2022 was demanding. After the effects of the Covid-19 pandemic were reasonably under control, both in terms of health policy and finances, and an optimistic outlook for 2022 seemed justified, the unthinkable happened. The Russian war of aggression on Ukraine changed everything from one day to the next. Described by German Chancellor Olaf Scholz as a Zeitenwende (paradigm shift), we have since found ourselves in a different Europe with
new challenges and an unclear future. Most noticeable for all in the EU is the rise in energy costs, the collapse of established supply chains and the resulting very high inflation.
After decades of liberalisation trends in the public sector, there is now a shift towards the return of the state. This shift already began with the Covid-19 pandemic, the many different regulatory measures, and comprehensive economic and labour market subsidies. With the war in Ukraine, however, the return to the state has reached an even more far-reaching dimension.
As a result, the outsourcing of production and industry no longer works and regional European supply chains – probably at the cost of higher prices and limited European competition rules – are gaining in importance. Energy supply is once again seen as a public good and a state service of general interest organised with the participation of the ministry.
International economists call for a war economy, meaning state requirements and regulations for the production of selected goods. At the same time, the many different state measures to cushion inflation are reaching levels that are straining public budgets to an unprecedented extent. European integration and the Western model of democracy based on the rule of law and governance are also under pressure.
KDZ was affected in many ways by the ‘paradigm shift’. Our annual report refers to the numerous projects and studies on public finances and performance in Austria and Europe. But we were also increasingly concerned with the resilience and sustainability of the public sector.
For us, it was a matter of maintaining a balance under the new conditions. On the one hand, adequately incorporating the government’s new requirements related to resilience, financing, and personnel into our work. On the other hand, exercising the necessary care to avoid overstretching the public sector system and placing an unfair burden on future generations. This has been demanding and is likely to remain so in 2023.
