 (old-age income and pensions), which aims to ensure that women and
men will have equal opportunities to acquire pension rights, is a focus of the Austrian RRP
through the implementation of reforms 4.D.2, the early starter bonus, and 4.D.3, pension
splitting.
   In terms of the social scoreboard, which is an Annex to the European Pillar of Social
Rights,34 we may summarise that the Austrian RRP to some extent focusses on all three
aspects, namely equal opportunities, fair working conditions and social protection and
inclusion. The main vision of the Austrian RRP, however, and what most of the resources
will be directed towards, is still the green and digital transitions.
   In summary, the Commission found that Austria is performing well on most dimensions
of the European Pillar of Social Rights, but some challenges remain, especially regarding the
underused potential of women, low-qualified workers, older workers and people with a
migrant background.35


3.3 The Austrian RRP and implementation of the CSR.

   The annual CSR regularly point out areas that Austria should focus on in the upcoming
years. One of its central points of criticism, which is repeated from year to year, is that the
Austria tax system relies on a complex fiscal federalism, which hampers fiscal transparency
and political accountability. It is also characterised by a high burden on labour.36 In 2022, the
Commission acknowledged that the eco-social tax reform – which was introduced as a
beacon project by the Austrian RRP – “is a step in the right direction”, but that there is still
room for improvement. For instance, the Commission recommends that Austria “reduce
non-wage labour costs to boost job creation and labour supply, especially for low-income
earners”.37

34-See  https://op.europa.eu/webpub/empl/european-pillar-of-social-rights/en/#annex2, accessed 15 July
2022.
35 European Commission, Recommendation for a Council Recommendation on the 2022 National Programme of Austria

and delivering a Council opinion on the 2022 Stability Programme of Austria, COM (2022) 601 final, 8.
36 For 2019, see: Official Journal of the European Union, Council Recommendation of 9 July 2019 on the 2019 National

Reform Programme of Austria and delivering a Council opinion on the 2019 Stability Programme of Austria, 2019/C 301/20,
119. For 2022, see: European Commission, Recommendation for a Council Recommendation on the 2022 National
Programme of Austria and delivering a Council opinion on the 2022 Stability Programme of Austria, COM (2022) 601 final,
7.
37 European Commission, Recommendation for a Council Recommendation on the 2022 National Programme of Austria

and delivering a Council opinion on the 2022 Stability Programme of Austria, COM (2022) 601 final, 7.

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     Verena Vinzenz                                                                   Italian Labour Law e-Journal
                                                                                     Special Issue 1, Vol. 15 (2022)
                                                                       The NextGeneration EU in Action: Impact on
                                                                                         Social and Labour Policies




    In terms of the social and labour dimensions, the CSR 2019 noted that “the untapped
potential of human capital is hampering productivity and long-term growth”. While the
female employment rate stands well above the EU average, the number of women in full-
time employment remains rather low. Austria’s female part-time rate is well above the EU
average and has even risen in the past couple of years (2018: Austria 47.6 per cent, EU 33.8
per cent; 2021: Austria 49.9 per cent, EU 28.3 per cent). The limited supply of affordable,
high-quality childcare is identified as a major hindrance for women wishing to participate
more actively in the labour market, therefore the Commission requests that Austria should
increase the supply of quality childcare.38 In 2022, the European Commission repeats this
recommendation, stating that women’s labour market participation “would benefit from the
improved availability of quality early childcare facilities”.39
    The integration of other disadvantaged groups – such as people with a migrant
background or low-skilled workers – into the labour market is also an area of focus. The
European Commission took note that the promotion of reskilling and upskilling measures
included in the Austrian RRP will address these challenges by supporting training for low-
skilled workers and the long-term unemployed. The Commission pointed out, however, that
the measures do not fully address the underlying problems of people with a migrant
background and low-skilled workers. Therefore, educational outcomes for these groups need
to be improved much earlier in life. Also, a need remains for additional retraining and lifelong
learning opportunities for workers of all ages.40
    Another recommendation of the CSR 2019 was to reduce the so-called pension gap. The
Council suggested that Austria should aim to close the gap between the statutory and the
effective retirement ages and promote longer working lives. It should also strive to adjust the
minimum age for both early and statutory retirement to help improve long-term
sustainability.41 In 2020, when the Covid-19 pandemic held centre stage, retirement was not
explicitly addressed by the CSR 2020. However, the Commission recommendation reiterated
that the reforms mentioned in the CSR 2019 are essential and that those recommendations
“remain pertinent and will continued to be monitored”.42 In 2022, the European
Commission concluded that “the long-recognised challenge related to the gender pension
gap is being partially addressed”43 in the Austrian RRP.
    Finally, in 2022 the European Commission acknowledges that “public expenditure for
long-term care is expected to soar by up to 30% in the next eight years. In addition to
demographic developments, the need for more intensive care due to old age-related illnesses
is also expected to play a role in pushing up the costs of long-term care.”



