AUSTRIA

The electoral process in Austria meets the standards required of a liberal democracy. Since 1945, there have been no significant doubts expressed about the openness and fairness of elections. However, a debate has emerged recently over the extent to which e-voting should be considered a potential violation of the secrecy of ballots. The use of e-voting systems in electing student representatives at universities – which is seen as the first step toward widespread e-voting in elections for public office – has been stopped due to concerns that such systems do not meet secrecy requirements and therefore fair and free voting standards.
The Austrian constitution explicitly excludes one party, the Nazi party (NSDAP), from participation in the electoral process. Any group seen in this tradition could be excluded from elections by order of an administrative decision. Such decisions can be contested – as happened in the 1980s with regard to some extreme fringe groups – with the final decision resting with the Constitutional Court.

There is a significant difference between the privately owned electronic (and print) media and the state-owned public broadcaster, ORF, which is committed by law to independent, impartial and extensive information. During campaigns, the ORF treats political parties as equal as possible - under the condition that the parties are already represented in parliament. This can be seen as unfair with respect to new and very small parties but it provides a rule which arguably is within the general understanding of fairness.
Other media outlets are free to express indirectly or directly a bias in favor of specific candidates and parties. There is no generally accepted “watchdog” organization tasked with observing the media and the degree of fairness they show during campaigns. The absence of a watchdog mechanism, combined with the high degree of media concentration in Austria, diminishes the extent to which media access remains fair.

The inclusiveness of the electoral process in Austria follows European standards. There is no legal discrimination based on gender, religion, ethnicity, or sexual orientation. In 2008, the minimum voting age was lowered from 18 to 16 in order to make voting more inclusive.
One major critical aspect is the increasing number of non-citizens living legally in Austria (excepting EU-citizens who are allowed to participate in local and European, but not in regional and national elections) who are excluded from voting. Access to citizenship is increasingly more difficult, legally and practically. As a result, a significant share of the Austrian population (approximately 10%) is excluded from political participation. This is not so much a violation of the Austrian constitution but rather a violation of a basic tenet of democracy, namely that a democratic state must provide citizenship to those who reside legally and for an extended period on its territory.

Party financing is a critical problem in Austrian democracy. Political parties, usually under the condition of being represented in parliament, receive public funds on the national, regional and local levels. Whereas the public influx of money is known, how and where this money is spent is not monitored. As parties represented in parliaments at the different levels determine the amount of money they receive (this is usually linked to their parliamentary strength), they have comparatively enormous funds to use for several purposes, in particular electoral campaigns.
Private donations, which are also not properly monitored, have not ceased as a result of the public financing system. In fact, they add to the abundant resources parties can use for campaigning. Only private donations to the party above a threshold sum of € 7,260 must be publicly declared. All other donations to associations closely or directly linked to the party itself go unaccounted for.

Media freedom is guaranteed by the constitution. There is no censorship in Austria, and new media in the electronic and print sectors can be established freely. Limits to the freedom of expression in the media are defined by law, and the courts ensure that these limits are enforced. The most stringent limits concern the prohibition of promoting Nazism and any other kinds of racial or religious hatred.
The Austrian judiciary tends to interpret the freedom to criticize politics and politicians more narrowly than the European Court of Human Rights (ECHR) in Strasbourg does. The ECHR has struck down some judgments by Austrian courts because it assumes that politicians must endure certain kinds of criticism otherwise not permitted in cases involving private individuals.
The state-owned public broadcasting system ORF, which is the dominant broadcaster, is in a delicate situation. On the one hand, its independence from the government is legally guaranteed; on the other hand, the government plays a decisive role in determining ORF’s top management positions.

