Following an unprecedented crisis due to the pandemic, Austria’s recovery and resilience plan responds to the urgent need of fostering a strong recovery and making Austria future-ready. The reforms and investments in the plan will help Austria become more sustainable, resilient and better prepared for the challenges and opportunities of the green and digital transitions. To this end, the plan consists of 32 investments and 27 reforms. They will be supported by €3.46 billion in grants. 59% of the plan will support climate objectives and 53% of the plan will foster the digital transition.
The transformative impact of Austria’s plan is the result of a strong combination of reforms and investments which address its specific challenges. The reforms and investments address bottlenecks to lasting and sustainable growth. In particular, Austria’s plan will reform the tax system to make it greener and more social, increase digitalisation, protect the climate through zero-emission mobility, renovation and energy-efficiency measures, and improve education and training across the country. All reforms and investments have to be implemented within a tight timeframe, as the Regulation establishing the Recovery and Resilience Facility provides that they have to be completed by August 2026.
The plan will foster economic growth and create jobs. It will lift Austria’s gross domestic product by 0.4% to 0.7% by 2026. This boost to the economy will bring up to 14,000 people into jobs. Austria will also benefit significantly from the recovery and resilience plans of other Member States, for instance through exports. These spill-over effects account for 0.5 percentage points of gross domestic product in 2026. These estimates do not include the possible positive impact of structural reforms, which can be substantial. Altogether, this demonstrates the added value of joint and coordinated action at the European level.
- +0.4-0.7% Impact of NextGenerationEU on Austrias's gross domestic product by 2026
- + 14,000 Jobs by 2026
- 0.5% Gross domestic product benefits thanks to other Member States’ recovery and resilience plans in 2026
When designing the plan, Austria’s authorities consulted national and regional social partners and stakeholders, while pursuing a close dialogue with the Commission ahead of the formal submission of the plan on 30 April 2021. On 21 June 2021, the Commission gave its green light to the plan. On this occasion, President von der Leyen symbolically transmitted the Commission’s assessment to (then) Prime Minister Kurz during a visit in Vienna. The plan was in turn adopted by the Council on 13 July, opening the door to its implementation and financing.
In the area of climate and environmental policies, Austria’s challenges 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 cohesion.
Key measures for the green transition
The plan supports the green transition through investments of €843 million in sustainable mobility with zero-emission transport and an additional €543 million to expand the electrified trans-European rail network, including linking it to regional lines. Companies’ investment in low-emission buildings and vehicles (€504 million) will be supported, as will the phase-out of oil and gas heating in private homes (€159 million). Further investments include a €50 million biodiversity fund and the recycling of beverage containers (€300 million).
These will be complemented by crucial reforms, such as the eco-social tax reform, the renewables expansion act to reach 100% renewable electricity by 2030 and the climate ticket for increased use of public transport via a flat rate season ticket, as well as introducing a soil protection strategy.
Example project: the eco-social tax reform
As a flagship initiative, the Austrian recovery and resilience plan includes an eco-social tax reform. Its cornerstone is the introduction of a price for CO2 emissions on fossil energy sources as of mid-2022. A climate bonus shall compensate for the additional energy costs depending on regional factors such as the quality of public transport. The reform also includes a major tax relief to households and businesses, which will fuel the already strong economic recovery that began in spring 2021. The tax reform is flanked by investments for the green transition such as grants for climate friendly industries, e-mobility and the refurbishment of buildings.
Digital challenges for Austria include the need to improve the population’s basic digital skills and more specialised software skills, through equal access to education and upskilling and reskilling measures. Increasing the adoption of digital technologies by smaller companies and widening very high-speed broadband coverage and take-up are also essential.
Key measures for the digital transition
Austria’s recovery and resilience plan supports the digital transition with investments in Gigabit networks reaching half of Austrian households (€891 million) and the digitalisation of more than 15,000 SMEs and 7,000 larger companies (€101 million). Further important investments include support to a digital, service-oriented public administration (€160 million) and providing computers for all secondary pupils (€172 million). Flanking reforms are included to set up an Internet Infrastructure Austria 2030 Platform to simplify procedures for broadband deployment and facilitating equal access of secondary pupils to obtain basic digital skills.
Example project: Broadband Austria 2030
Through targeted funding instruments in its recovery and resilience plan, Austria plans to invest substantially (€891 million) in widespread availability of very high capacity broadband networks (which support fast internet connections of up to a Gigabit per second) and the deployment of new symmetrical Gigabit connectivity, which will benefit in particular rural regions.
Economic and social resilience
Key macro-economic challenges for the Austrian economy include the need to make the tax mix more efficient and more supportive to inclusive and sustainable growth, improve the long-term sustainability of public finances, simplify and rationalise the fiscal framework, boost labour market outcomes for the low-skilled, support full-time employment among women, reduce the administrative burden for businesses, and improve R&D innovation outcomes.
Key measures in reinforcing economic and social resilience
The plan reinforces economic and social resilience with investments and reforms in the crucial areas of education and skills, healthcare, business environment, and research and innovation. Austria’s recovery and resilience plan also includes several measures in the context of the pension system (e.g. reducing incentives for early retirement and decreasing the gender pension gap) and a one-stop shop increased support for the long-term unemployed. Austria plans to improve the business environment for start-ups and provide up - and reskilling opportunities for people who have become unemployed during the crisis (€277 million). The plan also includes investments to increase places in high-quality early childhood care facilities (€28 million) and to improve primary healthcare (€100 million) and long-term care (€54 million). It will also spend €250 million on future-oriented technologies, through projects of common European interest in microelectronics and hydrogen production.
Example project: one-stop shop for the long-term unemployed
Austria is planning to implement a one-stop-shop for the long time unemployed facing multiple barriers to placement and inclusion on the labour market. The aim is to provide coordinated support to address those barriers and to facilitate access to qualification and training. The one-stop shop should coordinate and facilitate the access by long-term unemployed to the appropriate services of different support institutions.
The plan is consistent with relevant country-specific challenges and priorities identified in the European Semester, the annual cycle of coordination and surveillance of the EU’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)