The Austrian Economy in the European Union: A First Assessment

Abstract:     
After joining the EU in 1995, uncertainties over the future legal and administrative system remained latent. But there was also rising awareness of Austria's possibilities to influence the decision making processes in Brussels. The Austrian system of social partnership, based on centralized wage bargaining and continuous involvement in policy formulation, was seen to facititate structural change and the maintenance of sound economic policies. In order to survive, however, this system had to be adapted to the new environment of deregulation and liberalization and to a much more heterogeneous society. Austria's experience with the virtually fixed peg of the schilling to the deutschmark proved to be a vivid training camp for feasible policy responses also in adverse circumstances. Austria was striving to become an active Member of the EU, mirrored in the early preparation of the Austrian presidency of the EU in the second half of 1998. In accordance with the policy priorities of the EU (formulated at the Essen European Council in December 1994), Austria was set to contribute to the measures designed to fight unemployment, to further transnational environmental protection and to solve regional problems of transit traffic. With respect to monetary and fiscal policies, Austria joined the group of hard-core countries, reflecting the widespread political consensus to meet the Maastricht (fiscal) criteria in time and become a candidate for immediate EMU membership.

Keywords: Austria, accession to EU, EMU membership

JEL Classification: F15, F40

working papers series