Austrian workers struggle to defend living standards as political instability worsens

Sozialistische Offensive (CWI in Austria) stall at a trade union protest in Vienna, September 2022

On Sunday, 25 September, the governing conservative Austrian People’s Party (ÖVP) took a hit in the regional elections in the tourism-based alpine Tyrol region, writes Laura Rafetseder, from Sozialistische Offensive (CWI in Austria). The ÖVP lost over a fifth of their previous votes, falling from 44.2% to 34.7%. Still, such were the fears that they could lose around half their votes, based on polls published a few weeks before the elections, the ÖVP was relieved it only fell to 34.7%  and actually presented themselves as victoriously emerging as the strongest party.

No matter how you look at it, it was still a disastrous result for the party that had been in trouble ever since former prime minister Sebastian Kurz was forced out of government in 2019 following corruption scandals. The ÖVP used to rule the Tyrol with an absolute majority – they are far from that now. This is due to the disappointment with the coalitions of ÖVP and the Green Party in both the national and the Tyrolian regional governments, which have failed to solve any of the problems they are currently faced with. Given the regional effects of climate change on the region, which is heavily dependent on tourism, it is all the more astonishing that the Greens lost support, as well, but then they have been in a regional governing coalition with the ÖVP.

The national government is muddling on despite the losses in the Tyrol, but tensions between the partners will increase, given that they each try to hold on to what is left of their former base. In recent national polls, the ÖVP has declined from 37.5% in the 2019 elections to 20%. The government is highly unstable and deeply unpopular. Chancellor Karl Nehammer was the “most unpopular head of state” in a 2022 international poll, by ‘morning consult’, with a minus of 42 Points.

This is against the background of rising inflation (9.3% in August), an extremely uncertain economic situation and mounting anger about the cost of living crisis, as well as fears on whether people will be able to heat their homes given the rising energy costs. Food prices are increasing. There are reports about pensioner couples committing double suicides because they are not able to afford care.

As in many parts of the world, instability is the main characteristic of Austrian governments, nationally and regionally. Events are moving so fast that this article probably will be out of date almost soon as it is published. This is in stark contrast to what was in the past (and especially in the 1970s) when Austria was dubbed the “island of bliss”, with global developments only arriving years later (like the movements of 1968).

Mounting problems and multiple crises

The problems are mounting; first the pandemic, now the energy and cost of living crisis, on top of the climate crisis, in addition to an economy highly dependent on Russian gas (up to 80%), tourism, the German auto industry, and Italy.

Both Austria’s biggest trading partners, Germany and Italy, face crises, with a recession looming in Germany and Italy facing a debt crisis. There are estimations that if Russia cuts off the gas, one-third of the Austrian companies could not continue production. This is in addition to the still continuing uncovering of the corruption scandals involving the ÖVP, which is keeping the party on high alert.

The government coalition of ÖVP and the Greens is still in power because of a lack of alternatives and because both government parties fear being severely decimated in any new elections. Also, several regional and local elections that are important to the ÖVP are impending (five, in total, in 2022 and 2023 – the regional election in Tyrol being the first of those). Such is the crisis, that in areas where they once ruled with absolute power and more than 50% of the vote, like in the Tyrol or Lower Austria, they might suffer more humiliating defeats. Each of those elections could trigger an acute crisis and leadership debate in the ÖVP, and a downfall of the government. To a certain extent, parts of the ruling class are worried about the “Italianisation” of Austrian politics, with the possibility of them losing their traditional party and fragmentation of politics.

There is a possibility of the remaining ‘Kurtz loyalists’ forming their own party. In September, the confidante of former Chancellor Sebastian Kurz, Laura Sachslehner, resigned as general secretary. This was after she had adopted the far right FPÖ, Freedom Party’s demand that asylum seekers should not get the “climate bonus” ( one of the benefits supposed to ease the gas price hike for the population). As Sachslehner made this a coalition requirement and put it as an ultimatum to the Greens, Chancellor Nehammer, worried about the stability of his government, asked her to resign. Sachslehner went back to the Vienna ÖVP, where she now sits as a city councillor. The Vienna ÖVP is said to be the last refuge of the wing of the ÖVP that is more inclined to a more right populist approach, following the footsteps of Kurz, and is partly in conflict with the federal party.

The Greens have not been able to live up to the hopes placed in them to alleviate the climate crisis. On the contrary, they have had to switch from gas to coal in one energy plant in Carinthia. In addition, Austria, which traditionally had a high proportion of clean electricity because of the high percentage of water power plants, is now facing problems as the dry summer is leading to less electricity from the water plants. The Green party’s climate and energy’ Minister, Leonore Gewessler, is now struggling to handle the energy crisis.

Beginning of unrest in the industrial field

While the government is trying to manage the multiple crises, there is also unrest from below which is beginning to express itself in the industrial field.

