10/09/2013 09:26 pm ET Updated Dec 09, 2013

Fitzgeraldean Self-Reflections and Austria

"The change came a long way back, but at first it didn't show. The manner remains intact for some time after the morale cracks," reflects the psychoanalyst Dick Diver placidly as his alcohol-induced life spins out of control in one of the last chapters in F. Scott Fitzgerald's novel Tender is the Night. It is the story of the rise and fall of a glamorous American couple and the disintegration of their marriage.

Such a harsh self-critique cannot be expected of Austria's political elite consisting of Austria's socialist and conservative parties even though for Austria, change also came a long way back. During the national elections on September 29, Austria's heinous and xenophobic Freedom Party and two of its splinter groups obtained about a third of all votes, which, according to political analysts, was partially a response to the current inertia of the coalition government. The two ruling parties suffered their worst electoral defeat in history, yet in all likelihood, they will remain in government in spite of the over expenditure the past 5 years.

The attitude of the two leaders of the ruling parties can be paraphrased in a description of Dick Diver's wife, Nicole. "So delicately balanced was she between an old foothold that had always guaranteed her security and the imminence of a leap from which she must alight changed in the very chemistry of blood and muscle that she did not dare bring the matter into the true forefront of consciousness." Both incumbent chancellor Werner Fayman and vice-chancellor Michael Spindelegger do not dare to bring the true state of Austria into the forefront of their consciousness -- at least not publicly.

With a new grand coalition government -- the incumbent government has been in power since 2008 -- slowly reforming between the two, Austria is entering another period of stagnation akin to the Brezhnevian era of the Soviet Union between 1964-1982, where a visionless communist elite, consisting of spineless bureaucrats, isolated itself from the political and economic reality of its time, fed disinformation to Soviet citizens, and ultimately bore the brunt of responsibility for the upheavals in the Soviet Union in the 1980s and '90s. Austria's only (but a rather big) advantage is its thriving economy, as well as the strong leadership of the private sector, with many Austrian companies being top leaders in niche markets.

The Soviet Union metaphor may not be as farfetched as one may think, though. The majority of Austrian politicians of the socialist and conservative parties have to join their respective political entities at a very young age and slowly work their way up through youth organizations and jobs in the state and federal bureaucracy until they finally are elected to parliament, where they play a waiting game until they may be elected for higher office. Just like in the Soviet Union, private sector experience is unnecessary to advance in the hierarchy, nor is it necessary to be bold. The greatest award bestowed upon an Austrian politician is not "He is a visionary," but rather "He has not made any mistake, and he is tuechtig (industrious)" -- the biggest compliment usually reserved for a bureaucrat.

Yet problems in Austria are abundant. The entire country lives on credit. Austria has an average tax quota of 42 percent, more than 3 percent higher than the EU average, choking economic growth. The bureaucracy is bloated; Austria spends 4.1 percent of its gross domestic product on public administration in comparison to 1.6 percent in Switzerland and 3.3 percent in Germany. The welfare state is unaffordable in the long run. In Austria, with an aging society, only 42 percent of workers between the ages of 55 and 65 are employed. According to Eurostat in Sweden, this number is 70 percent.

Austria's famed low unemployment rate hides the fact that many workers are simply removed from the statistic through training programs or occupational re-training programs or are prematurely retired. Austria's educational system is backward and inflexible according to most international rankings; not a single Austrian university makes any of the top hundred lists. This is again mostly the fault of the bloated bureaucracy. According to OECD statistics, only 50 Euro cents of each Euro spent on education are reaching students; the rest is lost in administration.

This list could go on forever. The main point is that there have not been any substantial reforms in the last 5 years, and there probably will not be any in the five years to come. The Austrian Court of Audit, the government watchdog, began compiling recommendations for administrative reform years ago. There are currently 588 recommendations. One of these alone--the standardization of pension systems of state employees -- could save up to 500 million Euros through 2050. Few of these proposals, however, have been implemented, mostly due to a lack of political will.

All of this is of course "Jammer auf hohen Niveau" (complaining on a very high level) given that Austria's high standard of living and the system of grand coalitions have served the country well for the 20th century. Despite what people think, Austria had no democratic tradition before 1945. After the war, the country was filled with Habsburg monarchists, former Nazis, communists, Austro-fascists, and militant socialists. The most remarkable achievement of the Second Austrian Republic has been the slow but steady consensus toward democracy (albeit not parliamentarian democracy). This was achieved largely by the two big parties dividing the country and political offices among themselves; yet, this is no recipe for the future.

As Fitzgerald wrote when he discussed Nicole Diver's trepidations, "The new state of things would be no more than if a racing chassis, concealed for years under the body of a family limousine, should be stripped to its original self. Nicole could feel the fresh breeze already -- the wrench it was she feared, and the dark manner of its coming." Unless Austria, wants the rightwing, reactionary and xenophobic Freedom Party to be part of government, it needs to rapidly reform the family limousine exemplified by the Brezhnevian grand coalition of conservatives and socialists whose fear of the wrench has yielded little progress in the last 5 years.

A version of this article has appeared in The European Magazine.