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Investments for a strong comeback of Vienna’s economy

Municipal package to strengthen Vienna’s districts and neighbourhoods – Vienna Economic Chamber wants investment in broadband, bridges and regional schools

The Federal Government’s €1 billion municipal package aims to trigger important investments in the state’s regions, Finance Minister Gernot Blümel and WKW (Vienna Economic Chamber) President Walter Ruck announced in a joint press conference. “The municipal investment package is designed to stimulate the local economy and create added value, as well as jobs in the regions. It is important that we invest our way out of this crisis”, said Finance Minister Blümel.

Vienna is to receive around €238 million, just under a quarter of the funds of the billion-euro package. This means that not only broadband networks, but also energy-saving measures, renewable energy installations, schools, kindergartens, sports facilities and other renovation projects are all eligible for funding. “This money is a great opportunity, especially for Vienna and its surrounds”, Gernot Blümel added. Both at the regional level and in terms of economic interests there were many good ideas about how the €238 million could promote Vienna’s further development.

Strong impact

“The funds from the municipal package will have a strong economic impact in Vienna. The city’s added value will increase by more than €207 million and around 2,000 new jobs will be created,” Ruck said. “An effective infrastructure is the basis for economic success - and therefore also for jobs and prosperity. We are committed to implementing the necessary measures right away to ensure that Vienna remains a competitive economic location”, Ruck added. Investment in transport infrastructure and broadband are particularly important now. According to Ruck, “broadband internet should be a given today, it’s part of the basic infrastructure, like water, sewage and electricity. Without a fast internet connection, there’s no digitisation, and without digitisation, no economic future!”

Vienna’s outlying areas – the location of many businesses – are lagging behind when it comes to a fast internet connection. And even in the city centre, problems occur time and again. A survey conducted by the Vienna Economic Chamber, in which 1,000 businesses of all sizes, sectors and districts took part, shows that 40% are barely or not at all satisfied with their connection speeds. Likewise, in industrial areas the supply is suboptimal. A study by the Vienna Economic Chamber shows that upload speeds are less than 5 Mbit/s there. For downloads, bandwidths fluctuate strongly between 10 and 280 Mbit/s.

“What's needed now is the swift expansion of broadband via fibre optics as well as mobile data exchange”, Ruck concluded. About €95 million of investment is required for this – comprising 720 systems for the first stage of 5G network and upgrades for under-served businesses and households.

Bridge refurbishment generates €132 million

Investment in transport infrastructure pays off. The Lobau tunnel is a prime example – and so is bridge infrastructure. Vienna’s bridge infrastructure is beginning to show its age. Many of the bridges built soon after 1945 are in need of renovation. Investment of around €200 million to refurbish fifty bridges will increase the added-value effect by €132 million and create over 1,250 new jobs. According to Ruck, “a thriving construction industry contributes significantly to added value at the sites, which has a positive effect on many other industries. When the construction industry is doing well, the economy picks up, and the location and people benefit.”

Ruck also revealed other exciting projects for Vienna. These include the construction of a €100 million new technical college building in the Seestadt Aspern and the refurbishment of existing technical colleges. Renewing Vienna Business Agency’s expired funding for promoting home offices would also provide further impulses for the location. The original €10 million fund was exhausted within a short time and the demand from the business community continues to be high.

Vienna profits from the rescue of AUA

Finance Minister Blümel emphasised that Austria as a business location, and more especially, the federal capital and entire eastern region would benefit significantly and sustainably from AUA’s rescue. The solution presented on Monday will secure both the future of AUA and of Vienna as a hub for long-range connections. “AUA’s future is essential for Vienna. Without AUA, there would be no cosmopolitan Vienna”, the Finance Minister explained. It would also be much more difficult to get tourism, gastronomy, and the congress and hotel sectors back on track in the federal capital. The Austria package is therefore especially also Vienna’s package. AUA’s economic importance to Vienna amounts to €2.7 billion per annum. This triggers an employment effect of 17,600 jobs throughout Austria, which means at least 5,500 jobs for Vienna. “With this package, the recovery of the Viennese economy is therefore a major aim”, said Blümel.

“Without a strong national carrier, it would no longer be possible to maintain Vienna’s international hub function. The result would be a painful exodus of important companies, job losses and a severe setback in terms of international competition between locations”, Ruck pointed out.

Federal Government support measures

The Finance Minister also presented updated figures on how Vienna will benefit from the government’s current support measures. In the Austrian capital, for instance, short-time work totalling €2 billion has been applied for, securing 300,000 jobs. €225 million have already been paid out. In addition, around 71,000 entrepreneurs in Vienna have applied for tax deferrals, which means that € 2.1 billion more liquidity remains in Viennese businesses. Over 800 Viennese businesses benefited from the fixed costs subsidy in the first three weeks and have received a total of € 4.7 million in transfers so far. 50% of the applications for the fixed costs subsidy have already been processed.