Effects of Rising Defence Spending on Austria's Foreign Trade

"Europe is rearming structurally, on a timescale of at least a decade. Austria is already benefiting from this today, above all as a highly specialised supplier in European value chains: around 84 percent of defence-related value added in Austria is triggered by investment from other countries. The additional market potential is considerable. However, it can only be realised if export regimes, security of supply and access to EU programmes are put on a legally sound and reliable footing," said Bärenthaler-Sieber.

Against the backdrop of rising EU and NATO budgets and geopolitical tensions, the study focuses in particular on the opportunities and risks this presents for a small, open economy such as Austria. The focus is on the importance of potential defence goods for exports and imports, quantifying the direct, indirect, and induced value added effects of current defence investments by selected countries, identifying market share potential along international value chains, and developing economic policy options.