After flattening the curve, Austria takes a gamble

“I’m relieved to be back,” said Alexander Roth, the owner of two jewelry stores on Mariahilfer Strasse, one of which is still closed. “But I don’t have high expectations for this week. Or the next,” he said, speaking through a surgical mask.

The coronavirus pandemic has crippled European economies, but as infection rates have decreased, Austria has begun to roll back its emergency restrictions. Since March 16, all nonessential shops have been closed—along with schools, workplaces, playgrounds, restaurants, and cafes. Now, stores smaller than 4,300 square feet, home-improvement stores of any size, and federal parks have been allowed to reopen; larger stores are set to follow in May. Other European countries, such as Denmark, have prioritized schools, but in this small Alpine nation, mounting political and economic pressure has led the government to focus on small-business owners first.

A 38-billion-euro ($41 billion) crisis fund and Chancellor Sebastian Kurz’s proclaimed “cost what it may” approach failed to keep unemployment from skyrocketing. More than half a million people out of Austria’s 9 million are now without work—a 66 percent increase in unemployment in a single month and the highest rate of unemployment since records began in 1946. Another 600,000 are on “short-time work,” a scheme in which workers—many of them employed by shuttered small businesses—continue to receive around 80 percent of their salary, nearly all of it paid by the government. Economists warn of an unprecedented tidal wave of bankruptcies to hit in the coming months as savings diminish, plus a subsequent corresponding unemployment spike.

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