The Republic of Austria's economy is characterized by high living standards, based on strong productivity and the innovative capacity of the corporate sector. Markets are flexible and react swiftly to economic shocks. As a result, unemployment, although rising due to growing labor supply, is significantly lower than levels observed across most of Europe, and economic performance has been one of the least volatile among rated sovereigns. Austria's resilient economy is underpinned by its tradition of wage moderation and responsible social partnership. Since the turn of the decade, Austria has embarked on a seemingly irreversible path of responsible macroeconomic policies and modernizing microeconomic reforms. The government has concluded most of its sizable reform agenda--including simplification of the convoluted tax system, reduction
