There has been speculation for a long time, but now it is clear: Austria needs to close a billion dollar hole in its budget. Various sweets for the population will now fall prey to the enormous shortage as filling material.
According to data provided by the European Commission on Sunday, Austria needs to save between 18 and 24 billion euros. Finance Minister Gunter Mayr mentions the cancellation of climate bonuses and educational leave as examples of possible measures.
During the coalition talks with the SPÖ and NEOS, the ÖVP in particular insisted on waiting for the figures from Brussels before making a decision on the exact savings framework. In any case, there should now be clarity about this data, which is probably necessary given Tuesday’s steering committee meeting.
How much should Austria save now?
For the four-year reference path without the EU deficit procedure, a total consolidation need of EUR 24.1 billion applies, with annual savings of around EUR 6 billion. With the seven-year reference path, the consolidation need by the end of the term is 18.1 billion. If you now take the next five years, that is, the period of the legislature that has just started, you arrive at exactly 14 billion.
In the period of the next government, that would be ten billion less than under the four-year trajectory. The exception is the first year of consolidation: in both variants, 6.3 billion should be saved in 2025.
While the SPÖ recently considered introducing a deficit procedure because this could make the cuts more lenient, Mayr wants to avoid this. By extending the deadline, the seven-year trajectory would provide more financial leeway for action that goes beyond simple fiscal consolidation, the Minister of Finance said in a press release. This would make it easier to provide economic stimulus.
Will sweets be canceled?
Mayr has also recognized savings potential: eliminating the climate bonus would reduce annual spending by around two billion euros. Abolishing educational leave could save around €650 million, and lowering the funding rate to the EU average would even lead to savings of around €3 billion.
As for the further timetable: A package of measures agreed by government negotiators could be submitted to the European Commission in mid-January, outlining a reduction of the budget deficit to less than three percent by 2025. If these measures are plausible for the European Commission, it may refrain from initiating an EU deficit procedure against Austria.
If such an EU deficit procedure were to be initiated against Austria, a choice could also be made between a reference period of four or seven years. It is striking that the four-year EU variant would require lower savings (14.8 billion euros in 2028) than those without the EU deficit procedure (24.1 billion euros in 2028). The seven-year path reverses this numbers game. Here, the variant without the EU deficit procedure would require approximately EUR 300 million less in savings.
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.
