Austria is heading for a record year in terms of bankruptcies, with more than 7,000 companies forecasted to go under by the end of 2024. That equals an average of 22 firms going under every single day in a population of only 10 million.
Notably, the country is experiencing many of the same issues neighboring Germany is facing: high energy costs, lower demand for goods, an aging workforce, high inflation input costs, and anti-business policies.
According to Austrian media outlet Horizont, 2024 is expected to produce the most bankruptcies in Austria in 15 years.
“Austria is heading for a new record year of corporate insolvencies. The reason is a toxic mix of declining exports, collapsing domestic consumption, and high costs. High unit labor costs, high material and energy costs together with excessive regulation are making it difficult for more and more companies to be successful in Austria,” said Gerhard Weinhofer, an official at the creditor protection association Creditreform.
The Freedom Party of Austria (FPÖ), which won national elections this year but was sidelined from power by rival parties who formed a coalition against it, is using the case to illustrate the crisis presented by the ruling government.
“This year, Austria is heading for a record year of bankruptcies. More than 7,000 corporate bankruptcies are forecast for 2024 – a new record in 15 years. ÖVP Chancellor Karl Nehammer and ÖVP Economics Minister Martin Kocher in particular have caused severe damage to the economy and Austria as a business location,” said FPÖ economic spokesman Axel Kassegger.
Kassegger notes that the new government, referred to as the traffic-light coalition, is likely to make matters worse. “And it is to be feared that the planned traffic light coalition will not be able to clear away this unique economic policy mess. This will prolong the left-wing anti-citizen and anti-business course of the black-green coalition, fuel inflation and further weaken our business location.”
Austria is not only facing bankruptcies; wage and job cuts are plaguing the country, along with plant closures.
“Our country urgently needs the long overdue reforms for it as a business location, relief measures for companies and employees. Our companies are still suffering from the very high costs of energy and transport, as well as from wage costs, which have increased sharply due to the still high inflation,” said Kassegger.
Last month, Russia entirely cut off natural gas supplies to Austira. The FPÖ argues for peace negotiations with Russia in order to restore the country’s cheap energy supplies.
“Electricity and gas network costs are rising massively, which will lead to enormous additional burdens for the Austrian population. Industry is still waiting for the extension of the Electricity Price Cost Compensation Act to relieve the burden on energy-intensive industry in particular. An extension of these measures this year is therefore a must, because time is of the essence,” he added.
