The 2020 epic fall in the Austrian economy might be not the end of the story

In economic terms, Austria is a relatively successful European country with a real GDP per capita level of $52,746 (constant 2015 US dollars) in 2019. In 2020, the COVID-19 pandemic heavily affected almost all economies, and Austria was not excluded. Figure 1 shows the trajectory of real GDP growth since 1970 as reported in the OECD database. In 2020, the fall of $3705 (see Figure 2) is much larger than in 2009 ($2003). We are going to compare this fall with that in other developed countries in future posts and discuss the relative success of various economies. Austria is not the worst between them, but this fall is the largest in Austria since 1970.  It is worth noting that the Austrian economy had significant difficulties not only in 2009 but also between 2012 and 2015. 

The absolute fall of $3705 in 2020 is a good measure of economic disaster since every Austrian citizen lost personal income proportional to $3705 and this loss affected public behavior as expressed by crowded demonstrations against the government measures related to COVID-19. The relative fall of 7.55% (see Figure 3) is a better measure when we compare different countries. The overall fall varies between economic segments and the service-related business suffered the most. Austria has a significant portion of GDP associated with tourism and this part of the economy does not look sustainable in the mid-term perspective. The start of 2021 revealed that Austria suffers not only individual problems but also the difficulties related to the crash in the EU cooperation in the civil domain (border closer, fight between EU members for medicine and vaccines, fight between government and society). The start of 2021 does not look promising with a dramatic increase in new COVID-19 (UK version) cases and lockdown in April. The vaccination rate is still slow and, with a half-year protection half-life, that makes the repeated cases possible. 

There is good news in the OECD data. The Austrian population grew are a 0.5% rate in 2020. The extensive population growth is important assistance to any economy. The US has been demonstrating the importance of “fresh blood” in the economy since the very beginning and the border opening is an effective alternative to MAGA. Financial markets are happy.   

Figure 1. Evolution of real GDP per capita in Austria according to the OECD database.

Figure 2. Evolution of real GDP per capita in Austria according to the OECD database. The 2020 fall is $3705 (constant 2015 US dollars).   

Figure 3. Evolution of the growth rate in real GDP per capita in Austria according to the OECD database. The 2020 fall is 7.55%. Due to population growth, the real GDP fall is 7.05%, the population growth in 2020 was 0.5%.

 

Suez

 In the conflict between "West" and Russia/China the key element is the risks associated with international trade. I mentioned in this blog that China has a strategic hold of the Malacca strait and is able to block it any time. A similar situation is observed with the Suez channel with two Russian military strongholds near both sides of the channel. The current blockage of the Suez demonstrates the outcome of a short blockage.

Mortality statistics does not provide LGBTQ+ split. Why?

 I wonder why the mortality statistics contain gender (male and female) and race split but no sexual self-identification? Does that mean that this identification is not applicable to the dead?

Army considers change to Combat Fitness Test scoring for male, female soldiers

Army considers change to Combat Fitness Test scoring for male, female soldiers: The reevaluation of the Army Combat Fitness Test comes weeks after Congress delayed its implementation over concerns the new test created an unfair disadvantage to female soldiers.

Interesting story. I wonder that in critical conditions men and women are different in physical capabilities. That's obvious statistically and genetically (height, weight, muscular strength, body proportions, etc.). Who could even imagine that women can fit men's tests and proposed to match the same requirements? Look at sport  - records are quite different and the statistics of achievements definitely show that the average levels differ significantly. 

EU bureaucracy failed in the 2020 crisis

In this blog, a thorough economic study was presented which showed that France and Italy lost their economic and financial power after the start of the Monetary Union. Several individual cases were combined in an academic paper.    Le Figaro article "«La crise du Covid ou le début de la fin de l’Union européenne?» stated a new problem - the EU failed in vaccination crisis. The UE has no responsibility for people as such. The Le'Figaro article suggests Frexit as a solution to the problem. i.e. the same solution as I proposed considering poor economic performance within the  EU monetary system

Actually, the EU bureaucracy is not responsible for anything, and its operational speed corresponds to the absence of responsibility for real life. This is a very strong argument in favor of effective management - psychopaths without empathy are always most effective in capital management. However, COVID19 is not about effectiveness. It is about human lives, the EU failed. Recently, Austrian Bundekanzler Kurz claimed that vaccine distribution in the EU was not proportional and secret agreements between the EU medicine authorities and some (not openly named) countries led to preferences in human life protection. I was very optimistic about the EU's future a year ago and now I am disappointed. 

What is the difference between Chernobyl, Fukushima and Texas blackout

 All of these are catastrophic events with human lives lost. The Chernobyl nuclear reactor runaway is fully a personal responsibility. A nuclear reactor is not a good place for experiments. Such experiments are prohibited now. Fukushima is a technical problem with risk underestimation. This is an example of a black swan or a statistically infinitesimal event out of normal distribution. Technically, one can easily resolve this issue.  Texas blackout in February 2021 is a new type of event. There is no technical solution yet. Renewable energy sources are fundamentally unreliable and the interaction of the state-of-the-art windmills or solar panels with the potential weather outliers is inevitable in the future.  People will die in progressive numbers with the growing part of RES (however, hydropower and nuclear power are RES as well). 

Russia and EU

 I have presented in this blog the economic growth dispersion in the EU and highlighted the difference between Germany and other biggest countries - France, Italy, and Spain. The EU suffers significant economic problems with varying growth rates and economic power as expressed by price-setting capabilities that only grow with time. Economic problems make the EU very vulnerable in political and social dimensions. Russia takes the opportunity to intensify the internal conflicts in the EU by rejecting cooperation with the EU as such, i.e. with the countries with anti-Russian agenda. Germany is the main beneficiary of the economic links with Russia and this effect is also seen in the coherent and extremely fast economic growth in both countries. Nord Stream 2 makes Germany an unbeatable European power with the lowest energy cost so important for the exports - the driver of the German expansion. Russia shakes the EU in an attempt to strengthen the bi-lateral links. For Russia, political and economic relations with the EU have no sense anymore after the COVID-19 response,  deeper economic fall, and the police actions against peaceful demonstrations. Europe (Italy, France, Spain, Belgium, the Netherlands, Sweden, etc.)  is seen as a major loser, traitor, and unreliable partner in the eyes of the less developed countries. It is the best time to make bi-lateral connections and the EU showed that individual EU members are eager to save themselves. So, the time to split the EU is perfect for Russia and China.  The US only helps by supporting selected EU members.