On September 17th, thousands marched in demonstrations organised by the Austrian Trade Union Federation, the ÖGB. According to the union leaders, 20,000 marched in Vienna and a further 12,000 in several regional cities. The numbers might have been even smaller, in reality, as the union leadership had failed to properly mobilise in the workplaces, only focusing on “prices down” (this was the official slogan of the demonstrations) and not taking up the question of wages and income. The numbers were a fraction of what the ÖGB is able to mobilise. In 2003, 200,000 marched in a union demo against pension cuts. In 2018, 100,000 protested against the government increasing the maximum working day to 12 hours.

The most visible part of the demonstration was the pensioners with their demand for a ten per cent increase in pensions. Still, it was very important that the demonstrations took place so that the issue of inflation could not be abused by the far right.

Despite the union leaders trying to separate the demonstration from the impending wage rounds, it was officially seen as the starting point for the wage negotiations. Two days later, on Monday, September 19th, the metal workers’ union, which represents 200,000 workers in a small country of just under nine million inhabitants, officially announced their demand for this year’s wage negotiations. At 10.6%, this demand just covers current inflation, which was at 9, 3% in August. Still, this is higher than what the union leaders had originally intended, as a result of the rising pressure from below and in the workplaces. The ÖGB also announced that they aim to fight for a minimum wage of 2,000 Euro before taxes, across all sectors, which means they would need at least some kind of coordinated action to fight this through.

The ÖGB leaders have a tradition of using the so-called “Benya formula”, named after trade union leader, Anton Benya, who proclaimed this “formula” in the 1960s. His idea was that pay claims should include both the average inflation of the previous year, as well as an increase in productivity. After the neoliberal offensive in the 1990s, this formula was partly abandoned in favour of wage rises just above inflation. The key thing is that the ÖGB leaders insist that the inflation rate that is to be the basis for negotiations needs to be the average one of the past year. Today, this means that they can sell anything above 6.3% (which currently is the average inflation) as real wage increases, when, in reality, it is a real wage loss. In times of sinking inflation, such an average inflation rate of the past year can be beneficial to workers but now it seems like the ÖGB is merely trying to negotiate the past. There had been a study that concludes in Austria real wages in 2022 are expected to fall by 4.2% whereas the EU average is 2.9%. At the same time, this now means mounting pressure from below.

The biggest tabloid newspaper in Austria, the Krone, leaked this 6.3% figure in early September implying this was the metal workers’ demand. This is leading to a situation in which the union leaders had to distance themselves from this and promise that the actual demand for the autumn pay claims, which are traditionally opened by the metal workers, will be higher. Still, they did not announce the actual demand before the September 17th demo. The 10.6% demand and connecting the demonstration to the wage rounds and an escalation plan, including a one-day cross-sector strike, could have massively mobilised and would have made the demonstration an impressive show of force.

Still, the 10.6% demand now means that there could still be class struggles and at least warning strikes by the metal workers on the cards. The bosses already made clear they want restraint because of the energy crisis and impending recession. The ÖGB leader, Katzian, had to publically renounce attempts by the EU Commission to attack the right to strike, which is an indication of the pressure from below.

The metal workers traditionally are the first sector in the wage negotiations in autumn and they are the best-organised part of the Austrian working class. There were strikes in 2011 and 2013 for higher wages and against attempts of the bosses to divide the sector into different contracts. The rest of the working class knows if the metal workers get a bad result in the negotiations their own wage rises will be even lower. This means the metal workers do have high support from other parts of the working class.

The fact that the demonstration took place and that the unions appear to have a bit more of a combative stance than in Germany is probably down to the fact that the social democrat SPÖ, to which the trade union leaders are still closely connected, is in opposition nationally. This means that the trade union leaders feel they have a little bit more room to manoeuvre than in Germany where the SPD is in the government, but this is only up to a point. This meant the trade unions had enough room to mobilise for a national shop stewards conference on inflation in spring and now called the September 17th demos. These actions have left less ground for the far right. As opposed to what the media were trying to imply, in contrast to during the pandemic, no big demos by the far right are currently taking place. There were two smaller demos on inflation and energy, both were organised by the left and none of the far right managed to intrude. Of the smaller mobilisations from the anti-covid camp, none was big enough to make the news. Yet, soon as the SPÖ enters into government again, the trade union leaders will again be pulled back into supporting the government and will consequently try to keep a lid on the struggle.

Presidential elections

That also means the threat of right-wing populism is not off the table, given this prospect and the vacuum on the left in the political arena.

