Economy: Bavaria and Austria want to move closer together
The Free State is one of the most important trading partners of the Alpine republic. In times of crisis, the two look for even more things in common. There is a consensus on one topic.
They were brought together not only by a close friendship, but also by hardship: everyone with a reputation in the Bavarian and Austrian economy met on Monday in Vienna’s 5th district. In the headquarters of the Austrian Chamber of Commerce (WKO), in the “Christoph-Leitl-Lounge” on the 12th floor with an outstanding view of Vienna, the host, WKO President Harald Mahrer, invited to the top-class, quasi-bilateral business meeting: “Austria, Bavaria and the new German traffic light: Reforms for future economic viability” is the title of the summit organized jointly with the Economic Research Institute (WIFO), to which, among others, Mahrer’s counterpart in Bavaria, Wolfram Hatz as President of the Association of Bavarian Business (VBW), and VBW chief executive Bertram Brossardt were upset.
A demonstrative display of the closest economic ties and friendship – the annual export volume from Austria to Bavaria is around 17 billion euros. For Austria, the Free State is central as a trading partner and cannot be compared with any other German federal state, stressed the host Mahrer. In the afternoon, economists and government politicians, including Austria’s Labor Minister and now also Economics Minister Martin Kocher and Finance Minister Magnus Brunner (both ÖVP) discussed debt, taxes and the labor market on the podium.
The event had been planned for a long time, said VBW boss Hatz in his opening statement, even when it was foreseeable that the SPD would no longer be the chancellor in Berlin, the CDU/CSU wanted to network even more closely with the Austrians . But then Corona thwarted the plans – and now Putin’s war of aggression is pushing the traffic light issue into the background.
CSU Minister of State Herrmann warns of “stupid winter”
“In the meantime, however, it has once again been shown that coalition agreements are agreements with an expiry date and are often overtaken by a new reality,” says Hatz. The multiple crises are ringing alarm bells on both the Bavarian and Austrian sides. It’s – not only, but above all – about the gas. And thus also about securing Bavaria as an industrial location. “Dangerous dreams” are the discussions at European level about an embargo for Russian natural gas, according to the WKO boss. VBW Managing Director Brossardt got into the same horn: Austria and Bavaria are now asking for “steadfastness” at EU level when it comes to opposing those EU states that are less dependent on Russian gas.
The Bavarian CSU Minister of State Florian Herrmann made his “request to the Austrian federal government” via video connection that the gas storage facilities in Haidach in Salzburg be filled up as quickly as possible. Around two-thirds of the storage facilities there are practically empty, Hatz and Brossardt emphasized in an interview with our editors: “Of what is there, around 40 percent goes further in the direction of Tyrol and Vorarlberg – hence our request that Germany and Austria come together in a unified regulation coming. Otherwise we’ll both have a stupid winter.”
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The gas storage facilities belong to Gazprom
The WKO boss passed the ball on to his own government: as early as March, shortly after the outbreak of war, he urgently warned about the issue in Vienna, according to Mahrer, who also did not spare his criticism of Austria’s green energy minister Leonore Gewessler. Mahrer accused her, partly openly, partly between the lines, of inactivity: “I wish she would talk to her colleague Habeck more often.” The background: The gas storage facility in Haidach is the second largest storage facility in Western Europe – and also an important distribution point especially for Russian gas. The four plants can accommodate a total of around 3.5 billion cubic meters. The “Austria Bavaria Gas Pipeline” runs from Haidach to Burghausen in Bavaria.
However: The Haidacher plant belongs to the Russian Gazprom and the German Astora GmbH, which however belongs to a Gazprom subsidiary. The Austrian Rohöl-Aufsuchungs-Aktiengesellschaft (RAG) owns a third of the property – so it is hardly surprising that Bavaria is pushing for an agreement with the Austrians to secure gas supplies from Haidach to Bavaria.
Electricity should be cheaper
Despite all the fears of an EU gas boycott, the Austro-Bavarian Alliance agrees that the EU should then be asked about electricity price controls. Together they advocate a reform of the so-called merit order, the electricity price auction process. To put it simply, this is how it works: If there is a demand for electricity, the power plants that produce the electricity later come first. Only when the demand is fully met does the power plant whose electricity is most expensive for consumers determine the electricity price: in the current situation, these are gas-fired power plants. The EU should now change that so that electricity prices become cheaper.
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