What to expect – Seven questions about the EU deficiency procedure

1. What is a shortage procedure and why was someone decided against Austria?
The reason for the shortage procedure is that with its budget deficit of 4.7 percent of GDP last year and the planned 4.5 percent this year, Austria is clearly above the permitted limit of three percent of the EU’s so -called Maastricht criteria. The EU committee found an excessive deficit in June and ordered a procedure.

2. Why does the EU intervene in the case of too high debts in individual states?
Untelected developments in economic policy can have consequences for all Member States. To recognize and prevent this early, there is the so-called European Semester, a monitoring and coordination process. The rules for this process are defined in the stability and growth act. It is the framework for the coordination and monitoring of the financial policy of the individual EU countries.
In the previous year, the shortage in Romania shot more than nine percent and the EU committee now offers a new correction path from Romania for the first time. It is also the first time in the Chamber that funds from the EU budget can be suspended for Romania if there is still no progress. Real sanctions are only possible against countries that also have the euro as a currency. This is not the case in Romania and there have never been sanctions.

3. When does the procedure start and when does it end?
The EU committee offers a shortage of reducing debts in the coming years. This reference path includes a period of four years, which can be extended to a maximum of seven years at the request of a state such as the reform and investment projects. Austria now has time until October 15, 2025 to become active and to present the necessary measures. According to this, Austria should report at least every six months about the progress in the implementation of this recommendation, in the spring as part of the annual progress report and in the autumn in the draft budget until the excessive shortage has been corrected.
It is planned for Austria in 2028 to put its new debt in 2028 that it corresponds to the EU rules and that the deficit procedure can be formally terminated the following year.

4. What are the benefits of a shortage procedure?
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 occur (eg recession, natural disasters or unexpected geopolitical tensions). In such cases, the EU allows a country to temporarily exceed the deficit to stabilize the economy and to take the necessary economic measures. A strict limitation would cause extra loads at such times, because the country can be forced to lower in crisis or increase taxes, which can delay the recovery.

5. Are there sanctions if the requirements are not met?
As part of a shortage procedure, sanctions can be imposed against a Sinner deficit if the requirements for correcting an excessive shortage do not meet the requirements that have been placed on it. In the case of non -compliance, fines can ultimately appear in billions – which has never happened before.
A Troika like then in Greece will certainly not move in Austria. Of course it is not beneficial for the external image as a country like Austria, which has always taken place at EU level as a particularly economic way, now that there is a procedure due to the high debt. However, that is not the only one.

6. Is Austria the only EU deficiency sinner?
No, on the contrary. 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.

7. What is the attitude of the government?
Chancellor Christian Stocker’s ÖVP in particular has long tried to prevent an EU deficiency procedure. Finance Minister Marterbauer repeatedly emphasizes that he is not afraid of the procedure and that this is not a sword of Damocles about Austria. 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”.