An even sharper austerity course should have been intended to date. Due to the persistently weak economy, the budget hole is twice as large this year with a maximum of twelve billion euros with twelve billion euros. To prevent a shortage procedure from the EU, another billion euros in savings are needed.
The poorest plans for the federal government to renovate the budget to renovate through the poor economic data. Economic Research Institute (WIFO) and Institute for Higher Studies (IHS) only present their predictions on Thursday, but it is already clear that they are being reduced considerably. In particular, growth must be revised by a whole percentage point. This means that 2025 will be the third year of the recession in a row.
Consolidation needs double
If the economic engine does not run smoothly, then the income from the state (taxes, taxes, etc.) also bubbles bubbles considerably lower than planned. The result: instead of the nearly 6.4 billion euros that the government wants to save this year, up to twelve billion euros must be needed to get the budget under control.
During the budget committee in the National Council on Monday, Minister of Finance Markus Marterbauer (Spö) spoke about an extra need of six billion euros. President Christoph Badelt, who talks about a need for consolidation in the order of another four to five billion euros, is also presented.
EU deficiency procedure should come
Where the extra billions come from, is now a task for the Government Parties ÖVP, Spö and Neos. In any case, there is nothing to be found in the presented government program. However, it will not work without a sharper austerity course, especially on the output side. It is still to be seen whether other new taxes (for example, wealth tax) will come to households.
In any case, a shortage procedure of the EU must be properly established. To prevent this, several billion euros would be needed this year. Finance Minister Marterbauer, however, emphasized on the weekend that such a “neck and leg fracture” would be. It means that the budget measures must be continuously coordinated with the committee – and he was “not at all” afraid. ÖVP Financial State Secretary Barbara Eibinger-Miedl also sees it as follows: “We will be able to tackle a shortage process if you otherwise run the risk of suffocating the economy.”
Spö Boss Andreas Babler welcomed this “demotionalization of the debate” and sees it differently than the FPö. “Such a procedure would mean massive financial burdens and the loss of budgetary sovereignty for the population,” said general secretary Michael Schinedlitz. Possible consequences are also increasing credit costs for entrepreneurs, home builders and consumers.
However, there will only be certainty about the necessity of a procedure in May when the next EU business predictions will come.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