In the presidential elections, on October 9th, four of the seven candidates are right-wing populist candidates. The president has mainly representative duties but is also head of the army and is in charge of government formation and can potentially remove it from office. To a certain extent, they base themselves on the yellow vest-type anti-vaccination movement during the pandemic. All of them have to take up inflation and Austria’s long-standing “neutrality” policy – i.e. not joining Nato or taking sides in the Ukraine war. For now, it is not racism that is dominant in the discussion, as it used to be, except for the attempts by the FPÖ and ÖVP to deflect anger to asylum seekers in relation to the “Klimabonus”.

The far-right Freedom party, polling at 18%, is the one most likely to get into a second round. In 2016, the presidential elections were polarised between the FPÖ candidate Norbert Hofer – who had indicated at the time to make use of the president’s powers – and now president and Green party candidate, Alexander Van der Bellen. Now Van der Bellen is the preferred candidate of the ruling class, backed by both the ÖVP and SPÖ, and far ahead of all the other candidates in the polls.

One of the right populist candidates is from MFG (“Menschen Freiheit Grundrechte”) who also were elected into the regional parliament in Upper Austria in the middle of the pandemic. Another is a former columnist around whom a right-wing populist project from the ranks of those formerly close to Sebastian Kurz could emerge.

The most serious contender to the FPÖ making it into the second round is the so-called “Bierpartei” (“beer party”) which is basically a satire project designed as a vehicle for non-right-wing protest votes. In the absence of any genuine working class party, they do gain support and poll at 14% currently. Potentially they could be seen as a vehicle to keep the FPÖ and the far right out of the second round of elections. Though its candidate, Dominik Wlazny, insists that he is neither left nor right, some see him as left-wing, as he has an anarchist background. While including some social rhetoric in his election posters, he is not fundamentally different from the establishment parties when it comes to crucial questions. In an election debate, Wlazny made clear that he supports the EU, supports the sanctions on Russia and has demanded a reform of the army (staying vague on in which direction) while supporting “Neutralität”. Yet, he can pick up support as an anti-establishment candidate who is not right-wing. Support for the “beer party” can be fleeting, as Wlazny does not put a clear working class alternative and in effect supports capitalism.

No party is immune to crisis

While the far-right freedom party (FPÖ) and the pro-capitalist social democrat SPÖ still do relatively well in polls, both are not immune to crises, rifts and debates either.

Since HC Strache had to resign after the Ibiza Scandal, Herbert Kickl has taken more taken control of the FPÖ and pushed contender Norbert Hofer to the side who favoured a more “responsible” course and represented a wing that was in favour of seeming more reliable for the ruling class so they could be considered government-worthy. Kickl meanwhile sought to ride the anti-vax movement which had more of an anti-establishment tone. This conflict was visible again in a conflict between the Vienna FPÖ and Kickl over attempts of the latter to boycott the Vienna party.

The social democrats suffered a blow at the beginning of September because of the crisis of the publically owned “Wien Energie” energy company, which is owned by the SPÖ ruled Vienna City. In order to save the company, Vienna Mayor Michael Ludwig gave securities with public money, but did not tell anyone. But the SPÖ was just carefully obeying the capitalist law to the letter – as a mayor of a city, Ludwig does have this power and because of the liberalised markets, the manner in which  Wien Energie acted on the markets was perfectly in tune with the legal situation and common practise among energy companies. The SPÖ was simply managing Wien Energie along capitalist lines and fully taking advantage of the liberalised energy markets. The liberalisation was prepared in the 1990s by ÖVP and SPÖ and was a condition for joining the EU in 1994. The law on liberalisation was then passed in 2001 by ÖVP and FPÖ. The crisis-ridden ÖVP had tried to use a supposed “scandal” of “speculation” to deflect attention from their own corruption. But the ÖVP fail to mention that they were responsible for liberalisation of the energy markets and the energy companies under their influence use the same market instruments.

The “scandal” reveals the devotion of the SPÖ to the markets and managing capitalism, and what they would do if they were in power. SPÖ Chair, Pamela Rendi Wagner, for example, demanded renationalisation of the OMV but the SPÖ does not mobilise for that. And the SPÖ does not question how the Vienna SPÖ runs Wien Energie as a capitalist company and they do not call for de-liberalisation of the energy sector.

While they stagnated in the Tirol elections because of their insistance on a coalition with the ÖVP, the SPÖ do poll relatively well on a national level. The SPÖ is likely to be in the next government in one way or another, but it is not clear really how exactly this will pan out. There could be an “Ampel” (traffic lights coalition) with Greens and liberal NEOS, like in Germany, but the SPÖ has points of conflict with them. The SPÖ in Vienna used to be in a coalition with the Greens and now is in coalition with the NEOS, in both situations have been the dominant partner. With the Greens, the Vienna SPÖ heavily disagrees over the building of a highway in Vienna’s northeast Aspern region, which was supposed to affect a nature protection area.

