Federal Chancellor Christian Kern spent an evening with inquisitive entrepreneurs from AustrianStartups in the over-crowded co-working space, sektor5. Our Editor-in-Chief, Margaret Childs was present and came prepared with her own questions.


You can find the translation of his answer below:

Margaret Childs: There are a lot of employees that help making these companies great and I’ve heard that you’re planning to favor Austrian workers before other EU-citizens in the labor market. But if you’re restricting the employee pool that way, how are we supposed to build great companies if the government prefers Austrians?


Christian Kern: That’s a very serious discussion and I have to stress that this has nothing to do with populism. There are worlds between what the FPÖ is saying and what the actual issue is. But… what’s the situation in Austria? We saw that we created more jobs than almost any other European country last year. If you look back until 2008, there are 200,000 new jobs in Austria. At the same time, we have seen an increase of people from neighboring EU countries in the Austrian labor market. This didn’t contribute to a decrease in Austrian unemployment despite this very positive record… and it increased further. We are moving towards 500,000 unemployed people in Austria. 100,000 of those are non-Austrians. I’m just stating this fact, not because I find it to be important, but because that’s the situation. The reality in Europe is, that we have pay gaps from Romania, to Hungary, to Slovenia, an extreme on in Bulgaria, that is up to a quarter less than what we earn in Austria.

That means everybody that has the chance to come to Austria, and that’s the situation within the EU and its freedom related framework. Everybody who can get a work permit will come to Austria if it’s in any way possible. What big fear in this case is, that despite these labor market dynamics, we will still have an increase in unemployment. And there are two problems connected to this. First of all, unemployment costs us 8 billion Euros in Austria. If we could halve that number… just think about how much we could invest into startups in Austria with that amount.

The second thing in this story is: People lose their perspective and dignity when they’re unemployed. I think that unemployment is a socio-political scandal. It does something to people. And in my opinion this is unacceptable in a society. That means we need a method to combat unemployment. We will not restrict the personal freedom of EU citizens. Everybody who wants to come should come. Restrictions in that matter wouldn’t even be possible because we can’t override EU law. But what we can do is making it easier for people that are unemployed, looking for work or want to switch jobs. And I want to stress again: This has nothing to do with your birth certificate, nothing. Because we’re also responsible for people with a foreign birth certificate in Austria. And the actual problem lying behind that…Pauses.. Please excuse me but I think it’s important that my thoughts are understood as a whole. I’m convinced that our future is Europe. There’s no problem in this world that we, as a “small” Austria or even “big” Germany, can’t fix easier as a part of the European community. No matter if it’s a question of migration, unemployment or climate change. Only if we stand together in Europe we have the ability to advocate our interests.

And that is more important than ever because in the 60-year history of the European Union we are experiencing the first American president that openly admits, that he wants to weaken Europe. And we also know, that there are countries in our eastern neighborhood, that that are interested in weakening Europe from a geo-strategic standpoint. That makes sense because they can enforce their own interests better that way. And if we stand together as a European principle in this situation, that we have to be ready to practice solidarity and also be present when making decisions that are uncomfortable. Personally, I think that the CETA trade agreement is really problematic. Through negotiations we have reached a place where it barely works. I know that if we would do a poll in Austria, 85% of the people would not want to have this trade agreement with Canada. As chancellor I said: I can understand that but in the sense of a European responsibility, in this time of the challenge to not weaken Europe, we will still sign that agreement. And we did. It’s not popular, there’s a lot of critique on the matter… but it was out of this responsibility. But then I also expect, that we don’t define solidarity as a one-way street in Europe. And Europe’s problem was well put by Jacques Delors, a former president of the committee: Nobody falls in love with an internal market. I’m convinced that the European… but this has to mean that we are allowed to practice critiquing in a spirit of solidarity. If we only talk about competitive ability in Europe, only about locational advantage, only about deregulation, we forget that it`s about the people, who are maybe not as dynamic as all of us in this room right now and don’t have so many chances or believe in the future, and their interests. If we forget about those people, we’re going to have a problem. And at this point…. This is what’s happening in Europe right now: A big part of work related migration (180000) works with the posting of workers.

This answer is getting complicated and I’m sorry. But for example: A company in Slovakia wins a contract in Austria because they’re practicing wage dumping. They say they`re paying correctly but then there a return flows and the like. We catch them and issue a fine because equal pay for equal work is an important principle for us, we send the fine somewhere to Košice and it doesn’t get paid. If you go to Udine today and have some coffee, enjoy the sun and park your car in the wrong spot, the Italian authorities will find you and you will pay those 90 Euros. I know what I’m talking about. But in this case it’s about million euro fines that are ignored. And now we said: This can’t happen in Europe, we want new regulations for this phenomenon. And now we have 11 countries that don’t want to participate because “we want people to come”.

But in Austria we are losing tax payments, jobs and we’re losing contracts for our companies. And what I’m saying now is: Fine, but we can’t permanently accept that fact because first and foremost I`m representing the Austrian people… 8,77 million Austrians and non-Austrians that live here. And that’s why I’m asking for an understanding to say: If we want to take Europe seriously, we want a social component as well as a social balance, then you have to make decisions and say: Friends, we have reached the point of no return. And that’s what’s my issue here: I want a different form of Europe, I want us to practice and to admit to solidarity… but I’m also expecting the same from the others. And if we’re not getting that, then we have to put our own measures in place. And that’s the complicated version of the basic thought, which I could document with many long numbers as to why I’m concerned in this matter and I think this is the right measure. But this also means, that we said: There are exceptions on the Austrian map. People are getting this employment bonus. But like I already said: You can bring people into this country, those are rules we’ve always had, but we won’t pay additional subsidies for that. That’s the only point.