Economy: Bavaria and Austria want to get closer

The Free State is one of the most important trading partners of the Alpine Republic. In times of crisis, both are looking for even more common features. There is one thing everyone agrees on.

They were united not only by a close friendship, but also by hardships: everyone known from the Bavarian and Austrian economies met on Monday in the 5th district of Vienna. At the headquarters of the Austrian Chamber of Commerce (WKO), in the “Christoph Leitl Lounge” on the 12th floor with an amazing view of Vienna, the host, WKO president Harald Mahrer, invited a first-class, quasi-bilateral meeting: “Austria, Bavaria and the new German traffic lights: Reforms for future economic profitability “is the title of the summit organized jointly with the Economic Research Institute (WIFO), for which, inter alia, Mahrer’s equivalent in Bavaria Wolfram Hatz as The president of the Bavarian Business Association (VBW) and VBW CEO Bertram Brossardt arrived.

Demonstration of the closest economic ties and friendly proximity – the annual volume of exports from Austria to Bavaria is around EUR 17 billion. For Austria, the Free State is a central trading partner and cannot be compared to any other German federal state, emphasized host Mahrer. In the afternoon, on the podium, economists and government politicians, including the Austrian labor minister and now also the economy, Martin Kocher, and finance, Magnus Brunner (both from the ÖVP), discussed debt, taxation and the labor market.

The event was planned for a long time, said the head of the VBW Hatz in his opening speech, even as it was foreseeable that the SPD would no longer be chancellor in Berlin, the CDU / CSU wanted to work even more closely with the Austrians. But then Corona thwarted plans – and now Putin’s war of aggression pushes the traffic light issue into the background.

CSU Herrmann, Minister of State, asks Austria to fill its gas storage tanks

“In the meantime, however, it has been shown once again that the coalition deals are contracts with an expiry date and are often overtaken by new realities,” says Hatz. Numerous crises sound the alarm on both the Bavarian and Austrian sides. It is – not only but above all – about gas. So also about securing Bavaria as an industrial location. According to the head of the WKO, “dangerous dreams” are discussions at the European level about the embargo on Russian natural gas. VBW Managing Director Brossardt has fallen into the same corner: Austria and Bavaria are now asking for “tenacity” at EU level to stand up to those EU countries less dependent on Russian gas.

The Bavarian CSU Minister of State Florian Herrmann sent a “request to the Austrian Federal Government” via a video link to fill the gas storage facilities in Salzburg Haidach as soon as possible. About 2/3 of the magazines there are practically empty, as Hatz and Brossardt emphasize in an interview with our editors: “From what is there, about 40 percent go further towards Tyrol and Vorarlberg – hence our request that Germany and Austria be united in the forthcoming codified regulation. Otherwise, we’ll both have a stupid winter.

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The gas storage facilities are owned by Gazprom

The head of the WKO handed over the ball to his own government: in March, shortly after the outbreak of the war, he urgently raised the matter in Vienna, says Mahrer, who also spared no criticism from the Austrian minister of green energy, Leonora Gewessler. Mahrer accused her, partly openly, partly between the lines, of inaction: “I wish she would talk to her colleague Habeck more often.” Background: The Haidach gas storage facility is the second largest in Western Europe – and also a key distribution point, especially for Russian gas. The four plants can hold a total of approximately 3.5 billion cubic meters. The “Austria Bavaria gas pipeline” runs from Haidach to Burghausen in Bavaria.

However, the Haidacher factory belongs to the Russian Gazprom and the German Astora GmbH, which in turn belongs to a subsidiary of Gazprom. The Austrian Rohöl-Aufsuchungs-Aktiengesellschaft (RAG) owns a third of the property – no wonder Bavaria is pushing for an agreement with the Austrians to secure gas supplies from Haidach to Bavaria.

Electricity should be cheaper

Despite all concerns about a gas boycott in the EU, the Austro-Bavarian Alliance agrees that the EU should then be asked about electricity price controls. Together they are in favor of the reform of the so-called merit order, i.e. the process of electricity price auction. Put simply, it works like this: if there is a demand for electricity, priority is given to the power plants that produce it the cheapest. Only after the demand is completely satisfied, the power plant whose electricity is the most expensive for consumers determines the price of electricity: As it stands today, these are gas-fired plants. The EU should change this now to make electricity prices cheaper.

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