Austria’s media have highly concentrated ownership structures. This is especially true for the print media. The most widely distributed daily paper, the “Neue Kronen-Zeitung,” (NKZ) is read by about 40% of all newspaper readers in Austria. The major weekly news magazines are all owned by one single group. Clearly, this does not reflect a situation of competitive pluralism. In addition, the NKZ carries political weight insofar as politicians of different parties are anxious to please the editor and the staff, a situation which erodes the fair and open democratic competition of ideas and interests.
Subsidies to the Austrian print media significantly discriminate in favor of papers with wider distribution as such subsidies are generally granted only to daily papers with a distribution of more than 6,000. These subsidies thus exacerbate the highly concentrated structure of the Austrian press.
Since the 1990s, the electronic media sector has slowly diversified as ORF’s monopoly in the sector has dissolved, although the state-owned broadcaster continues to offer (by far) the most popular programs. With its mandate anchored in public service, ORF ensures the plurality of information. In addition, the electronic media market has become wide open to the international market.

According to the Austrian constitution and other laws at both the federal and state level, public authorities are obliged to provide citizens with information concerning all matters within their realm of responsibility. However, the obligation to report is limited by the legal requirements of secrecy, for reasons relating to public security, defense, international relations, or the government’s economic or financial interests.
According to the standard legal procedures of the Austrian administrative courts, an individual or organization can appeal a denial of information.

Civil rights, as established by the United Nations, the Council of Europe and the European Union, are encoded in Austria’s constitution. Nevertheless, individual violations do occur. In most of these cases, Austrian institutions (administration, courts) remediate the violations. But in some cases, Austria as a state has been held responsible for violations which are usually reported by NGOs like Amnesty International.
These cases usually have to do with the treatment of foreigners, especially those coming from less developed parts of the world. With respect to the treatment of asylum seekers, there have been several borderline cases in which the limits of international standards as expressed by the Geneva Convention have been pushed.

Individual liberties are protected in Austria by constitutional guarantees. With the exception of National Socialism, all political creeds are treated equally by the law. The right to articulate specific opinions, including the right to organize movements and political parties, is provided and exceptions (e.g., in the interest of public security) can be considered very restrictive, never general.
With respect to public worship, the guarantee the Austrian system gives all major religious denominations is tentatively contradicted by an increasing anti-Islamic sentiment among the population, which has been articulated in the protests against the building of mosques, especially minarets. Legally, Islam has the same rights as the major Christian faiths. But due to social trends and specific responses by some political parties, guarantees of equal treatment might be jeopardized in the future.

A law protecting against discrimination was passed in 2004. The tendency to legally protect against discrimination is in line with the general European trend. One example is that same-sex unions have gained legal status in Austria, even if the term “marriage” is not used and adoptions by same-sex couples are not (yet?) possible.
The debate over gender discrimination demonstrates that the main issue is not formal but informal discrimination, such as de facto discrimination on the labor market.
Despite the existence of an anti-discrimination law, discrimination based on ethnicity, ethnic origin, social status, political view, sexual orientation and religion are, in practice, still possible. However, by and large, the Austrian public has become more sensitive to discrimination issues in recent years.

The Austrian constitution is based on a specific understanding of legality. Any administrative act must be based directly or indirectly on a specific law, and any law must be in line with the constitution. The constitution also guarantees the courts’ independence. Judges cannot be dismissed or transferred against their will. No government institution may interfere in court decisions. The government (i.e., the president) appoints judges – with the exception of the high courts – based on nominations from the courts themselves. This independence is monitored by the three high courts, the High Court for Civil and Criminal Law, the Administrative Court and the Constitutional Court.
The Constitutional Court is by far the most important body in terms of guaranteeing the rule of law. It can suspend laws already passed by parliament if the law violates the constitution. The Constitutional Court is also tasked with monitoring the fairness of electoral procedures. The federal president appoints members of the Constitutional Court based on nominations by the federal parliament or by the federal government. But the court as such has the reputation of independence. The most significant issue in terms of possible underperformance is the delay of decisions resulting from an overload of cases, most of which deal with asylum issues.
Another factor negatively affecting the Constitutional Court’s effectiveness is the ambiguity of the implementation process. In principle, it should be the federal government making sure that the court’s decisions are executed. But as the case of Slovene minority rights in Carinthia clearly outlines, the Constitutional Court has its limitations. Referring to the constitution, the Court has ruled that the number of bilingual local signs in Carinthian communities must be increased. This decision has not been implemented due to resistance among parts of the majority population and fears of political reprisals among the regional and federal government.

