I. Economic implications
The crisis has led to an increase of the unemployment rate by more the 50% within short time. It is expected that the GDP will be reduced by at least 5%. The Austrian government has prepared a program for an amount of 38 billion Euro consisting of state aid, guarantees, facilitating of bank loans, tax reliefs and the like. Contrary to the expectations at the beginning of this year, the Austrian budget will not be balanced but the government took the decision for deficit spending. Also other public institutions provide financial support and funds to avoid an increase in insolvencies of enterprises.
II. Overview on main restrictions currently in place
1. All restaurants, bars, cafes, theaters, concert halls, opera houses, cinemas, museums and the like are closed. The same applies to schools, colleges, universities and Kindergarten. Religious services take only place without participants. Sport events have been postponed. Hotels may not be used for tourism but only for professional travels.
2. All shops are closed, except for food and beverages stores (supermarkets and groceries), drug stores, pet food stores, pharmacies, post offices, bank branches, petrol stations, tobacco shops, shops for agricultural products, service stations for cars and a few more. Supermarkets and drug stores with a size of more than 400 square meters may only be entered into if the customer wears a mask over mouth and nose.
3. Public transport, taxi drivers and supplier services are still available. However, airports have been shut down and borders are partly closed.
4. People shall not leave their flats or houses, except for (i) shopping in those shops which are not closed; (ii) assisting other people who need help; (iii) conducting professional work which cannot be done at home; (iv) walking or jogging or cycling but only alone or together with people from the same household and not in groups (part of public parks but not all of them is closed).
5. People shall work in home office (teleworking) as far as possible. However, they may go to the office to the extent this is unavoidable. This applies to employers and/or business people as well as to employees. Controls by police are possible and fines may be levied. Thus employees should have a certificate from their employer stating that their presence in a shop or office is necessary. Of course employers have a duty to organize the workplaces so that the risk of becoming sick is minimized.
6. In general people shall keep a distance of at least one meter from each other. This applies also for the construction industry; however, part of the sites have been closed.
7. There are – quite attractive – models for short-time-work in place, combined with public subsidies. Such model may be implemented by an agreement with the works council. This shall help avoiding, at least to a certain extent, further notices of termination.
8. Courts and administration are also shut down to a large extent. Court hearings are only taking place in urgent cases and may be held by a video conference (the latter applies also to shareholder assemblies, board meetings and the like). Periods of time under the law or given by a court or administrative body are extended and commence only with effect of 1 May 2020.
9. The deadline for debtors to apply for insolvency proceedings has been extended from 60 days to 120 days. At present there is no obligation to open an insolvency proceeding because of over indebtedness.
10. The Austrian Parliament has passed five legal acts containing special legal provisions e.g. for civil law and corporate law. For example borrowers or tenants may stop their payments for up to three months under certain preconditions. Shareholders assemblies may be held until year end 2020. It is also intended to permit virtual shareholder meetings.
Please note that most of these provisions contain a “sunset clause”, i.e. they will get out of force automatically by year end 2020.
III. Exit strategy
The Austrian government has announced that it is intended, subject to further success in fighting the pandemic, to withdraw the shutdown of economy and public life step by step as follows:
1. Beginning on 14th April 2020 small shops (size up to 400 square meters), flower and garden markets and markets for building tools may open similar to supermarkets etc. The minimum distance between people has to be kept and only a limited number of customers may enter the shop at the same time. Furthermore, also in these shops masks for mouth and nose have to be worn.
2. Also in buses, trains and the underground masks shall be worn.
3. The limitations for leaving flats or houses will be extended until 30th April 2020.
4. Beginning with 1st May 2020 any shops, including shopping malls, and hairdressers may open.
5. Other service providers as well as restaurants and hotels will possibly open, step by step, by mid May. However, this will only be decided until end of April.
6. It is expected that until 30th June 2020 no events or public meetings may take place. This includes cultural events, such as concerts or theater and cinema performances, as well as sport competitions. For the time being also museums will remain to be closed.
7. As regards schools, it is intended to open them again in mid May. Until then home schooling is continued. Graduates shall take place but with certain modifications. At universities studies will be continued digitally for the summer term.
Please note that this is only a rough overview on the current situation in Austria, including a forecast. Depending on further developments changes are possible. Please feel free to contact our firm at office@foglar-deinhardstein.com in case you have a request for more detailed information.
Law firm
Foglar-Deinhardstein
