Renate Brauner: Keynesian in the Rathaus

With a firm hand on the city's purse strings, Vienna's Deputy Mayor for finance has been ­'investing out of the crisis'

Brauner with Gerhard Hirczi at an Expat Center event at Semper Depot | Photo: Expat Center

Brauner with Gerhard Hirczi at an Expat Center event at Semper Depot | Photo: Expat Center

In late February, the West and South sides of the Rathaus were still wrapped in gauze to contain the dust from sandblasting the final layers of soot built up over the decades and the repairing of weather damage to the 1883 city hall’s magnificent Gothic stonework. This is phase one of a major, 11 stage restoration to Vienna’s “Cathedral of Democracy”, that began last September and will continue through 2023 and cost some €35 million.

The timing of the Rathaus Restoration is not a coincidence. It is one of a long list of infrastructure and investment projects undertaken by the City of Vienna in the wake of the 2008 financial crisis, to maintain public buildings, improve transportation and services, but also to finance new research and universal free kindergarten, and generally put money in people’s pockets. So while the crisis has resulted in unemployment rates in the European Union above 10% – 10.7% in the EU27 and 11.8% in the eurozone, in Austria, that figure was down slightly at the end of January, to 9.1% national method (4.3%, EU method), according to the Austrian Employment Service AMS (Arbeitsmarktservice), the lowest in the EU. In Vienna, the national figure is 11.2%.

“We’re investing our way out of the crisis, instead of saving our way into the next one,” said Deputy Mayor Renate Brauner in a recent interview in her bright, 4th floor office overlooking Friedrich-Schmidt-Platz. It is a clear choice for an “anti-cyclical”, Keynesian approach to city spending, rather than the “austerity politics” that has characterised recent European leadership, principally that of German Chancellor Angela Merkel.

“We’re doing the opposite,” Brauner confirmed. “As it is, neither the Greeks nor the Spaniards have a hope of coming out of the crisis if their economies keep shrinking and there are more and more unemployed – who are also not paying any taxes.”

Brauner with Gerhard Hirczi at an Expat Center event at Semper Depot | Photo: Expat Center

Brauner with Gerhard Hirczi at an Expat Center event at Semper Depot | Photo: Expat Center

 

To Brauner, economics is fundamentally about people’s lives, a view she shares with Vienna Mayor Michael Häupl and which has helped make her among the most trusted members of his administration. After studies in both sociology and political economy, she took her first cabinet-level position in 1996 as City Counsillor for Integration, Women’s Issues and Consumer Protection. At the same time, she served as president of the Wiener Integrationsfonds that directs funds to language and skills training for immigrants, and supports a range of anti-racism and intercultural cooperation initiatives.

From there, she became City Counsillor for Health Care and Social Services, before becoming, in 2007, Deputy Mayor for Finance, Economic Policy and Public Utilities, a position that also includes her roles as presidents of the Tourism Association, the Business Development Fund, the Immigration Fund and the 1st Vice President of the Employee Development Fund, sponsoring job training and further education for both workers and job seekers.

In Vienna, a city that has voted in a socialist government in every free election since the First Republic was established in 1920, investing in jobs and infrastructure is hardly radical. Still, in the current climate of austerity, this kind of thinking has become far from mainstream, and Brauner has her critics. A significant increase of €368.85 million in the city’s debt burden to an estimated total debt in 2013 of €4.34 billion drew sharp words from the opposition in November’s budget debates.

Freedom Party (FPÖ) leader Johann Gudenus called the budget “dubious”, according to the Austrian daily Der Standard, and Manfred Juraczka, party leader of the centre right Austrian People’s Party (ÖVP) dismissed it out of hand: In spite of a “warm rain of money”, the proposed budget was, he said, a “spectacular failure”. To which Brauner mounted a spirited defence, harking back to the words of Austria’s great post war chancellor Bruno Kreisky, that the city’s debt gives her “far fewer sleepless nights than when I have to worry about 50% youth unemployment.”

In retrospect, Brauner sees the criticism as predictable. People’s memories are short, she says, and many seem to have forgotten the “massive debt reduction, …in the hundreds of millions” the city undertook in the “economically good years” preceding the crisis. This put the city in a solid position to put together a powerful, counter-cyclical stimulus package directly into the crisis economy.

“Of course you can’t allow yourself to continually keep spending more than you are bringing in, either in private households or in public finances,” she said. “But when you look at Vienna’s debt as a percentage of regional GDP, it comes out to only 6%” – a level for Vienna she described as “absolutely manageable” – only a tenth of “the famous Maastricht debt ceiling of 60%” set for EU member states.

Renate Brauner’s agenda is complex: While overseeing the city budget, she wants to shake Vienna out of its lethargy into a more dynamic era, to push a society of entrenched relationships into accepting the presence and the energy of the international community that is pressing at the gates – here but not here – as it builds connections from its parallel world into the local culture.

Through one of her pet projects, the Expat Center on Schmerlingplatz, Brauner is helping make internationals welcome in the capital of Central Europe. It is these – the diplomats and professionals, immigrants and refugees – that she sees as an important engine of Vienna’s future. And women. Have no illusions, she says. There is still a long way to go.

“What the conservative politicians forget with all the cutbacks is that the people who never get any education, never get any professional training, will fail later,” she said, “and not only as people in the human tragedy of unemployment, but also in economic terms. They don’t contribute anything, so as a simple revenue calculation, this is not an intelligent policy.

“In contrast to what some people claim,” she said laughing, “we do know what we’re doing!”

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