The Austrian constitution guarantees that any executive action can be reviewed and annulled by the Administrative Court or Constitutional Court.
The process of appointing judges follows the principle of self-recruitment (with the exception of the Constitutional Court), in which judges nominate judges. The process of self-recruitment is sometimes criticized because it might create a self-appointed class of mandarins above parliament and government. But opinion generally favors this system as the best possible means of guaranteeing judicial independence.
The only instance of direct dependence on the government is the case of public prosecutors who are by training judges but also tasked with executing the law in the government’s name and thus bound to the instructions of the government. In some recent cases it became evident that the government was passively or even actively preventing the prosecution of members of the political elite, such as the Prime Minister of Carinthia, Gerhard Dörfler (BZÖ).

Members of the Constitutional Court must be completely independent from political parties (art. 147/4). They cann neither represent a political party in parliament nor be an official of a political party. In addition to this rule, the constitution allows membership only for persons with a qualified career in specific legal professions.
Nevertheless, the process of recruiting members (who are appointed until their 70th year) makes the involvement of both government and parliament necessary. This could imply that a governing majority uses its legal power to re-structure the court according to the government’s political interests. However, this would certainly be subject to public debate and criticized by the opposition. Any such undertaking would therefore be possible only within the framework of a broad political consensus, and it would be limited.

Austria ranks 16th on the Corruption Perceptions Index established by Transparency International. Thus, according to the available data, Austria does not have a significantly high level of corruption. The low levels of corruption may in part be attributed to extensive media coverage, but also to the anti-corruption activities of the Federal Ministry of the Interior and of the Ministry of Justice.
This of course cannot guarantee the complete eradication of corruption, but in the cases which are known – most recently in the case of the privatization of public housing projects – police and public prosecution seem to do their job, even if high-ranking politicians and their friends may be involved. However, there have been cases made public in recent years of known politicians involved in corruption issues, who apparently received for some time passive protection from the government.
Unfortunately, the creation of an independent prosecutor’s body for corruption failed, and the newly created prosecutor’s body is again bound by government instructions.

Given the emergence by the end of 2008 of one of the worst recessions in recent history, the Austrian economy is in comparatively good shape. In the third quarter of 2009, the economy started to grow again. Most indicators suggest that the Austrian economy is undergoing a slow but sustainable rejuvenation since the deep crisis of 2008-2009.
This is only partly the result of Austrian economic policy, as the country has only limited room to maneuver within the context of an increasingly globalized economy. However, some recent decisions made at the Austrian and European levels point to profound political reforms being made in financial and real-economic structures, which is a positive development. The need to rebalance public budgets on the other hand leads to important cuts in public spending. If realized contemporaneously – especially with regard to other European nations – and too quickly, these cuts carry the inherent danger of stalling economic recovery.
Economic policy in Austria is determined by different actors. On the government’s side, different ministries usually controlled by different parties responsible for different agendas have to coordinate different political approaches (e.g., between (Austro-) Keynesianism and a more market-oriented approach). In addition, although the social partners (i.e., organized labor and business) have lost some of their power in recent decades, they are still important players in labor and social policy affairs. The need to establish a consensus therefore continues.

