After Flattening the Curve, Austria Takes a Gamble
Under political and public pressure, Austria has begun to reopen the economy. Will that backfire?
VIENNA—Wear a mask, keep your distance, and welcome in! On April 14, Austria became one of the first countries in Europe to try to reboot its economy. It won’t be an easy task.
While residents queued in front of home-improvement stores Tuesday morning to buy garden furniture, tomato plants, and lettuce seeds, shopping boulevards packed with small businesses remained quiet. On Vienna’s once bustling Mariahilfer Strasse, storefront signs detailed protective shopping requirements—masks and social distancing—but there were few customers around to read them.
“I’m relieved to be back,” said Alexander Roth, the owner of two jewelry stores on Mariahilfer Strasse, one of which is still closed. “But I don’t have high expectations for this week. Or the next,” he said, speaking through a surgical mask.
The coronavirus pandemic has crippled European economies, but as infection rates have decreased, Austria has begun to roll back its emergency restrictions. Since March 16, all nonessential shops have been closed—along with schools, workplaces, playgrounds, restaurants, and cafes. Now, stores smaller than 4,300 square feet, home-improvement stores of any size, and federal parks have been allowed to reopen; larger stores are set to follow in May. Other European countries, such as Denmark, have prioritized schools, but in this small Alpine nation, mounting political and economic pressure has led the government to focus on small-business owners first.
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A 38-billion-euro ($41 billion) crisis fund and Chancellor Sebastian Kurz’s proclaimed “cost what it may” approach failed to keep unemployment from skyrocketing. More than half a million people out of Austria’s 9 million are now without work—a 66 percent increase in unemployment in a single month and the highest rate of unemployment since records began in 1946. Another 600,000 are on “short-time work,” a scheme in which workers—many of them employed by shuttered small businesses—continue to receive around 80 percent of their salary, nearly all of it paid by the government. Economists warn of an unprecedented tidal wave of bankruptcies to hit in the coming months as savings diminish, plus a subsequent corresponding unemployment spike.
The need to reopen extends past the economic to the social and political. Calls for a reopening have been particularly acute in Vienna, home to nearly one-quarter of Austria’s population—and boasting a population density 45 times higher than the country’s average. While other Austrians enjoyed use of their private gardens and cars, many Viennese seethed. The crisis quickly laid bare social fault lines in one of the world’s wealthiest nations. Leaving the house was still allowed if necessary, including to go for a walk. But in more than 17,000 cases nationwide, police deemed outings unnecessary, and fined people up to 500 euros for infractions such as lingering on a park bench or not meeting social distancing requirements while playing with their children in public spaces.
Adding fuel to the fire, the federal government shut down its large parks, the only green space for many urbanites. Families seeking respite from self-isolation crowded into smaller city-managed parks—paradoxically left open. The closure quickly became a political issue. With city elections slated for October, the socialist-led city government attacked the conservative party of Kurz and the minister responsible, Elisabeth Köstinger, as unempathetic and out of touch with the needs of the Viennese. Köstinger fired back, saying the entrances to the parks were too tight, and was ridiculed with memes that compared the park’s broad imperial gateways to the tight entrances of grocery stores. For the conservatives, the closed parks became a political liability and serious obstacle to doing well in the mayoral race. The public’s frustration began turning into anger. “Open the federal gardens!” tweeted citizens and politicians such as Vienna’s mayor.
Weighing the effectiveness of its coronavirus response, the government did just that. Austria has been one of the most successful countries in Europe at handling the pandemic. While neighboring Italy has more than 2,800 cases per million people, Austria has about 1,600 and a fatality rate less than one-eighth of Italy’s. Apart from the early lockdown, a rigorous mobile testing and health monitoring program caught cases early and kept people at home. Just 10 percent of cases have ended up hospitalized, such a low rate that three-quarters of the country’s intensive-care unit beds remain vacant and patients from Italy and France have been taken to Austria for treatment. Ten days after the lockdown was imposed on March 16, the number of new cases peaked with 971 infections. It has fallen steadily since. On Tuesday, the day stores reopened, the health ministry recorded just 142 new cases. The rate of infections, once doubling every few days, now doubles only every two weeks. Of the more than 14,500 who have been infected, according to the government, fewer than 380 have died. This success, the government said in daily press conferences, was owed to the public, which, for the most part, took the crisis seriously and remained in self-isolation. When Kurz talks about the reopening of the economy, he makes it sound like a well-deserved reward.
But while the public health response has been stellar, far less planning has been done for the so-called second phase—the partial reopening of the economy while keeping the virus at bay. The government lacks a clear strategy to effectively trace and contain new infections, which could result in another surge of infections.
“It’s not a decision based on evidence, but a political move,” said Thomas Czypionka, head of the Health Economics and Health Policy group at the Institute for Advanced Studies in Vienna and a visiting senior research fellow at the London School of Economics and Political Science. Without a clear strategy on how to detect and contain new cases, the rate of infection could increase again.
The best way to continue to contain cases would be the anonymous and voluntary collection of health data already measured by devices such as Polar Watches or Fitbits, Czypionka said. Anomalies within a group of people in close proximity to one another could point authorities to potential clusters. The clusters could then quickly be contained. “If 60 or 70 percent of the population donate their data, that would suffice,” he said.
But that’s not part of the government’s plan, and it likely won’t be. The media and the public reacted angrily after a senior politician proposed a mandatory app that would trace people’s contacts. Instead, the focus will be on trying to protect the elderly and high-risk groups by asking them to isolate themselves, to test all residents of nursing homes, and to find clusters by testing people when they show symptoms as quickly as possible. If necessary, an affected village or community could be placed under quarantine—the same strategy employed before the nationwide lockdown, when the rate of new infections was dramatically rising.
As people go back on the streets and mobility increases, social distancing and obligatory masks might not be enough to keep the virus at bay. The worst-case scenario is an onslaught of new infections that forces another shutdown of the entire economy. “We can’t rule out that there’ll be another nationwide shutdown,” Clemens Martin Auer, one of the government’s top advisors for the pandemic, told Foreign Policy.
While the government hasn’t been shy about communicating the risks, it’s also placing the burden of whether the second phase will be a success on the public. The thrust: If the curve goes back up, it’s because people didn’t behave.