Border failed – debts too high: EU shortage procedures inevitable

The federal government has the majority of the budget deficit with 3.5 percent, the federal states and municipalities follow one percent. Social security is probably in balance. The Fiscal Council recently predicted a budget deficit of 4.4 percent of GDP.

The prediction of the Ministry of Finance is based on the in -house budget control and the tax assessment of the department, as well as the progress of states, municipalities and social security. The planned consolidation measures of the government have already been taken into account, without them the deficit of more than five percent.

Higher costs of the previous government
The reasons for the deficit were mentioned, among other things, the persistently weak economy, lower income and higher costs, for example for increased unemployment and the increase in expenditure by the previous government had already been agreed. Minister of Finance Markus Marterbauer (Spö) confessed to retain the agreed savings. Affairs and employment may not be taxed too much.

Whether the EU will initiate a deficit procedure or will not be decided in the Council for Economic Affairs and Finance in July. Various other countries also threaten such a procedure. If EU Member States make more debts than permitted, the Commission attracts a report and rejects it from the European Council. This then decides whether there is really an excessive shortage or not and recommends countermeasures. The federal government must then regularly report how it wants to reduce debts. The procedure usually lasts four years, but can be extended for up to seven years.