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From the latest Michael Roberts on Austria

The rise of the FPO is not new. The FPO was junior partner to the OVP in the government of the 2010s. But this fell apart when both parties were involved in a corruption scandal that brought down the government and its FPO chancellor in 2019.

Austria has only 9 million people, but over the past decade the country has taken in more refugees per capita than any other EU country, fueling the FPÖ’s resurgence. The FPO has now evolved into a kind of anti-migrant, anti-Islam ‘populist’ party, as seen elsewhere in Europe. The FPO wants to end immigration and ‘remigrate’ immigrants to their ‘home’ countries. “Remigration is long overdue!” proclaims Kickl. The FPO also hints at leaving the EU, or “Öxit,” an Austrian-style Brexit.

But as elsewhere in Europe, the rising support for hard right anti-immigration parties is as much to do with the stagnation in the major economies and high inflation eating into living standards. It can be said that if Germany has a cold, Austria will get the flu. And Germany is suffering from a very heavy cold for its economy right now. As a result, the spillover to Austria is heavy.

Austria’s real GDP growth is stagnating at best. Indeed, ironically, if it were not immigration (+6.3% in 2011-2020), real GDP would have fallen sharply, as the domestic population is shrinking and ageing. Austria will have the third highest old-age related costs in the European Union as a percentage of GDP by 2030.

Moreover, Austria is still experiencing high inflation, averaging 4.2% over the past 12 months, surpassing the EU average. Inflation remains high because Austria has been forced to reduce its imports of cheap Russian gas as part of EU sanctions against Russia over Ukraine. Austria is caught in the middle over trade with Russia and with Western Europe.

The economy was in outright recession in 2023. The Austrian central bank, the OeNB, now expects the economy to ‘stabilise’ this year, with real GDP up by just 0.3. Even that looks optimistic. Austria’s GDP fell 0.6% Q2 2024, following a downwardly revised 1% contraction in the previous Q1. Recession continues.