Inflation in Austria remained high in March at 9.1 percent – and higher than the European average. The government’s measures to combat inflation are therefore often the subject of criticism. Insufficient accuracy, excessive financing or watering methods are particularly criticized. Finance Minister Magnus Brunner (ÖVP) defended the government’s measures in the Economic Journalists’ Club on Monday.
“Inflation is still way too high, there is no doubt about that,” says Brunner. “It is our job to support, we have done that en masse.” However, when taking measures against inflation, there must always be a balance between accuracy, speed and social equilibrium.
Accuracy “not successful everywhere”
Brunner admitted that it was “not always possible” to be accurate enough. However, there was not always sufficient opportunity for precise measures – for example, the necessary data interfaces were often lacking. The minister hopes for improvements here in the future. However, measures to counter inflation are always expertly coordinated and “reluctant when it comes to the watering can,” says Brunner.
Compared to other countries with currently lower inflation than in Austria, it should also be taken into account that there would be problems elsewhere. For example, Spain or France would have had less inflation, but the countries would have had to accept significant losses in median household income. In Austria, on the other hand, household income has risen slightly on average. There is currently no country in the world that has “low inflation, high household income, high growth and a balanced budget,” says Brunner. So you have to decide what factors you want to pay attention to.
Brunner expects a shortfall of three percent
The Minister of Finance is therefore closely monitoring future budget developments. For this year he expects a deficit of just over three percent, which puts Austria slightly above the Maastricht criteria and clearly too high for Brunner. In 2026, he aims for a deficit of around 1.5/1.6 percent. The debt must also be reduced, towards 70 percent.
“Budget won’t break in a crisis situation”
In any case, it is important to achieve a normalization of the budget in the coming years. “A budget does not break in a crisis situation. You ruin a budget if you don’t take the distraction to come out well after the crisis,” says Brunner. In general, society’s expectations of the state should be lowered. “You have to say goodbye to the fact that the state can solve everything and compensate 100 percent,” said the Minister of Finance.
Fighting inflation is not only the responsibility of the state, but “on a large scale” especially of the European Central Bank (ECB). It is questionable whether everything has been done right at this level, but the ECB also lacked room for maneuver, as tightening the rate screw too early would have had a huge impact on the debt situation in some EU countries.
Criticism from FPÖ and NEOS
The FPÖ and NEOS expressed their dissatisfaction on Monday with Brunner’s statements about the government’s inflation measures to date. “Brunner turns a blind eye to the fact that the government’s watering can policy has only further fueled inflation,” criticized NEOS spokesman Gerald Loacker. Instead, contrary to criticism from experts such as Budget Council boss Badelt, he shifts the responsibility to the ECB.
FPÖ Secretary-General Michael Schnedlitz, meanwhile, demanded that Brunner follow Portugal’s example, which is abolishing VAT on 44 basic foodstuffs. For Austria, too, such a measure would be “a simple and targeted measure that would quickly relieve households with low incomes in particular,” said Schnedlitz.
Source: Krone
I am Ida Scott, a journalist and content author with a passion for uncovering the truth. I have been writing professionally for Today Times Live since 2020 and specialize in political news. My career began when I was just 17; I had already developed a knack for research and an eye for detail which made me stand out from my peers.