The preferred federal coalition partner in the eyes of Vienna Mayor Ludwig would be the ÖVP. On this, he is on the same page with the trade union leaders in the SPÖ, who prefer the ÖVP as a means to hold on to the so-called “Social Partnership” with the bosses. The former ÖVP regional governor of the region of Styria recently admitted, before resigning, that the role of the SPÖ in a “grand coalition” with the ÖVP was to hold back the unions. Germany, in turn, is a warning, of what the politics of an “Ampel” could look like.

The question is if the SPÖ and ÖVP would still have a majority together and whether they manage to leave the conflicts of the past behind (Sebastian Kurz had famously broken with the tradition of grand coalitions in Austria). Former SPÖ chancellor Christian Kern was rumoured to be at the centre of a potential split from the SPÖ. But this would have been in a liberal direction, aimed at urban middle-class layers and turned out to be just a vehicle to pressure the SPÖ into a coalition with the Greens and liberals. But even if the SPÖ manages to put together such a government, they will struggle with containing and managing the crisis, and Germany shows what kind of politics such a coalition would implement.

A factor that is a little bit unpredictable is Ernst Doskozil, the SPÖ governor of the Burgenland, the smallest region in the very east of the country. He models himself after Sarah Wagenknecht, in Germany, the Left Party figure, at the same time as giving in to racism. For example, Ernst Doskozil criticised the demand of the trade unions for a 2,000 Euro minimum wage before taxes as too low. At the same time, Ernst Doskozil echoed the FPÖ demand of asylum seekers not getting the climate bonus. Like Wagenknecht, he can be a complicating factor in the mix.

Communist Party Mayor in Graz

Regionally, the Communist Party Graz is also a factor in the political mix. Since its September 2021 election victory that brought it office, the CP Graz has terrified the ÖVP into anti-communist rhetoric. However, Elke Kahr, the “communist mayor”, still has to show what she has achieved in office. While the CP has announced that it will not raise rents and fees – which is in stark contrast to what the SPÖ in Vienna does – it is falling to take Graz Holding and with it the local energy company back into public hands, which it had promised in its 2021 election campaign. This is justified by referring to the EU regulations and the debt inherited by the former ÖVP city government.

There are cuts in schools and child care. The subsidies to Graz Holding were stopped to save money. In the recent energy debate, the CP raised a pooling model for the common use of energy of the local energy producers, but on the basis of a public-private partnership model. Public-private partnerships are currently failing throughout the whole energy sector. The complete energy sector should be nationalised under democratic control and management by the working class so that a democratic plan can be established. Instead, the CP passed on the opportunity to mobilise the working people in favour of re-communalisation of Graz Holding and using the profits for the budget.

They also failed to mobilise the population to pressure the federal government into granting them more money. Whether the city of Graz under a CP Mayor can be a model for others will depend on whether they are ready to break with the capitalist rules to avoid cuts and to defend living standards.

Still, the CP Graz still has the potential to reach out on a federal level and to call for a new workers’ party. Potentially this can see a left alliance with LINKS, which holds several district councillors in Vienna along with the CP councillors. But these parties are instead moving more in the direction of being a ‘green party 2.0’, focusing on climate change and identity politics. It does not have an approach to the wider sections of the working class and does not attempt to transform the trade unions into fighting and democratic bodies.

Build a party for the working class!

There is a danger that the current crisis could benefit the far right if we do not succeed to build a genuine party of the working class.

There are constantly rumours about new parties and projects. New parties are in the air, which is an expression of discontent with the existing parties. With inflation and energy being the dominant issues, this could for the first time mean that those issues will be to the fore in public opinion. This is a more favourable ground for a new party of the working class to emerge, together with potential class struggles.

The mood is beginning to radicalise – during the last three years, all that was known was turned upside down. When doing paper sales as “Sozialistische Offensive”, campaigning for an alternative to this rotten system of capitalism, we meet increasingly young people who look for Marxist ideas, who are especially interested in the CWI pamphlet, ‘An introduction to Marxism”. Nationalisation of energy is accepted in public opinion as the only way out of the crisis yet there is no party to implement it. The ÖVP did not even manage to use the Wien Energy liquidity crisis to call for privatisation, because it was exactly the private markets at the heart of the problem. While we were told by sections of the media that Putin still represents communism, with the death of Mikhail Gorbachev the media had to concede that there was a capitalist restoration in the former Soviet Union. To a growing layer of the population, doubts about the system we live in mean they are increasingly looking for answers to the question “What is the alternative?” A planned society is still associated with the bureaucratic distortions of the Soviet Union. But there is the beginning of questioning and the potential to build support for the idea of breaking with capitalism and replacing it with a socialist society – a society democratically planned according to the needs of the working class, not according to the profits – even in the former “island of bliss”, Austria.



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October 2022