Supply Chaines

European Diary, 3.3.2021: Austria’s Chancellor Kurz says he no longer wants to be dependent on the EU and wants to look into producing his own vaccines together with Denmark and Israel. The science editor of the ORF (Austrian Broadcast), Günter Mayer, comments dryly on this move, saying that this is “not a matter of squeezing an apple”. Such complex production could not be ramped up in a short time by decree, and here Austria would have to deal with pharmaceutical companies whose sales are higher than the Austrian national budget. Not to go into further painful detail: the Chancellor’s grandiose announcements are obviously hot air intended to distract from other problems. E.g. from the following: On the same day it became known that in an Austrian showpiece enterprise, the company “Hygiene Austria”, which manufactures mouth nose protective masks, a house search took place. This is actually the company about which Sebastian Kurz proudly tweeted in May 2020: “The Corona crisis has shown that we must not rely entirely on international supply chains for the production of important protective equipment.”

The raid was carried out on suspicion that masks supplied from China had been relabeled in Austria by workers employed illegally without social security contributions and sold at a higher price than Chinese masks. Hygiene Austria’ has firmly denied this and of course the presumption of innocence applies. Piquantly, there is a close relationship of the company to a close associate of the chancellor, as already reported on August 4, 2020, the research platform Addendum: the husband of Sebastian Kurz’ head of office has a 25% stake in one of the two companies to which “Hygiene Austria” belongs, and which is now to ensure Austria’s mask self-sufficiency with large government contracts. And managing director Tino Wieser of “Hygiene Austria” is their brother-in-law. (https://www.addendum.org/coronavirus/vertragsdetails-geheim/)

The vaunted autarky seems to be faltering. But as a slogan for national awakening – and for distraction from the slowly accumulating investigations and house searches in the closer political circle of confidants of the chancellor – relabeled Chinese masks are probably also suitable. Or perhaps in the future also relabeled vaccines?

The number of corona deaths continues to grow. In the U.S., more than 500,000 people have long since died from the pandemic. New reports of irregularities in the disclosure of deaths in shelters, such as those just shaking the hitherto heroic reputation of New York State’s Democratic governor, Mario Cuomo, suggest an unknown dark figure of dead. Which are likely to exist in other states as well. These dark figures appear to be particularly high in Russia and Mexico when excess mortality is considered as a factor. Even the Russian government does not trust their own official figures. it is said that only 57,000 people in Russia had died from covid-19 by the end of 2020 and about 81,000 by mid-February, whereas excess mortality in Russia in 2020 claimed 323,000 lives. Shortly before the turn of the year, even Russia’s Deputy Prime Minister Tatyana Golikova declared that 81 percent of excess mortality was due to Covid-19. This would correspond to almost 261,000 deaths from Covid-19 by the end of 2020, while other calculations put the number of deaths at well over 300,000.
Russia, which is proud of having introduced the first vaccine, “Sputnik V,” is using the apparently highly effective vaccine primarily as an export hit, for example to Mexico and Serbia, Paraguay and Egypt, while vaccinating its own population is taking a back seat. This leads to the paradoxical result that Sputnik V will possibly help to combat Covid-19 in poorer countries. At least, if it succeeds in ramping up planned production in Brazil and India. In Russia itself, especially beyond the metropolis of Moscow, it appears that herd immunity by infection continues to be the most common prescription for acquiring antibodies.

Addendum on March 9, 2021: In the meantime, the allegations against “Hygiene Austria” and the two parent companies Lenzing and Palmers have been substantiated. While “Hygiene Austria” CEO Tino Wieser still talks about how “proud” he is to have created 200 jobs in Austria, it has become known that these are mainly in dummy companies. Bogus companies that either employ workers officially on a “marginal” basis, but actually have them work full time on the black market, or that get rid of social security contributions by going bankrupt in time. Also subsidies for not effected short-time work had been raked in. Also the suspicion that the “domestic” production partly took place in China, but that the masks were then repacked by illegal workers in “Hygiene Austria” cartons, now seems to be confirmed.

Flashback, early March, 2020: the EU is co-financing the delivery of 25 tons of protective equipment to China. The European Commission reminds national governments in Europe to report their needs for protective masks, test kits and respirators. But it will be weeks before the first requirements come through.
The first cases of Covid-19 are being reported in the United Kingdom. Dominic Cummings, advisor to British Prime Minister Boris Johnson, summarizes the British government’s strategy as “herd immunity, protect the economy and if that means some pensioners die, too bad.” No. 10 Downing Street denies.

Donald Trump has also spoken out again on Covid-19: “It’s a flu, like a flu.”

The rascals from the first bench

European Diary, 16.9.2020: My first cinema experiences were “Hurray, hurray the school is burning” and “The rascals from the first bench”. To funny box office hits of German 1960s cinema that told the adventures of spoiled brats from well done families that you somehow liked anyway. No rebels in fact. When it came to real problems, the rich father of the young “hero” bribed the director of the school. That was funny.

Not funny, however, is what the schoolboys in the Austrian government do today. They can’t even send a halfway plausible application to the EU Commission, in order to help the Austrian economy, hit by the pandemic, with extra subsidies that are conflicting somehow with fair competion rules in the EU. Actually, this is important enough to make a bit of an effort.

