Import Export, Ulrich Seidl, 135 mins (18)

Director Ulrich Seidl squares up to uncomfortable realities – his latest film exploits the voyeur in us all

The last film from the Austrian director Ulrich Seidl was Dog Days, about Viennese suburbanites broiling in the summer sun and being unspeakably vile to each other. It was barely palatable, and brilliant – the sort of film you need to wash down with a stiff schnapps. For Seidl's follow-up, Import Export, you'll need the schnapps again – and this time, you might want to add a vodka chaser.

Set on both sides of the East-West divide, Seidl's film (drama?, black comedy?, road movie?, quasi-documentary? No, all of these) follows the travels of two people crossing borders in search of the wherewithal to survive, both finding life abroad little better than the hell back home. Seidl is certainly not out to reassure us about modern European life, nor to entertain us, although the film has its moments of tight-jawed humour. But Import Export is mightily arresting in its sheer energy and audacity: for Seidl, life is a motorway pile-up that you can't look away from.

Half of the film concerns Olga (Ekateryna Rak), a Ukrainian nurse and single mother; she's first seen trudging through deep snow to a white-tiled hospital, then queuing for wages at a counter where she's told not to expect full payment until "next month"(Ukrainian, presumably, for "mañana"). To make ends meet, Olga takes a job in an internet porn studio, pointing her bottom at a webcam while an overheated unseen male barks orders, presumably from somewhere in Austria. Eventually, Olga travels to Vienna and finds work as au pair for a middle-class family, who come off worst of anyone in the film. The scene in which a brattish boy screams at her to find his mobile phone is cartoonishly abrasive, but horribly eloquent about the spoilt West's attitude to immigrant workers.

Meanwhile, Paul (Paul Hofman) is a young Austrian first seen undergoing farcically brutish training to be a security guard (sex and "security" being the two boom industries of a collapsing economy). All the shoving and psyching-up do little good: working in a mall, Paul is humiliatingly roughed up. Seidl seems to be setting Paul up as a thuggish oaf, but the lad turns out so ineffectually sad-sackish that we can't help sympathising with him. His beer-gutted buffoon of a stepfather Michael (Michael Thomas) enlists Paul to accompany him on the fools' mission par excellence, installing bubble gum dispensers in housing estates in the East. So off they go, trundling around the snowy desolation, visiting such inhospitable corners as the Slovakian housing estate where the cankered walls seem like thin bulwarks against the rising mountains of garbage outside.

What's terrifying about Import Export is that so much in it is real, a hair's breadth from documentary: Seidl and his crew shot in geriatric wards, porn sweatshops, blighted estates. But he uses real people too: of the two leads, one had never visited the West before; the other's biog notes that he has done time in jail and has no fixed address.

The supporting cast includes the patients of a geriatric ward. Ravaged by decrepitude or in advanced dementia, they're apparently just being themselves. The question is how much they're aware of the camera, and of eventual viewers. You worry that the film is exploiting them as exhibits, to make a point about the indignity of old age: the scene in which they're decked out in make-up and party hats for a ward party makes for particularly uneasy viewing. Then there's the scene in which a drunken Michael amuses himself by humiliating a young prostitute. The woman is not an actress, but a real prostitute, which gives the episode an unnerving immediacy. Yet there's neither titillation nor sensationalism involved. In fact, you wonder who's really humiliated here: the woman, who gazes with wry tolerance at her client, or Michael, cheerfully incarnating the extremes of male imbecility.

Import Export undeniably ups the ante on cinematic debates about voyeurism and exploitation. And there are moments when you feel Seidl overstates his case. But I came out of the film shaken rather than depressed. Amid the darkness, Seidl does have some qualified good news to impart about the human spirit: Paul ends up as a solitary embodiment of almost zen-like independence, while Olga's dance with an elderly patient has a tender, understated simplicity that gives the film a welcome uplift.

Dog Days made me feel that Seidl's contempt for his fellow humans was absolute; in Import Export there is unmistakable compassion, albeit of a steely, unsentimental kind. No film-maker has gone so far out on a limb to deliver us the hard news about the new Europe and its grubby economic realities. Forget all the puffed-up indie dabblers who fancy themselves as "guerrilla" film-makers: Ulrich Seidl, like it or not, is the real thing.