Vienna rebuilds reputation after rise of the far right

The capital is trying to raise its game after electoral and economic upheaval and the migration crisis
New beginning: the iSphere, part of a media art festival at the Aspern development last autumn

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A 25-minute ride on a sleek, modern U-bahn train from the centre of Vienna, a new suburb is under construction. The Aspern lakeside project combines industrial and office units with modern flats alongside an artificial lake.

The development offers an alternative, future-focused, laid-back view of a city best known for its grand historical buildings, its neoclassical cultural offering and as an international crossroads where east Europe meets west.

The marketing talk is refreshingly understated. “It is not actually a lake. It is more of a pond, but you can swim in it,” says Gerhard Hirczi, chief executive of the Vienna Business Agency. “The advantage of a pond is that there are no sharks.”

Aspern is part of efforts to improve Vienna as a place to do business. It is planned to accommodate 20,000 people and provide a similar number of jobs by 2028.

Vienna’s image as a safe, reliable place for business has taken a knock recently. Europe’s migrant crisis jolted the country’s national politics, while weak economic growth and rising unemployment have increased dissatisfaction with the ruling “grand coalition” of the Social Democrats and the People’s party.

The populist rightwing Freedom party came close to winning May’s election for the country’s presidency after campaigning on a nationalistic programme which demanded tougher controls on immigration and of Austria’s borders. The party played on fears created by the thousands of refugees fleeing wars in countries such as Syria who have passed through Vienna’s railway stations, many on their way to other countries including Germany or Sweden.

As the country’s capital, Vienna — although still a Social Democratic party stronghold — was in the international spotlight for the wrong reasons.

In the end, Austrian voters (and particularly Vienna’s) narrowly elected the Green party’s Alexander Van der Bellen as president. But the campaign resulted in the resignation of Austrian chancellor Werner Faymann, whose Social Democratic party’s support plummet and its candidate was pushed out of the presidential race.

In city elections last October, Michael Häupl, Vienna’s veteran Social Democratic mayor, had seen off a challenge from the Freedom party — although it achieved its best-ever result in the capital.

The centre-left Social Democrats and centre-right People’s party have limited time to rebuild support before national elections, due by September 2018.

“It was no surprise that some voters tended towards parties with easy answers,” says Harald Mahrer, state secretary in the Austrian ministry for science, research and the economy, of the presidential election result. “But I do think this has had a much-needed catalytic affect — a wake-up call for some of the top decision makers.”

Vienna prides itself on having significant advantages compared with other big cities, particularly for its high standard of living.

As well as a broad cultural offering, the capital has good quality public transport — as anyone travelling to Aspern lakeside can attest — and low living costs, often including free kindergarten care.

The city ranks number two in the world, after Melbourne, Australia, in the Economist Intelligence Unit’s global “Liveability” ranking.

Unlike neighbouring Switzerland, Austria is not home to many large, global companies. Instead, its affluence is built on small and medium-sized companies, often world leaders in specialist industrial sectors.

Vienna is an international city, hosting parts of the United Nations, as well as the Organisation for Security and Co-operation in Europe and Opec, the oil producers’ cartel.

Austria and Vienna’s history as gateways to central and eastern Europe continues in their business roles today. Austria’s proximity to countries such as Hungary and the Czech Republic makes the capital well positioned for international business and banking.

In the early years after the collapse of communism, Vienna was a launch pad for US and western European companies looking to expand into eastern markets. But Mr Hirczi says: “In the past four or five years, we have noticed a flow in the opposite direction.”

Renate Brauner, Vienna’s vice-mayor with responsibility for finance, says: “Sometimes the shadow of this wonderful concentration of music, culture and art is so big that people don’t see that Vienna is also a lively, innovative, international business hub.”

Renate Brauner says Vienna’s business strengths are overlooked because of its rich cultural offering

Others are more critical. Vienna’s relaxed style can also be a disadvantage, says Michael Ströck, a local entrepreneur who advises start-ups. “People are laid-back and easy to talk to. The flipside is that they are not early adopters.”

Franz Schellhorn, director of the Agenda Austria think-tank, says: “Vienna always gives the impression of just tolerating business. It is quite an arrogant point of view. It is like it’s a blessing to be in the city and to pay taxes here.”

Such criticisms are not lost on Austria’s new Social Democratic chancellor, Christian Kern, who previously headed the ÖBB Austrian rail network. A few days after his appointment in May he appeared at Vienna’s Pioneers Festival for entrepreneurs and new technologies and called for a revival of Austria’s innovation culture and assistance for start-ups.

That has raised hopes the government could, for instance, boost tax incentives for private investors. “This is something we have not heard from a Social Democratic chancellor for the past eight years,” says state secretary Mahrer.

The government has introduced measures to reduce the time it takes to set up a company. It is also trying to help Austrian start-ups expand into fast-growing Asian markets and to encourage international start-ups to use Vienna as a base from which to approach central and eastern Europe.

Vienna will never be a low-tax paradise. Higher government revenues are needed to fund public investment in services, argue local politicians. “It is also important for companies that the city works, that the infrastructure is perfect, that we can support them with a well-educated workforce, that we can support, especially, women,” says Ms Brauner.

Many Viennese are determined to restore the city’s reputation for openness in the wake of the elections. Later this month, a job fair for refugees is expected to attract as many as 75 potential employers and 2,500 attendees.

Mr Ströck, who is one of the organisers, says: “It was unexpectedly straightforward to get this event off the ground — the companies had no problem coming. People here are more open to foreigners than the newspapers would make it seem.”

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