38 Ibidem, 8.
39 Ibidem.
40 Ibidem, 9.
41 Official Journal of the European Union, Council Recommendation of 9 July 2019 on the 2019 National Reform

Programme of Austria and delivering a Council opinion on the 2019 Stability Programme of Austria, 2019/C 301/20, 119.
42 European Commission, nt. (37), 6.
43 Ibidem, 8.



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     Verena Vinzenz                                                         Italian Labour Law e-Journal
                                                                           Special Issue 1, Vol. 15 (2022)
                                                             The NextGeneration EU in Action: Impact on
                                                                               Social and Labour Policies




   The Commission recognised that the Austrian RRP (reform 4.B.2.) announced a
comprehensive reform of the long-term care system, but that its implementation was still
pending.44


4. Reception of the Austrian RRP

   In 2022, the European Commission pointed out that “Austria’s strong social protection
system and extensive policy measures have limited the social impact of the COVID-19
pandemic”.45 Thereby, the Commission did not identify Austria as one of the Member States
for which an in-depth review would be needed.46
   Within Austria, however, the RRP was reviewed and discussed much more heatedly.
   Leading up to the implementation of the Austrian RRP, the Austrian government chose
to directly involve interested parties, such as the social partners, local and regional authorities,
NGOs and other relevant stakeholders by giving them the opportunity to voice their
opinions in a consultation process. The consultation process was initiated by a “kick-off
event” on 26 January 2021, to which representatives of the Austrian ministries, Länder and
municipalities, as well as several NGOs were officially invited. In accordance with sec 18
para 4(q) of Regulation 2020/241, participation in public consultations via e-mail was
possible until 26 February 2021.47 According to the Austrian Social Democratic Party,
however, the implementation process from this point onward was neither transparent nor
comprehensible to the public. Austria was one of the last countries to submit its draft
reconstruction plan or the final version. Thereby, a broad, substantive discussion about the
draft of the RRP was, at least according to opposition parties, not possible.48 The Austrian
Freedom Party (FPÖ) even went so far as to demand the rejection of NGEU altogether.49
   The Chamber of Labour also criticised the involvement of the social partners in the
preparations of the plans. While the Chamber of Labour was invited for a discussion with
the (then) Federal Minister Caroline Edstadler, they stated that this was no substitute for a
broad dialog with experts from the social partners.50
   The “Momentum Institut”, an Austrian thinktank, issued an analysis of the Austrian RRP
in 2021.51 It found that “only 4% of the total investment volume went to completely new

44 Ibidem, 7.
45 Ibidem, 8.
46 Ibidem, 2.
47 Inquiry response 6427/AB,

https://www.parlament.gv.at/PAKT/VHG/XXVII/AB/AB_06427/imfname_986918.pdf, accessed 15 July
2022.
48 Parliamentary inquiry 8613/J XXVII. GP,

https://www.parlament.gv.at/PAKT/VHG/XXVII/J/J_08613/fnameorig_1013710.html, accessed 15 July 2022.
49 Parliamentary Correspondence PK0503,

https://www.parlament.gv.at/PAKT/PR/JAHR_2021/PK0503/index.shtml, accessed 15 July 2022.
50 https://www.arbeiterkammer.at/wiederaufbaufonds, accessed 15 July 2022.
51 Dammerer Q., Hehenberger A., Huber A., Muckenhuber M., Picek O., Tölgyes, J., EU-Wiederaufbauplan:

Wenig wirklich Neues, Momentum Institut, Studie 02, 2021.