The Austrian labor market is characterized by deepening gaps between different segments. There is a significant difference between a large, well-performing core of the labor force and some of the more vulnerable groups with lower employment rates. There is also a major gap between the “privileged sector” (i.e., more or less the public sector), which enjoys a high degree of job security, and the non-privileged sector, which has to bear the burden of unemployment.
Another troubling issue is the very low number of persons aged 50+ actively participating in the labor market. Although the official age for pension-entitlement has been raised, recent reforms have once more delayed the envisaged reduction of early retirees. Furthermore, foreign labor (legal or illegal) provides the least protected and least paid labor force, representing a kind of underclass. The gap between skilled prime age and (often unskilled) older workers is affecting the labor market through different channels. Vulnerable workers are generally the first ones to face unemployment when activity falls. The pursued transition to a higher national minimum wage and full liberalization of the movement of workers from Central and Eastern European countries (by 2011) will undermine the demand for unskilled laborers in Austria’s current labor force.
Austria’s labor market policy is struggling hard to overcome those deepening gaps. A wide range of incentives for potential employers have recently been introduced. In order to improve the skills of vulnerable workers, however, more attention has to be paid to policy tools such as lifelong learning, active labor market policies and improving education. Nevertheless, unemployment in Austria is, in international comparison, relatively low. Due to a significant proportion of part-time work arrangements, mostly accumulated during the crisis of 2008-2009, even under prospects of an economic upturn, current unemployment figures will remain at their present levels for the months and possibly years to come.

The trend towards deregulation in combination with the wave of privatization which began more than 20 years ago has come to an end, at least for the moment. In response to the financial crisis, the government was forced to re-enter territory it had already left, such as nationalizing a bank in 2009.
In the past, two factors have contributed to progress in the Austrian economy. First, a relatively open Austrian market gave it broad exposure to international and regional competitive forces. Second, Austrian business has been active in private R&D, and Austria has been singled out as a prominent innovator in recent years. A generous fiscal treatment of private R&D expenditures has certainly contributed to that development.
However, the regulatory and competition framework of services has not kept pace with international and European standards. Austria lags significantly behind in competition policy, with a relatively weak competition authority. Only the vast area covered by European competition law has been able to minimize the negative effects of those weaknesses in Austrian policy.
The rejuvenation of the Austrian economy could lead to an increase of investments into the domestic as well as the European economy. Currently, the long and intense business engagement of Austrian economic agents in Central and Eastern Europe seems to have been rolled back in favor of investments in more stable economies.

The Austrian tax system focuses on wage taxes. In 2009, about €21 billion have been raised from wage taxes, compared to €4.1 billion from corporate taxes. Property taxes and other forms of taxation play a quantitatively minor role. In addition, social security contributions play an important role as they make up around one third of overall revenues. This imbalance attracts foreign capital but punishes labor and the individual taxpayer.
The statutory corporate tax rate is slightly below the OECD average. Furthermore, “group taxation,” which allows multinationals to deduct losses incurred by foreign subsidiaries or even participations has led to a significant shortfall in corporate tax income due to the financial crisis.
The financial crisis has sparked discussion over a re-introduction of property taxes and other changes, such as an increase in VAT or the recently implemented increase in petroleum taxes, which was justified in terms of environmental protection policy. Increasing the taxation of labor appears to be generally understood as undesirable. The Austrian tax system suffers from profound imbalances which effectively punish physical persons and labor.

Austria’s national budget, at least until the onset of the financial crisis in 2009, has fulfilled the Maastricht criteria. Due to the crisis and the effects of relatively powerful automatic stabilizers, the budget deficit is forecast to increase significantly in the next few years. These automatic stabilizers, however, have mitigated in significant ways the negative effects of the financial crisis, and while tax revenues from corporate taxes have declined considerably, recent increases in consumption taxes such as VAT and petroleum taxes have offset that decline sizably.
On the other hand, fiscal measures with relatively limited budgetary sustainability (e.g., expanding early retirement plans, instituting mandatory preschool education and establishing incentives for infrastructural development and SMEs) now render fiscal consolidation all the more necessary. Most pundits and experts generally agree that Austria will fail to meet the Maastricht criteria in the near future, as seems to be the case for most other EU members.

