April 28 (Bloomberg) -- Austria's plans to keep out workers from formerly communist neighbors is vexing employers who say they need the manpower.
Lawmakers on May 1 plan to extend a ban on workers from newer EU members such as Hungary and Slovakia for three more years, on concern that an influx of people would mean fewer jobs for Austrians and put pressure on wages, said Holger Fuerst, an Economy Ministry spokesman.
Austria isn't ready because it's ``surrounded'' by new EU members, Fuerst said. European Union member states France, Spain and Finland are opening their labor markets to the workers.
Employers such as Erste Bank AG and rubber products maker Semperit Holding AG say Austria's proximity to faster-growing markets is spurring their sales. Central bank figures show Austrian companies spent $27 billion from 1992 to 2005 expanding in the region, rekindling ties to Europe's east that date back to the Austro-Hungarian Empire in the 19th century.
The restrictions on the labor market ``weaken Austria's position as the headquarters for eastern Europe,'' said Rupert Dollinger, head of human resources at Erste Bank in Vienna.
While Austria's economy grew about 2 percent last year, less than half the pace of Hungary, Slovakia, Slovenia and the Czech Republic, the country remains far richer.
Gross domestic product per head is at least two-thirds more than in the Czech Republic, Slovakia and Hungary. The jobless rate stands at 5.2 percent, less than half the level in Slovakia. At about 2,650 euros ($3,300) a month, wages in Austria are more than three times higher on average.
`Political Suicide'
Austrian Chancellor Wolfgang Schuessel's governing coalition has included the anti-immigrant Freedom Party or Alliance for Austria's Future since 2000. All parties jostling before November elections oppose opening the job market.
The number of Austrian citizens who oppose further EU enlargement rose to 60 percent in 2005, from 58 percent a year earlier, according to an October Eurobarometer survey by the European Commission in Brussels. That's more than the 51 percent average of people in the EU who are against enlargement.
``I don't see a slight chance for an opening of the Austrian labor market this year,'' said Rene Siegl, managing director of the Austrian Business Agency in Vienna, which helps to attract foreign investors to the country, in an interview. ``It would be political suicide for the government.''
The EU's 15 older member states had until March 31 to say whether they would join the U.K., Sweden and Ireland in opening up jobs to people from the 10 mainly former communist countries that joined May 1, 2004. Germany, Portugal, Luxembourg, Belgium, Italy, Denmark, Greece and the Netherlands maintained their limits.
Acting in Union
Erste Bank, which owns savings banks in the Czech Republic, Hungary and Slovakia, generated 61 percent of its net income last year in the region. Fourth-quarter profit at the Vienna-based bank rose 29 percent to a record 203 million euros.
Semperit, also based in Vienna with factories in Poland and the Czech Republic, recruits from across the region, Chief Executive Officer Rainer Zellner said in an interview. ``We are one European Union, so let's act like one,'' Zellner said.
Out of the total 3.2 million people employed in Austria, 12 percent were foreigners, with the majority from eastern Europe, the Balkans and Turkey, according to the Austrian Statistics Office. Most were working with special permits designed to fill jobs in services such as health care, said Fuerst at the Economy Ministry.
``I'm worried that strong labor competition from the east would decrease wages in Austria,'' Klaus Kordik, a 34-year-old payroll accountant from Vienna who is against migrant workers. ``Czechs, Slovaks or Hungarians could work for less money.''
Hop Across
Polish and Czech passport holders wait as long as two months for a permit to work in Austria, which they receive only if there is an opening and the company proves it couldn't be filled by an Austrian. A temporary permit lasts a year.
There are about 80,000 to 90,000 people working illegally, half of whom are foreign, according to a study by Friedrich Schneider, a professor at Johannes Kepler University in Linz.
Vienna is 60 kilometers (37 miles) from Slovakia's capital Bratislava, or an hour by train. It's no more than three hours by car or train to Budapest in Hungary.
``Due to the short distances, people might commute to their work to Austria on a very large scale,'' said Bettina Heise, a spokeswoman for the Chamber of Labor, which opposes the opening of the job market, in an interview from Vienna.
