Austria Faces Deficit Procedure Without Measures Against Budget Deficit

The proposals for measures to reduce the budget deficit must be submitted to Brussels "in time" before the decisive EU Council meeting on January 21 by the current government. The EU Commission is considering initiating a deficit procedure, as the budget deficit is above the Maastricht criterion of three percent.

Austria Can Still Avoid Deficit Procedure

The next step would be to recommend to the Council of Economic and Finance Ministers to establish an "excessive deficit". This body then makes the final decision. The next Council meeting will take place on January 21 in Brussels. According to the data sent by the EU Commission to Vienna, Austria needs to save between 18 and 24 billion euros. The package of measures due before the Council meeting must outline a reduction of the budget deficit in 2025 to below three percent.

"If these measures are submitted in time, we can assess them and then recommend to the Council not to initiate the procedure," said the spokesperson on Tuesday. The EU Commission still hopes that the current Austrian government will present the measures. If these "come in time, we can assess them". The Economic and Finance Ministers would then decide on the basis of a possible new recommendation from the EU Commission.

The looming deficit procedure has led to heated discussions in Austria in recent weeks. It is also likely to play a significant role in possible government negotiations between the FPÖ and ÖVP: While the People's Party wants to reduce debt and avoid an EU procedure, economic researchers assume that the FPÖ would stretch the budget consolidation over a longer period and possibly accept a deficit procedure.

(APA/Red)

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