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Austrian report Austrian report
by Euro Reporter
2011-12-15 07:34:58
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Spending power slides

Austria remains one of the richest countries in Europe – but new figures also show that people’s purchasing power is waning. The European Commission’s (EC) statistics agency, Eurostat, said yesterday (Tues) Austria had the fifth-strongest purchasing power among the European Union’s (EU) 27 member countries last year. The alpine country, which became a member of the EU in 1995, was in fourth place in 2009. Denmark overtook Austria as far as spending power is regarded, Eurostat explained.

Luxembourg comes first considering spending power in the EU, with the Netherlands coming second. Economically challenged Ireland is third. Eurostat said Austrians’ spending power was found to be at 126 per cent if the EU average is set at 100 per cent. Luxembourg achieved 271 per cent, Ireland reached 128 per cent. Denmark’s purchasing power was just one percentage point lower than the one of Ireland in 2010. The research – which considers countries’ per capita gross domestic products (GDPs) – identified Bulgaria (44 per cent) and Romania (46 per cent) as the EU’s poorest countries. Crisis-stricken Greece achieved a spending power of 90 per cent, while Italy was above the average (101 per cent). The purchasing power of Spain, where people are bracing for dramatic austerity measures, resembles the EU average at exactly 100 per cent.

Austrians’ purchasing power was remarkably stable in 2009 when the country was fully affected by the financial crisis. It is expected to decrease in the coming months due to the great uncertainty about economic developments in the Eurozone and doubts about the EU’s most recent agreements. EU state and government leaders agreed last week to set up constitutional debt limits to prove their willingness to restore the federal budgets. All member countries but Great Britain accepted the new rules. Hungary is tipped to back the accord as well. The country’s Prime Minister, Viktor Orban, plans to ask the federal parliament for permission.

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Institute opposes new taxes


Hot on the heels of an announcement by Austria’s Chancellor Werner Faymann on plans for a EUR1.5bn (USD2bn) savings package next year, president of the Austrian Federal Economic Chamber (WKÖ) Christoph Leitl warned against plans for new taxes, underlining the need instead for cuts in expenditure and for vital reform measures. In a statement, Leitl warned that any plans to either increase the existing burden of taxes and contributions, or to introduce new taxes in Austria, would be “counterproductive”, given that Austria is already a country with a high tax burden, and that any new taxes and levies would merely be “poison” as regards both private and corporate investment. Underscoring that reform measures must instead be consistently implemented, Leitl stressed that the fiscal burden must not be increased on the middle class in Austria, as the middle class already currently pays the most in taxes.

Instead, Leitl eluded to significant savings potential, notably in the areas of early pensions, administration and in the health care system, amounting, he stated, to billions of Euros. Leitl pointed to the findings of various studies, which reveal that only expenditure-based consolidation measures produce lasting success. Austria must save, Leitl insisted, pointing out that Austrian industry deems reform measures to be equally as important as debt reduction initiatives, and measures to reduce new debt. Indeed, Leitl referred to a recent study, according to which 88% of those surveyed stated that budgetary consolidation should take place by means of reform. The government needs to implement swift, serious and courageous reform measures to benefit individuals in Austria, Leitl concluded.

Austrian Chancellor Werner Faymann recently revealed plans to consolidate the country’s budget by February next year by around EUR1.5bn, to be achieved by means of both cuts in expenditure and new taxes, notably in the area of wealth related taxes. Faymann insisted that wealth related taxes are simply a “matter of fairness” and that in order to consolidate the budget, revenue measures are needed alongside expenditure measures. Emphasizing the need for millionaires to contribute more in tax, Faymann noted that compared to the EU, Austria has one of the highest tax burdens on work, although among the lowest as regards wealth taxes. To achieve greater fiscal justice, the Chancellor indicated that the tax on the sale of property could rise, serving to generate several hundred million Euros for the state. Austria’s State Secretary Josef Ostermayer (SPÖ) is said to be currently preparing the cornerstones of the government’s planned savings package to be negotiated with coalition partner the Austrian People’s Party (ÖVP). The People’s Party remain opposed to the idea of new taxes, however, although ÖVP leader Michael Spindelegger recently indicated that a “solidarity contribution” imposed on Austria’s wealthy might be considered.

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Sex university revealed as a hoax


The supposed new Austrian sex university AISOS which made headlines around the world has turned out to be a hoax. The fictional 1,400 Euro-a-term International Sex School in Vienna was made up by the action group "The BirdBase" who wanted to draw attention to the bad pension system in Austria. "The First International School of Sex" was a well planned hoax which even had its own webpage where people could register. The school which was described by the supposed headmistress, Ylva-Maria Thompson as, "not theoretical, but very practical" encouraged anyone over the age of 16 to enrol and even to practise their homework in the mixed-sex dormitory.

"The BirdBase" has now sent out a press release to confirm the whole thing was made up and they explained they wanted to draw attention to the bad pension system in Austria. "We are campaigning against something which really affects our future. The poor pension system in Austria. "We wanted to get people talking about something. Discussing. Together we can make a difference. We can influence things. Even politics." The school admitted they had 600 genuine people interested in the project and who registered for the school. Now the BirdBase has to notify them that they will not be beginning their sex studies in the new year.



      
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