The Austrian health system is very good, but it is rather expensive. The system’s quality is manifest in the country’s consistent increase in life expectancy figures. However, cost efficiency is a problem, as there are several dual structures and the remuneration system for health services lacks the proper incentives for greater efficiency. Conflicts between local and state-level administration over the distribution of a very expensive medical infrastructure stand in the way of improving cost efficiency.
The system’s inclusiveness is generally guaranteed. Social security covers about 98.7% (2007) of all persons – citizens and non-citizens – residing legally in Austria.

Austria’s welfare state system remains one of the world’s most extensive. It substantially reduces poverty to a level that is far below the OECD average and considerably mitigates income inequality. Social policy is thus rather successful in preventing exclusion of the poor.
Nevertheless, social policies in Austria must address several major problems. One such problem is the absence of an inclusion framework for illegal immigrants. This problem affects more than immigrants alone. It creates a specific underclass of those living in extreme poverty within the underclass, and thus challenges social cohesion more generally.
The new poverty is another such problem. Since 1980, the gap between rich and poor has widened. To make matters worse, since 2008, poverty levels have grown. Due to the current economic downturn, and not least the opening up of the Austrian labor market to the new EU member countries from Central and Eastern Europe, these developments are expected to deteriorate in the coming years.
At the time of this writing (July 2010), the Austrian government is considering the implementation of a new basic social security for all legal residents. If implemented, this new system would expand the system’s inclusionary net.
Furthermore, Austria suffers from immense deficits in equal pay gender policies. Women generally earn about a fifth less than men at equal occupational levels in the same jobs. The Austrian policy has so far failed to effectively address these issues.

Family policy continues to divide parties and politics. There is a prevailing consensus that women (and, of course, men) should have the full freedom of combining job and family. However, the infrastructure needed to provide this freedom is not in place, especially in terms of all-day childcare facilities.
The coalition government has expressed support for the idea that every child should have free access to a year of pre-school, which would improve opportunities for (especially) mothers to remain in (or re-enter) the labor market. Steps have been taken to lengthen preschool education, many new preschool groups have been started, and in some parts of the country, at-school meals for preschoolers are also offered for free.
The implications of these steps are profound, especially given the absence of all-day childcare infrastructure: Austria’s fertility rate among women aged 15-49 is about 1.41; while in France, a country known for its well-developed childcare infrastructure, fertility rates are close to 2.1 (the number necessary for holding a population level constant).

The Austrian pension system is based on three pillars: public, employer and private-based systems. The employer and private-based pension pillars are still of marginal importance.
The Austrian public pension system, which is based on the concept of an inter-generational contract, has been repeatedly adapted over time in order to cope with looming demographic changes as a result of trends in aging. Currently at about 27%, Austria’s old-age dependency ratio (persons aged 15-65 relative to persons aged 65+) is set to increase to 55% by 2050, whereas the general European ratio, currently at 24.3%, will increase to 41.7% during the same period. Despite its recent reforms, the Austrian pension system is not set to cope with such challenges, and younger generations generally agree that they will not be entitled to an equally generous pension system on par with that of their parents.
These demographic changes and the hesitant response to them must be seen as a potential danger for the not-too-far future. Austrians still retire very early, men on average at 59 years, women at 58 years, and the existence of different pension systems contribute to large differences in pension benefits received. These issues are discussed intensely, and the integration of the different pension systems has at least begun.

One of the most significant deficits in Austrian politics is the absence of a consistent integration concept regarding immigrants. The only existing policy is based on the assumption of one-sided integration: Migrants have to adapt and assimilate.
The reality of integration politics is characterized by a profound dilemma. Although the economy depends on integration, as does the Austrian social system (given the demographic changes associated with an aging population), the public mood is increasingly hostile towards immigration. In consequence, politicians abstain from fostering policies favoring the integration of persons with a foreign background. This results in a vicious cycle in which the absence of constructive integration policies spells for failed integration, which in turn leads to an even more hostile mood regarding immigration.
In the school system, there are some experimental projects underway that deal with children of migrants who are unable to speak German (a common problem). Integration policy – where present – does not provide incentives such as smooth access to citizenship. The policy does not aim to segregate, but segregation is the overwhelming result of the lack of a coherent integration policy in Austria.

