A February 2019 report by the German think tank the Leibniz Institute highlights which countries and which industries will be most affected in 43 countries. The report also named Austria as particularly exposed in certain sectors.
“The study showed that 6,000 jobs in Austria could be in danger in case of a no-deal Brexit,” Dr Barbara Kolm, director at think tank the Austrian Economics Center, told The Local – citing a February 2019 report by the Leibniz Institute for Economic Research Halle (IWH) and the Martin Luther University Halle-Wittenberg, both in Germany.
“In Austria and Belgium, wholesale and retail trade show the strongest exposure,” states the Leibniz Institute report.
“Austria is a country which will be affected by Brexit more indirectly through trade with Germany and other countries closely connected to Britain than directly,” adds Kolm.
A report by the government in Styria, Austria's car hub, confirms Austria's exposure to Brexit through trade with its neighbours.
“An estimated €343 million in goods (exports from Styria) are also potentially threatened indirectly via the three main trading partners Germany, Italy and the USA. This corresponds in total to approx. 5.5% of total Styrian goods trade,” states a risk analysis by the Styrian regional government.
Austria is ultimately more insulated to a no-deal than many of its neighbouring countries, as Kolm points out. The Leibniz Institute report suggests more than 100,000 jobs could be at stake in Germany if the no-deal fears become reality in 35 days.
Kolm says Austrian banks could nevertheless suffer.
“Austrian banks could be affected by a possible partial move of London’s financial sector to Frankfurt or Paris,” says Kolm. “Tourism – and thus, airlines, are another sector which could take a hit,” she adds.
Easyjet announced last year that it was setting up an Austrian subsidiary to circumnavigate any Brexit aviation complications.
As of January 2019, Easyjet had already transferred 130 Airbus aircraft to its subsidiary in Austria. The licenses of the crews are also expected to be transferred to the Austrian subsidiary before March 29th, reports German-language daily daily Tagesschau.
Britain's Prime Minister Theresa May greets Austria's Chancellor Sebastian Kurz outside of 10 Downing Street in central London on November 22nd, 2018. Photo: Ben Stansall/AFP.
While a no-deal represents a challenge to Austria, the country 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.
One of the strongest trade relationships with the UK is in the car manufacturing sector, which in Austria is nestled around the city of Graz in the region of Styria.
The United Kingdom is Styria's 4th largest export partner. Just over 4 per cent of all exports from the region are destined for the UK, according to a report by the Styria regional government.
“While there is fear that there could be a downturn after Brexit, Styria still sees Britain as a main trading partner in the long-term,” Kolm told The Local. “Styria, the state of which Graz is the capital city, has a multitude of trade connections with the UK. In total, exports to Britain just from Styria totaled €875 million in 2018.”
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Nevertheless, the Styrian government says that potential tariffs and higher export costs will “have an immediate impact on the Styrian economy.” An additional €239 million in Styrian service exports are also highlighted as vulnerable in the regional government's report on Brexit's impact on local trade. A no-deal exit would only compound fears and add to uncertainty for businesses.
Austrian Chancellor Sebastian Kurz recently insisted avoiding a hard Brexit is still a viable priority.
“The main target is to avoid a hard Brexit. If we need more time to reach that, then we should consider that option,” Kurz said, according to Reuters.
Regardless of the outcome of Brexit, the 10,000 or so Brits living in Austria will have been relieved to hear that Austria has passed legislation to protect their rights in the event of a no-deal. More details here.