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 Verena Vinzenz                                                            Italian Labour Law e-Journal
                                                                          Special Issue 1, Vol. 15 (2022)
                                                            The NextGeneration EU in Action: Impact on
                                                                              Social and Labour Policies




projects and measures. The remainder was either already being implemented or at least
expressly mentioned in the government program”.52 The authors of the survey also
concluded that 17% of funding, was targeted towards job holders and families, whereas the
majority was directed towards infrastructure. While the specific allocation of funds to
measure in the government program was regarded as fundamentally positive, the authors of
the survey concluded that an “opportunity to invest additional/new money was partially
missed” and that “unemployment, loss of income, loss of education and other effects weigh
on a sufficient, lasting revitalisation of the economy”53 after the end of the COVID-19
pandemic.


5. Conclusions

    With its RRP, Austria decided to take up the main emphasis of the NGEU, thus “making
Europe healthier, greener and more digital”.54 Therefore, the main focus of the Austrian RRP
lies within its first two components, sustainable recovery and digital recovery.
    As shown above, a number of the reforms and investments contained in Austria’s RRP
will directly impact the labour market, such as the re- and upskilling, or the one-stop shop
for unemployed workers. Austria also decided to directly address the recommendations
contained in the 2019 and 2020 CSR by specifically including measures to transform the tax
system, enhance childcare and close the pension gap.
    The 2022 CSR confirmed that the implementation of the reforms and investments of the
Austrian RRP is well under way and that the effect of the implementation of several
measures, such as the adoption of an eco-social tax reform or the introduction of a CO2 price
for non-ETS sectors, are already visible. However, the Commission found that certain issues
have not been thoroughly addressed in the Austrian RRP and will only increase in
importance:
    • firstly, Austria will have to focus its attention on reform of the long-term care system,
        which was announced but is still pending;
    • secondly, that Austria is still not doing enough to integrate women, low-qualified
        workers, older workers and people with a migrant background into the workforce.
    The Institute for Advanced Studies (IHS) was commissioned by the Ministry of Finance
to conduct an assessment of the economic impact of the reforms and investments contained




https://www.momentum-institut.at/system/files/2021-04/moment_studie_02.21_20210415.pdf, accessed 15
July 2022.
52 Ibidem, 2.
53 Ibidem, 9.
54 See https://europa.eu/next-generation-eu/index_en, accessed 15 July 2022.



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     Verena Vinzenz                                                               Italian Labour Law e-Journal
                                                                                 Special Issue 1, Vol. 15 (2022)
                                                                   The NextGeneration EU in Action: Impact on
                                                                                     Social and Labour Policies




in the Austrian RRP.55 The study found that the impact of the reforms and investments
should lift Austria’s GDP by 0.4 per cent (short-term) and 0.914 per cent (medium-term).56
   The boost to the economy should create up to 14,000 jobs by 2026.
   In conclusion, Austria’s RRP has been evaluated positively by the European Commission
and includes reforms and investments that should effectively help to foster economic
growth. Austria still has to focus, however, on boosting women’s labour market participation,
enhancing quality child-care services, and improving labour market outcomes for
disadvantaged groups.




Copyright © 2022 Verena Vinzenz. This article is released under a Creative Commons
Attribution 4.0 International License.




55 Reiter M., Forstner S., Garstenauer V., Hofer H., Molnárová Z., Paterson I., Macroeconomic assessment of the
Austrian Recovery and Resilience Plan – Research Report, Institute for Advanced Studies, Wien, 2021
https://irihs.ihs.ac.at/id/eprint/5831/1/ihs-report-2021-reiter-forstner-garstenauer-hofer-molnarova-
paterson-austrian-recovery-resilience-plan.pdf, accessed 15 July 2022.
56 Ibidem, 56.



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