It has been known for a long time, but now it is really time: the EU deficiency procedure against Austria begins. The EU Ministers of Finance want to decide this in Brussels on Tuesday. The Alpine Republic must now urgently reduce debts.
The acceptance of the recommendation of the Commission for the shortage procedure is only a formal. So far, such a recommendation has not been rejected by the ministers. “Everything runs for months as expected,” said Finance Minister Markus Marterbauer (Spö) on Monday in Brussels.
Minister: debts this year and next year too high
It was “clear” that the shortage procedure would be, because “despite extensive renovation measures”, the domestic deficit “this year and the following year would be more than three percent of GDP,” the minister said. The Republic makes more debts than permitted. In 2024 the shortage was 4.7 percent and this year 4.5 percent of GDP and therefore clearly above the permitted Maastricht limit of three percent. It must be brought below three percent.
When the deficit procedure is started, Brussels and Vienna create a plan to reduce the debt. In 2028, the federal government is planning to come from the EU deficiency procedure. If the savings plans are not implemented, the worst case can take place in the worst case, but this has never happened before.
More income and less costs
How does the government want to reduce debts? According to Minister of Finance Marterbauer, savings must be made in the expenditure and the income of the State must be increased. He explained that about two -thirds of the consolidation amount is outstanding and a third of the income side. The consolidation amount must be 6.4 billion this year, 8.7 billion in the coming year. The budget deficit is expected to fall to 4.5 percent of GDP this year and 4.2 percent next year.
ÖVP long against
Chancellor Christian Stocker’s ÖVP in particular has long tried to prevent an EU deficiency procedure. However, Marterbauer recently emphasized that he was not afraid of the process. The procedure “in essence means that we present a dismantling plan with the committee and continuously replace information”, such as the tax structure plan. The fact that a “visual meter” “was spoken at the political level has nothing to do with reality”.
Experts support procedures
Wifo -Baas Gabriel Felbermayr and IHS director Holger Bonin have pronounced an EU shortage procedure against Austria instead of a radical austerity course so that the economy has not been stuck. Shortage procedure usually offers more flexibility when exceptional economic or financial crises take place. Such crises, for example, would be natural disasters, recession or unexpected geopolitical tensions. In these cases, the EU allows a country to temporarily exceed the deficit to stabilize the economy and to take the necessary economic measures.
Not only Austria in the EU deficiency
In June 2024, the EU committee started an EU deficiency procedure against seven countries. Among them were France and Italy, the second and third largest economy within the European Union. In addition to France and Italy, Belgium, Hungary, Malta, Poland and Slovakia are also affected. A procedure is also being treated against Romania.
It is the second EU deficiency procedure for Austria. The first was open in the course of the aftermath of the financial and economic crisis of 2008.
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.
