Styrian dream or stygian nightmare? Austria’s Brexit car roulette

In manufacturing, tourism and the car industry, Brexit’s spectre looms over several key Austrian regions and sectors, Alex Macbeth writes.

Styrian dream or stygian nightmare? Austria’s Brexit car roulette
Brexit could also hurt Austria's tourism industry, some fear. Photo: Austrian Tourist Board

Styria, Austria’s automobile manufacturing hub, could benefit from Japanese British-based car makers relocating to the southeast Austrian region. But the area around Graz could also face its own Stygian nightmare if car supply chains are destroyed in a no-deal scenario.

“The region of Styria has an important position for the economic relationship with the British. Jaguar Land Rover started building cars there in 2017, which has been a tremendous boost to the Austrian economy,” Barbara Kolm, director of the Austrian Economics Institute, told The Local.

“Austria will probably be hit less by Brexit than many other EU member states – the German ifo Institute expects a relatively modest decline of GDP of 0.1 percent because of Brexit,” added Kolm.

Nearly 50 per cent of all Austrian exports to the UK are in manufacturing. And it is Austria’s car industry that is perhaps most exposed to the roulette effects of Britain’s departure from the European Union.

“The only sector that might profit from Brexit is the car industry, especially in Styria,” Barbara Kolm told The Local. “Jaguar Land Rover could outsource even more of its production to Austria after Brexit, and the industry hopes to be able to lure Toyota to Austria as well. Fiat Chrysler has already announced that it will move its production of tractors to Styria.”

But Brexit could also turn out to be a two-edged sword for Austrian car makers. “All of this could just as easily go wrong as well, for example if Jaguar Land Rover instead were to decide to move completely back to Britain in the long run,” added Kolm. 

Austria has a trade surplus with the UK and more than 100 Austrian companies are nevertheless active in the UK market – “among them Novomatic, Wienerberger, and Zumtobel,” adds Kolm.

Alpine states such as Salzburg, where tourism is a key industry, could feel a heavier Brexit burden. Nearly one million Brits, mainly winter ski tourists, visit Austria each year.

“Especially during the winter months in the Alpine regions, tourism is of substantial scale and must not be neglected,” Kolm told The Local. British visitors constitute the 4th largest visiting national group in terms of overnight stays.

Seasonal Businesses in Travel (SBIT) is a lobby group of more than 100 British tourist operators, created in response to Brexit, that aims to “increase awareness of the potential impact of Brexit on the UK outgoing travel industry,” through lobbying of “UK and European governments.” 

When it comes to financial services however, experts agree that Austria is unlikely to win or lose much in the battle to lure financial services firms from the UK.

Most major Austrian banks, such as Raiffeisenbank, are fairly insulated against Brexit because they are focused on Central and Eastern Europe, Richard Grieveson, an analyst with The Vienna Institute for International Economic Studies (WIIW), told The Local. Only the few intimately intertwined with the City of London could suffer. 

Vienna has also emerged as a potential new low-cost aviation hub in light of Brexit. EasyJet announced that it will operate its new airline easyJet Europe out of Vienna. All of the budget carrier’s EU27 aircraft will be re-registered at the new hub by March 2019, according to easyJet. 

Ryanair is also looking to Austria as a post-Brexit stepping stone to the European market, having taken a stake in LaudaMotion, the low-cost airline founded by Austrian former Formula 1 world champion and airline pioneer Niki Laudareports The Local Austria. 

Beyond the challenges in each sector, Austria’s current coalition government could also be an unpredictable force in the Brexit negotiations.

“With the centre-right and far-right in coalition, you see the implications on policy and it makes them unpredictable on Brexit,” Richard Grieveson, WIIW’s analyst, told The Local.

On July 1, Austria – traditionally a mainstream, moderate, member state – will take over the revolving six-month EU presidency. 

Austria is most likely to use its term at the presidency to exert pressure on its neighbours rather than to get any special Brexit concessions, says Grieveson. While Germany is calling for all member states to make a larger contribution to the post-Brexit EU budget and fill the deficit left by the UK’s departure, Austria is reluctant to do so.

Another contentious issue on the horizon for the EU and for neighbours Austria and Italy is the future of South Tyrol.

With a high possibility that Italy’s far-right The League could enter government across the border in Italy, tensions over the much-disputed Italian region of South Tyrol (known as ‘Alto Adige’ in Italian) could ignite again between the two EU neighbours.

In December 2017, the current right-wing Austrian coalition government sparked outrage in Italy when it offered Austrian citizenship to German speakers in the bilingual region, the majority of which are German speakers, reports The Local Italy.

A pro-Austrian group in the Italian region, the Südtiroler Heimatbund, responded by placing ads on billboards in Vienna that read: “South Tyrol thanks Austria.”

The League’s controversial leader Matteo Salvini has promised “not to touch the autonomy” of the region, reports Italian news agency ANSA. 

With regards to Brexit, the rights of Austrian citizens in the UK and Brits in Austria remain a quagmire issue. More than 10,000 Brits live in Austria, according to the Austrian national statistics agency Statistik. Approximately 25,000 Austrians live in the UK.

by Alex Macbeth

This article originally appeared in Europe & You, The Local's weekly newsletter about how Brexit is affecting mainland Europe and the Brits living there. Sign up here, free.
For members


Is new court ruling the end for Britons fighting to remain EU citizens?

