The government is planning to save 14.6 billion euros by 2029. But so far, only 8.4 billion has been reasonably determined, the Fiscal Council warns. Many measures are only announced, so the budgets see a gap of 6.2 billion euros. The austerity course takes longer, fundamental reforms are essential.
The fact that the government has a renovation plan is positive, according to President Christoph Badelt, chairman of the Fiscal Council. However, many austerity measures are currently only sections. Example: According to the plan, the federal states must contribute a percentage point of GDP, which would be around five billion euros. “But you can’t buy that, difficult negotiations are needed.”
At the same time, short -term measures, such as the suspension of the inflation adjustment of the family benefit or certain savings in the ministries, must expire fairly quickly. In particular, the government expects 6.4 billion euros in savings, the Fiscal Council considers only 4.6 billion as realistic. 1.8 billion euros are missing.
The Fiscal Council therefore assumes that our budget deficit will remain more than four percent of the economic output-the government wants to get the EU limit of three percent in 2028. To create this goal, an additional 8.4 billion euros should be increased.
Interest payments quickly
The government debt will continue to explode, from 84 percent this year to more than 91 percent. Fatal consequence is that the interest payments for this growing debtbackpack will reduce 1.5 percent to no less than 2.4 percent of GDP.
That is why the formal shortage procedure against Austria must be decided on 8 July, then we must then give Brussels a precise explanation twice a year because we can claim the budget. This will take a lot after 2029. You also need money for economic and climate protection measures.
With the previous austerity measures this will not be possible, Bathelt warns. Finally, fundamental reforms that have been discussed for decades must also be implemented. “We have to cut enormously.” A reconsideration of federalism is necessary, for example by awarding clear responsibility and costs in the field of education and health.
Long -term adjustments are also required for pensions. Expert Badelt is personally for increasing the legal inaugural age.
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.
