“Things are, right now, Covid-driven again, really,” begins Partner Marc Lager, the head of the EU Competition Law and Global Trade practice in the Vienna office of Deloitte Legal. “The numbers have been going up a bit lately, as in other parts of Europe, and there have been talks of reintroducing some of the measures that were in place earlier in the year.”
Lager says that a new foreign investment review framework has been introduced, reflecting last year’s introduction of EU FDI-Screening Regulation 2019/452, which established a European framework for the screening of foreign direct investments into the EU. The new law, he says, allows the authorities “to review a large number of transactions in a wide range of industries that could potentially leave key infrastructure points exposed to foreign investors, especially during these troubled times.” He adds that “Austria’s Minister of Economic Affairs stated recently that some 100 transactions would fall under the scope of the new framework each year. Since a vast number of industries fall within the scope of the new framework and since the authorities can prohibit transactions to safeguard (national) 'security or public order,' the law is a public policy tool, so it’s best to keep an eye on near-future developments.”
Locally, Lager reports that Vienna has held its municipal elections. “These have gone by peacefully and in order," he reports, but says that "what I’ve found to be rather interesting is that one of Vienna’s nine municipalities plans to introduce an investment incentivization scheme by supporting companies in exchange for temporary equity.“ Other than that, Lager says, nothing much has been going on – either in Vienna or in Austria in general – in terms of legislation that isn't directly Covid-related.
And on that subject, Austria’s economy, like most in Europe, has not been spared by the fallout of the pandemic. “Personally, I hope that the overall economy will bounce back next year, but I must admit that it is quite difficult to predict anything at this point,” Lager says. On the one hand, he says, “there has been speculation by local experts that governmental support to distressed sectors will be severely strained by the end of the year and that mass lay-offs could follow.” On the other hand, he says, information coming from EU experts has been “more positive, with more optimistic predictions.”
The effects of the pandemic have been felt in the legal sector as well, Lager says. “We have been lucky since we [at Deloitte Legal] are a growing practice. But some firms have taken advantage of the shortened work time scheme that the government introduced earlier this year to stimulate businesses not to fire people by subsidizing a portion of their salaries.”
Lager says that, in general, various types of state aid have been “more present in client requests,” and he believes that, going forward, this may be a more active practice. “Businesses will want to know what happens when they acquire a company that has previously received some form of state aid, what their potential obligations and exposures might be," he says. "With the pandemic still going on – this seems likely to be a hot topic in the future.”