The Court of Justice of the European Union confirmed on Thursday that Brexit really does mean that Britons are no longer EU citizens. Claudia Delpero looks at whether there's any other way they can keep their rights.

Is new court ruling the end for Britons fighting to remain EU citizens?

The Court of Justice of the European Union confirmed on Thursday that Britons lost EU citizenship when the UK left the EU, on 1st February 2020. 

It is the first time the EU’s top court has rules on the matter, after a number of legal cases challenged this specific Brexit outcome. The decision also sets a precedent should other countries decide to leave the bloc in the future. 

What has the EU Court decided?

The Court of Justice decided on a case brought by a British woman living in France.

Before Brexit, she could vote and stand as a candidate in her town of residence, Thoux. But after the UK withdrawal from the EU, she was removed from the electoral roll and excluded from the municipal elections that took place in March 2020, during the transition period.  

As the mayor refused her appeal to restore the registration, she took the case to the regional court in Auch, which agreed to request an interpretation of the rules to the EU top court. 

Julien Fouchet, the barrister supporting her and several other cases on the EU citizenship of British nationals, argued that the loss of EU citizenship and voting rights was disproportionate. It would also be contrary to the EU Charter of Fundamental Rights, given that the woman also lost her voting rights in the UK, having lived abroad for more than 15 years.

Alice Bouillez, who has lived in France since 1984 and is married to a French national, could have applied for French citizenship, but did not do so because she said “this was not necessary” before Brexit and, as a former UK official, she had taken an oath of allegiance to the Queen.

On Thursday the Court of Justice announced the decision about her case. The court ruled that the “possession of the nationality of a member state is an essential condition for a person to be able to acquire and retain the status of citizen of the Union and to benefit fully from the rights attaching to that status.”

The court therefore confirmed that British nationals automatically lost their EU citizenship as a result of Brexit and, as a consequence, Britons also lost their voting and electoral rights in municipal elections in the EU (unless the country where they live set different rules). 

What is EU citizenship?

EU citizenship was introduced by the Treaty of Maastricht of 1992, when borders were opening and the bloc was integrating economically after the end of the Cold War. 

Under the treaty, every person holding the nationality of an EU member state is a citizen of the Union. EU citizenship is additional and does not replace nationality, the treaty specifies. But this creates the first form of a transnational citizenship that grants rights across borders.

EU citizens have the right to access each other’s territory, job market and services under the principle of non-discrimination. If they are economically active, they have the right to reside in other EU states and be joined by family members, access healthcare at the same conditions of nationals (for emergency treatment also when travelling temporarily), obtain social security benefits and see their professional qualifications recognised.

Beyond free movement, at the core of EU citizenship there are also political rights, such as participating in the European Parliament election, voting and standing as candidates in municipal elections when living in other EU countries, receiving consular protection from other EU states outside the EU, and taking part in European Citizens’ Initiatives asking to the EU to legislate on certain matters. 

Which EU citizenship rights have Britons lost with Brexit? 

For British citizens who were living in the EU before Brexit, the Withdrawal Agreement protects some of these rights. Britons covered by deal have their residence, access to work and education, healthcare, social security and qualifications secured, but only in the country where they were living before Brexit.

But the right to free movement in other EU states, consular protection in third countries, and the political rights attached to EU citizenship were lost, the Court confirmed. 

For British citizens in the UK, the trade and cooperation agreement has preserved some social security rights and, in theory, the possibility to have professional qualifications recognized when moving to an EU country. These provisions however lack details and may take a long time before they work in practice. 

As the “European Union” no longer features on British passports, the possibility to access EU lanes at airports to skip passport control queues has also vanished. 

“The loss of those treasured rights has been clear to those of us living in the EU from the early days of Brexit. But for Brits in the UK, the realities of life outside the EU, and the consequences of Brexit, are only just dawning. Long queues at the borders, roaming charges, obstacles to working abroad, etc. are the new reality,” said Sue Wilson, Chair of the group Remain in Spain. 

While she said the court’s decision was “no real surprise,” she argued that “this is not the Brexit the public were promised, or that the majority voted for.”

Can British citizens get some of these rights back?

Julien Fouchet was disappointed at the Court decision and promised to continue the legal fight, bringing the case at the European Court of Human Rights (which is not an EU institution). 

Other two cases on the matter of EU citizenship for British nationals are still pending at the Court of Justice of the EU. One of them aims to determine whether EU citizenship is a “fundamental status” that cannot be removed but Thursday’s decision could have already provided the answer.

Another option to reconsider some of the rights is the renegotiation of EU-UK trade agreement, when it will be reviewed in 2025. 

Meanwhile, the EU is revising the rules for non-EU citizens living in EU countries on a long-term basis, making it easier to move across borders. 

Applying for citizenship is so far the only option to regain voting rights, although not all EU countries allow dual nationality. 

Sue Wilson, who has long campaigned for the UK to stay in the EU, said: “There is only one way to restore the loss of our rights, and that’s to rejoin the single market, rejoin the customs union, and eventually, rejoin the European Union… Until that day, we will continue to be second class citizens whose rights have been diminished for the sake of an ideology.”