Austria’s second largest city “on the brink of bankruptcy”

Communist Party led Graz council must fend off attacks with mobilisations for more finance – No to cuts!

  • CP-Graz must not implement open or hidden cuts!
  • Vacant posts must be refilled – no staff cuts! For wage increases above the current inflation rate!
  • No to increases in council charges!
  • CP-Graz must initiate nationwide protests for more budget for municipalities!
  • Defend living standards!

We are currently in a difficult economic situation with many imponderables – the rising energy prices, the threatening gas shortage, continuously rising inflation, the pandemic which is not yet over. But so far the Communist Party (KPÖ) led city council in Graz, Austria’s second largest city, has made its name through positive headlines, quite in contrast to the scandal-ridden conservative Austrian People’s Party (ÖVP) who ran the city until last year.

So far the Graz council has neither increased the rents in social housing nor its charges. Many people consider Mayor Elke Kahr as a bright spot in the political landscape due to the frustration over the apparent impasse of the political situation – the effects of the pandemic, the disappointment with both the Social Democratic Party (SPÖ) and the Greens, the rising inflation. She consistently takes only an average wage for her political work – something none of the other parties is willing to do.

But one would have been deluded to believe that this would remain without opposition from the ruling class in times of crisis. It was clear that there would be attacks on a city government led by a communist party. Now the Graz city audit office has presented a report that “Graz is on the brink of bankruptcy”. The city audit office director and the media suggest new elections, something that made the ÖVP, right wing populist Freedom Party (FPÖ) and neo-liberal Neos opposition parties all jump with joy. The report was leaked – by whom and with what interest? To force cuts and to damage the Communist Party?

The KPÖ-Graz has tried to calm things down by saying that measures are being taken to deal with the financial situation, that new elections are not necessary and that the ÖVP regional state governor is behind the Graz city government. Does this mean that the KPÖ is relying on the ÖVP not launching any further attacks? This is naïve at best, foolhardy at worst. The measures now announced show that the KPÖ-Graz is bowing to the capitalist playing rules by withdrawing the waiving of the charge increases which was actually issued. In future, among others, sewerage charges and parking fees are to be increased. There will be no cuts in personnel and nationally agreed wage increases for federal government employees will be implemented in Graz, but vacant posts will not be refilled. Even if no one is laid off, this still means a reduction in staff and an intensification of work. As a result, the KPÖ could lose the support it currently has among the people of Graz.

Furthermore, these steps could open the door for cuts in education, social services and health, especially because the Greens, who sit in a city government coalition with the KPÖ, have already boasted that they had insisted on these “measures” in spring. But neither the Greens nor the SPÖ, the other city coalition member, are reliable partners in defending the living standards of the population, as they fully accept capitalism and the idea that cuts are needed when the budget is tight.

The very fact is that Graz is facing a massive mountain of debt – but not due to the KPÖ-Graz. The massive increase in debt began in 2017 under the leadership of the ÖVP (in coalition with the FPÖ) and the question arises why the City Audit Office only intervened 5 years later – just when the ÖVP was replaced by the KPÖ as Graz’s biggest party. Furthermore, it must be noted that every third municipality in Austria is confronted with such financial difficulties due to the crisis situation with war, energy costs and inflation.

Now, in this situation, the KPÖ-Graz could set a national example by starting the mobilization and struggle that are necessary in order to fight for and secure improvements – especially as the KPÖ Mayor Elke Kahr emphasises again and again that she represents the socially weak. This would be in complete contrast to the established parties. However, in order to do this effectively, the KPÖ-Graz must build a movement that does not accept the rules of capitalism.

The socialist-led Liverpool City Council in Britain in the 1980s led a fight against the then Prime Minister Thatcher, who was putting financial pressure on Liverpool and many other local councils. The Liverpool City Council mobilised the working people of Liverpool in mass mobilisation to get the right-wing Thatcher-led federal government to provide additional funding and was able to do so for a time. But such a struggle requires a willingness to mobilise and a perspective that is prepared to break with capitalism. It is also important to build a nationwide movement so that Graz does not remain isolated.

It is necessary that the KPÖ-Graz now openly discloses the city’s finances, so that it is clear how much is missing and so that it formulates demands to the federal government regarding the financial burden equalisation, so that there is enough money for the defence of the standard of living, for the implementation of the programme for which the KPÖ-Graz was elected and against cuts.


On October 14 there was a demonstration by the KPÖ-Graz against inflation. Now on November 15 the KPÖ-Styria, the regional party, is organising a demonstration of workers in the healthcare sector. These are good first steps, but not enough. Nationally the universities have recently demonstrated for more finance – Graz can do the same. It must also campaign and mobilise for this, then it could perhaps set an important example of how to fight. The KPÖ could call on other municipalities to also protest for more budget. The League of Cities and Towns is demanding from the federal government 500 million euros in energy cost compensation and a renewed investment package of 500 million euros in social infrastructure. The KPÖ can take this up with its own campaign – as it is doing with the energy cost equalisation – and initiate and expand protests. Because it is demanding energy cost equalisation, and it is mobilising, but on other issues. It should underline the demand for energy cost compensation and more money from the federal government with protests! These could join those of the universities and those of the trade unions in the wage rounds.

In the long run, and especially in times of crisis, the defence of social achievements and the struggle for social improvements is necessarily linked to a perspective that must go beyond capitalism and not allow itself to be blackmailed by its constraints. The KPÖ-Graz would have to link possible protests with the current crisis of capitalism – because this is ultimately the cause of the budget problems.

Recently Ernest Kaltenegger, the previous leader of the KPÖ in Graz and now its regional leader, stated at the 100-year celebration of the KPÖ in Knittelfeld that capitalism can no longer solve the problems it creates. Kahr should now propagate this in public! The KPÖ should, as SO does, use the crisis to argue for a socialist alternative to capitalism – a real socialist society, with a democratically planned economy, starting with a sustainably planned energy sector, according to the needs of the people and the planet instead of profits. Such a society must be distinguished from the former Stalinist states by genuine workers’ democracy.

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November 2022