Already a few days ago, Minister of Finance Gernot Blümel once again scolded the EU for blocking the extension and expansion of the generous economic aid to ailing companies (fixed cost subsidies). Now they yesterday met in Vienna, interestingly enough in front of invited press representatives, to discuss the disagreements with the EU representative in Vienna, Martin Selmayr. Did Mr. Blümel in erneast thought he could publicly embarrass the EU representative.

Thanks to the Austria Press Agency and the Standard, we were able to get a closer look at an utterly failed exercise in Message Control. Martin Selmayr was obviously not amused, partly because he was the last to speak instead of being allowed to explain the EU’s objections. The rascals from the first bench first had to present to the press their own interpretation of the sinister EU machinations. Martin Selmayr, himself a rather conservative politician, visibly had to stick to himself. And then calmly pointed out to the schoolboys that they simply had to submit a legally compliant application.

And that actually “today”, that is now yesterday, was the last day to do that. Time enough to do the homework had been indeed since the beginning of August, when the concerns of the EU Commission were communicated politely to the Austrian Minister of Finance. “If today the notification takes place as suggested by Mrs. Vestager (the Commissioner for Economic Affairs) last Friday, then it will be done tomorrow,” Selmayr said. A correct application could be done, “if three intelligent people get together, within half an hour”. He hopes that the Ministry of Finance and the Commission will “get it done this afternoon”. And he offered effective tutoring: There are three possible solutions, he said, even “if it is quite tight on the last day”. Then Selmayer insisted on tearing up Blümel’s original application in detail and demonstrating in public what an unprofessional sloppiness had been delivered. Which in turn did not amuse Gernot Blümel and Minister of Tourism Elisabeth Köstinger.

Selmayr explained to them coram publico how to write a proposal. What was possible in times of lockdown, namely to blame everything on a natural catastrophe and to pretend that there were no sales at all, that no longer corresponds to the circumstances. The basis for the application must now be a reference to the severe economic crisis that triggered the pandemic: “Then the Commission can approve immediately.”

The caught Blümel became impudent. “I ask you, stop with these paragraphs; I already know that one must pay attention to legal things”, so Blümel. “It is about Austrian, not European tax money that is to be used.”

Martin Selmayr continued to show his patience and advised once again to simply work together instead of stubbornly sticking to an application that could not be approved. And he also agreed with the company representatives present, who complained about their suffering, and repeated time and again that they were entitled to be helped, even in the amount they ask for. The schoolboys in Vienna would just have to do their homework “properly”, just like everyone else.

Gernot Blümel showed himself obviously disinterested in the fact that common and legally effective rules in the EU also apply to Austria, even when it comes to “Austrian tax money”. This is exactly what these common rules, from which Austria has so far benefited particularly in the Eastern and Central European markets, are made for.

Or is this loutishness calculation, the desire to play with fire in order to continue to stir up anti-EU sentiment. And as the already running program of financial aids for businesses is not really working smoothly – isn’t it better to blame Brussels for the mismanagement of the Austrian government and its authorities anyway? After all, their is an election campaign running in Vienna. Mr. Blümel is number one on the right wing-conservative party list.
And if nothing helps, daddy can bribe the director after all.

Cofag yourself

European Diary, 24.9.2020: Minister of Finance Gernot Blümel takes the chance. The Viennese election campaign is more important anyway than the emergency aid for the suffering economy. And since the distribution of this aid is not very smooth anyway, it is good to have a scapegoat for it: Brussels.

And the EU Commission would have every reason to put the stick in Austria’s craw more clearly than it does. At the moment, constructions are flourishing that promote corruption – or at least “friendly services” – in an almost systematic manner.

Instead of regulating the disbursement of 15 billion in aid money for companies through the tax office, and thus under public control by parliament and the Court of Auditors, the federal government has set up a “Covid-19 Financing Agency” as a limited liability company. Cofag is intended to support the ailing economy with fixed cost subsidies and bridging guarantees and is financially positioned accordingly by the federal government. “In accordance with § 6a para. 2 ABBAG Act, the Federal Government will equip COFAG in such a way that it is in a position to provide capital and liquidity support measures assigned to it under § 2 para. 2 no. 7 ABBAG Act up to a maximum amount of 15 billion Euro and to meet its financial obligations”. The advantage of this construction is obvious: a GesmbH is after all not obliged to provide information to parliament.

Florian Scheuba has a biting comment on this in the newspaper Standard: “Not only members of the opposition can thus no longer annoy with annoying questions such as ‘Who gets how much tax money and why?’ Applicants can also save themselves the request for justification as to why their auxiliary request is rejected, because Cofag advisory board members are bound to secrecy. Is the Court of Auditors the last hope? No, because even its requests for accompanying control can be rejected by the agency with a hearty ‘Cofag yourself’. Here, then, an opaque darkroom is being created for future wrangling. The latest events surrounding an 800,000 Euro contract between Cofag and a PR agency, which was initially kept secret, provide an idea of how dark it will be. “The money does not flow into our own PR, but rather into the support of our homepage or the answering of media questions,” says Cofag Managing Director Bernhard Perner.

Let’s see how many media inquiries there will be – in view of the well-known critical press landscape in Austria.