Economist Monika Köppl -Turyna regards further efforts and structural reforms as inevitably in the “Krone” interview. Especially with the financing, Austria remains far ahead despite cuts. The biggest problem is expensive federalism with its many double tracks.
It is not an ambitious program that the Minister of Finance has presented this week, finds Monika Köppl-Turyna, director of EcoAustria. It is just enough to come back from the EU deficiency procedure in several years. Although the need for savings since the beginning of the year has increased considerably from 6.4 billion euros, the government has not adjusted its goal.
To actually relieve the federal budget, the top economist argues in the “Krone” interview, especially for structural reforms. A first important starting point is financing. The government saves a billion euros here, but despite everything they stay high. In 2020 the expenditure of the State exploded because of the pandemic (see graphic). After the exceptional years they fell again, but remained well above the level of 2019, in 2024 at a total of more than 13 billion euros.
Austria promotes a lot in comparison
In the EU comparison we have the fifth highest financing percentage with regard to GDP (6.7 percent). “It’s good that a lot of financing is now being returned,” said Köppl-Turyna. However, the state can save even more by two steps: First, all financing must be evaluated to their safety. “A subsidy is not always the right instrument to achieve a goal. And if different political goals have to be achieved at the same time, no one is often possible with anyone.” The cost-benefit ratio is often often incorrect. B. A very expensive measure, given the CO₂ savings.
Secondly, the financing has also been brought for years because of federalism. “The basic problem is: income and responsibility for costs are not in one hand”. The federal government assumes the money, the countries spend it generously while the government loses a little control. Köppl-Turyna warns: “The abolition of individual financing should not lead to the introduction of similar award to other regional authorities.”
Pensions are a large lever
Apart from that, there is a large lever with the guesthouses. “However, the limitation of the gang pension only improves the situation temporarily. In the long term, sliding the age and the corresponding higher pensions results in extra costs.” Köppl-Turyna criticizes that only individual screws are rotated instead of tackling a large reform.
90 percent of the extra costs will come from the sector by 2029. To actually relieve, according to Köpp-Turyna, you must strengthen the operational and private pillar. Denmark and Sweden can be role models.
Interest payments are increasingly taxing the budget
The high debt of Austria and the hesitant split also means a burden for the state. This year there is an additional financing effort of 1 billion euros, next year 560 million euros will be estimated.
A comparison with Germany is not very optimistic: “In 2012, Germany had a similar value for Austria with 82.9 percent in 2012, but since then the quota has fallen considerably to 62.5 percent in Germany,” the expert said. This installs space for important investments, measures for the business location and especially lighting.
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.