Austria’s defense policy, traditionally seen as the most important policy in providing external security, is defined by a suboptimal integration into the European defense system. As this system cannot exist without at least an informal linkage to NATO, Austria’s neutrality status prevents a better internationally based external security policy from being formulated. In the past, the oft-discussed concept of a “soft” external security policy resulted in Austria’s prominent participation in UN peace keeping missions. But this aspect of Austria’s security policy has become increasingly less important, partly because Austria’s military infrastructure is insufficient for more intensive and longer missions.
Austria’s external security policy is also determined by Austria’s participation in EU transnational police network like Europol and the Schengen system.
As Austria is not even a secondary goal for direct security threats (e.g., international terrorism), the deficits of Austria’s external security policy are not really felt within Austrian society.

According to public opinion polls, the biggest internal security issue is the rise of ordinary crime. As migration and European integration (i.e., the lifting of borders within the EU due to the Schengen treaty) are seen as the (or two of the) primary causes of security problems, the discourse in Austrian about internal security focuses on migration as the root cause of crime. The Austrian government has responded with promises to strengthen the police force. As a result, the police force is practically the only growing public sector, despite the general budget problems. Still, crime rates, in particular those for violent crime, are fairly low in Austria.
The linkage of migration with internal security makes it very difficult to develop a consistent and rational approach to integration and migration policy.

Environmental policy is traditionally given priority in Austria, at least rhetorically. The prohibition by law of the production of nuclear energy in Austria is perceived as a marker of the country’s vanguard role in defining environmental policy. Genetically engineered food is strongly opposed, and climate change is intensely discussed in Austria. Agricultural policy is increasingly considered to be an element of environmental policy. More or less all political parties – again, at least rhetorically– express strong commitment to improving the environment and preventing certain ecological dangers.
In reality, Austria is much less of a pioneer than the outside observer would expect. One example is the Kyoto Protocol: Austria is one of the very few
EU countries that has failed (and significantly so) to meet the goals of this international agreement. The reason is that the costs of environmental policy are less popular than the rhetoric. Progressive energy policies are rare, and green policies often fail once the Austrian public realizes the (personal) cost of such policies.
Austria has far to go to if it is to keep up with European standards (and developments) in environmental policies.

Austria is not a leading example of research and innovation, as evidenced by the ranking of Austrian universities. Though prosperous, Austria has not been able to attract significant research institutions and personnel, and to produce a significant output. However, there is one exception: the newly created center of excellence in science. Moreover, centers in medical science, physics and biotechnology are excellent.
Year after year, Austrian governments promise to give research and technology priority. But this policy is limited by the given budget structures, the vested interests linked to these structures and (especially since 2009) the budget crisis.

The Austrian educational system suffers from structural weaknesses known for a long time and criticized by many experts and international bodies (like the OECD). But the structural features responsible for an underperforming educational system have not changed.
The first structural deficit in the Austrian education system is the tracking of children as of the fourth grade, or when they are 10 years of age. At this point, some children are sent to the Gymnasium, an academic-track secondary school that prepares them for university studies, whereas others continue in the Hauptschule, a more general studies secondary school from where they can later (grade 8) transfer up to the Gymnasium and continue on to a university. However, most Hauptschule students do not move on to Gymnasium or to university studies. Empirical studies have demonstrated that this dual system prevents talented children with disadvantaged socioeconomic backgrounds from developing their full potential.
The university system, legally bound to offer entry to all students with a degree from a Gymnasium, is still defined by its social elitism – more so than is the case in other European universities. Students in Austria with a disadvantaged socioeconomic background are less likely to attend university than their contemporaries in other European countries.
For more than a decade, Austrian universities have competed with polytechnics (Fachhochschulen), which attract an increasing number of students. Both universities and polytechnics are part of the European “Bologna process,” established to create a common European university system.