Amid Europe crisis,an Austrian job miracle

Unlike his contemporaries in Greece,Spain or Portugal,Liedl has never feared unemployment. He always knew he wanted to follow in the footsteps of his father and grandfather at Voest,where he is part of an extensive apprenticeship programme.

I decided on Voest right away, said Liedl,who has been training since the age of 15 for an office job at the steelmaker.

Liedl is benefiting from a long tradition of cooperation between labour and employers in Austria,whichmindful of how mass unemployment helped fuel the rise of fascismplaces great importance on getting people into jobs and keeping them there.

Culturally,not much has changed since Social Democrat ex-chancellor Bruno Kreisky famously said in 1990: A couple billion more in debt causes me fewer sleepless nights than a

few hundred thousand more jobless would.

Its a model that European Union leaders can look at while deciding how best to use 6 billion euros earmarked for tackling the blocs soaring youth unemployment. Figures released on July 1 showed unemployment levels in the 17 EU countries at record highs.

At 4.9 per cent,Austria has the lowest jobless rate in the EU and the second-lowest youth unemployment,which stood at 8 per cent in April,as measured by the EU statistics agency Eurostat. In comparison,youth unemployment in Greece stands at 63 per cent and in Spain at 56 per cent.

When one of Austrias biggest building firms,Alpine Bau,went bust last month,the government came up with a 1.5 billion euro stimulus package to create more construction jobs.

In Spain,home of Alpines parent FCC,the news barely registered in an environment of 27 per cent unemployment.

Meanwhile,the Austrian aircraft parts supplier FACC,unable to train enough skilled staff through its own apprenticeship scheme,advertised in Spain for engineers. It got a thousand applicants for four places.

Unemployment in Austria has always been low. That is linked to an overall consensus in politics and society, said Andreas Woergoetter,economist at the Organisation for Economic Co-operation and Development OECD.

Foreign dignitaries often visit state-financed training workshops to seek clues to the Austrian job

miracle,which confounds many free marketeers.

They are shocked to find out it costs 14,000 to 16,000 euros a year for each spot, said Herbert Buchinger,chairman of the governments employment service,AMS.

The service guarantees any young person a job offer,targeted training or state-subsidised employment within six months of their registration as unemployed.

Private companies may spend even more: Voestalpine,which has been hiring apprentices since 1940,invests 70,000 euros in each young person over the course of up to four years training.

Hubert Haider,who coordinates the apprenticeship programme at Voestalpine Steel in Linz,says it is worth it. The whole company supports it,and it is important for example that Dr Chief Executive Wolfgang Eder personally hands over the certificates at the end of the training, Haider said.

Austria spends more than half a billion euros a year on measures to promote jobs for people aged 15 to 24,of which around 150 million comes from the private sector. In all,its employment service has a budget of 1 billion euros for job promotion. It gets a head start by focusing on young people aged 15 or 16.

Austria benefits from its close economic ties to European powerhouse and neighbour Germany,and from a structure that allows the federal government to implement employment policy centrally without having to go through regional authorities.

Buchinger said Austria made a critically important policy decision in the 1970s to focus on supplying the German engineering and auto industry rather than develop its own car sector,thus piggybacking on its neighbours export might.

It also used its geography and historical ties with emerging economies in the former Communist east to tap growth markets there. We took part in the reform hunger in these countries.

Like Germany,Austria handles pressure on jobs during economic slumps by subsidising companies to keep staff on payrolls at reduced hours. This means employers have skilled workers on hand when an upturn comes. But unlike Germany,Austria makes it relatively easy for companies to dismiss workers,who on average change jobs every three years.

Austrian workers have also been restrained in their pay demands,keeping unit labour costs competitive at a time when they have rocketed in some peripheral euro zone countries. There is no minimum wage.

But despite its sparkling headline numbers,the Austrian job machine still has a few shortcomings. Few Austrians work until the standard retirement ages of 65 for men and 60 for women,which means pensions help take up the employment slack. The actual retirement age is 57.6 years on average,although Austrians tend to start work young.

Buchinger said Austria has

lessons for others. I would tell unions not to fear deregulation of job protection in labour contracts. You mustnt see only the risks of a dynamic labour market,but also the opportunities.