2 The Pandemic in Austria

Austria was hit with it’s first case of the COVID-19 virus on February 25th of 2020, date in which a Chinese flight attendant was diagnosed positive in an Austrian Hospital. Even though the virus arrived early to the country, the nation has managed it carefully and for this reason it has shown one of the best results of Western Europe to date.

2.1 Measuremenents Taken

  • February 23:
    • Train traffic with Italy was closed
  • March 10:
    • Hotels, bars and restaurants were closed.
  • March 13:
    • Austria requested its citizens to return to the country to avoid infection.
    • Border restrictions begin. The entry of Italians into the country was prohibited.
  • March 15:
    • Measure were hardened. Severe restrictions on movement in public spaces.
    • People are only allowed to go out for short walks.
    • Meetings of more that 5 people are prohibited.
    • Further restriction of entries from abroad.
    • Closing of restaurants, schools and kindergartens.
    • Closure of non-essential stores (supermarkets and pharmacies).
    • Special powers are granted to the police.
    • Measurements are taken to boost the economy.
      • Possibility for companies to transfer the tax burden from 2020 to subsequent years, the same as VAT.
      • Austria (along with Denmark, the Netherlands and Sweden) is one of the countries that most advocates austerity before the EU.
      • Approved a tax aid package in the following terms: 19,000 million euros in direct aid, 10,000 million euros in tax holidays and 9,000 million euros in credit guarantees.
  • March 30:
    • Citizens were obliged to wear a mask when going out.
  • April 6: Progressive lifting of measurements. Austria is the first EU country to gradually reverse restrictions.
    • Shops of less than 400 square meters may open from April 14, with restrictions on the number of customers (1 customer for every 20 square meters, all with a mask). If positive results are obtained, the rest of the shops may open from May 1, but restaurants, hotels and other services only in mid-May.
    • Schools will continue closed until mid-May.
    • Museums, cinemas, theaters and concert halls will not open until July.

2.2 Health Results

From the figure of cumulative confirmed cases we see that Austria’s measurements were very efficient in reducing the spreading of the virus and led to the start of the process of the flattening of the infection curve.

We can see the process of the flattening of the curve more clearly in the following graph. After march 26th, were the daily infected reached the maximum at 1321, cases started to drop. As of April 20th there are only about 76 people being infected daily, and the number is getting smaller and smaller.

Currently, Austria has an infection rate of 164 per 100.000, 14.795 total cases and 470 deaths. When compared to statistics from other Western European countries, Austria has definitively been one of the best standing. In April 14th Austria allowed small business to open, the world has yet to see what the consequences of these measurements will be.

2.3 Economics of the Crisis

The pandemic will most definitively have an impact on the Austrian Economy, both in the short and long run. It is necessary to make this distinction as the mechanisms that affect each time period are different. We will predict effects in the short run through a Neoclassical approach, and in the long run through the Institutions Hypothesis.

2.3.1 Short Run Effects

In the short run, we expect prices in the goods and services markets to rise; as goods become more scarce (because labor is reduced form quarantines around the world) and demand for basic goods remains equal, the prices will tend to rise. Austria’s GDP will also decrease as even the increase of public spending will not be able to balance out the reduction in consumption and investment. In terms of wages, we should expect real wages to drop since the demand for labor has come down and the supply remains the same.

2.3.2 Long Run Effects

Since this crisis is a transitional phenomenon we do not expect it to have a broad impact on the way we live or behave, so we predict no major government institutional changes. However we do see a potential for institutional change at the firm level. Since the generalized quarantine, companies have been forced to adapt to a new style of working from home. This new knowledge will make companies more flexible and if companies start to implement it after the crisis, it will lead to more deployment opportunities.


  1. Deutsche Welle. (2020). Austria aísla a sus ciudadanos ante la pandemia de coronavirus. Retrieved from https://www.dw.com/es/austria-a%C3%ADsla-a-sus-ciudadanos-ante-la-pandemia-de-coronavirus/a-52779687 on April 20, 2020.

  2. Deutsche Welle. (2020). Austria volverá a abrir los pequeños comercios la próxima semana. Retrieved from https://www.dw.com/es/austria-volver%C3%A1-a-abrir-los-peque%C3%B1os-comercios-la-pr%C3%B3xima-semana/a-53027802 on April 20, 2020.