Coalition Talks: ÖVP and SPÖ Reach Budget Agreement
With a savings target of 6.4 billion euros for 2025, the budget path submitted to Brussels during the blue-black coalition talks is to be adopted, with savings of 8.4 billion euros planned for 2026. However, details are still being negotiated. The Federal President will be informed at the earliest on Friday.
The agreement aims to continue avoiding an EU deficit procedure. Contributions to budget consolidation are expected from taxes on banks and energy companies. Additionally, the contribution to health insurance for pensioners is also set to increase.
According to "Standard" (online), it has been agreed that significantly more money should flow into the budget from the stability levy for credit institutions. Instead of 150 million euros annually, an additional 350 million euros is expected for 2025 and 2026. The expired windfall tax on domestic energy companies is to be extended and is expected to bring in 200 million euros. New regulations on the sale of newly designated land and private foundations are also expected to generate revenue. Changes are also planned for the real estate transfer tax - it will be payable in the future even when a company holding a property is sold.
Climate Bonus and Educational Leave
The climate bonus is to be abolished as planned by Blue-Black, but there will be some compensation, such as measures for commuters. Similarly, with educational leave: it will be abolished, but a successor regulation with stricter access requirements will be introduced. The top tax rate of 55 percent on incomes over one million euros, originally set to expire in 2025, is to be extended. The prescription fee is to be frozen. Measures planned by Blue-Black, such as savings in ministries, cuts in subsidies, or the increase of the digital tax, are expected to remain. However, no one in the parties wants to officially confirm this.
Information suggesting that the Federal President should be informed about the budget agreement on Thursday did not ultimately confirm. On Thursday afternoon, the ÖVP stated that the talks "about a possible government formation" would continue into the night and "no result is expected today." Friday is now the next opportunity to report to the head of state on the progress of the talks. Subsequently, the public could be informed. However, this is not yet certain, as heard from both parties.
Education and Foreign Affairs for NEOS?
It remains open whether the NEOS will be formally included as a coalition partner. Reportedly, two positions in the government - Education and Foreign Affairs - have been reserved for the party, should they decide to engage in genuine government cooperation. Alternatively, the ÖVP and SPÖ could attempt to secure the slim majority of just one mandate on a project basis with NEOS, the Greens, and, if interested, the FPÖ. Since this question has not yet been resolved, it is considered rather unlikely, though not impossible, that the government declaration will take place as early as next week at the regular session of the National Council on Wednesday.
Regarding the distribution of portfolios, it seems they are already quite advanced. According to reports, the SPÖ would be assigned, for example, Finance, Infrastructure, and Social Affairs. While Lower Austria's state leader Sven Hergovich is the clear favorite for the Ministry of Infrastructure and ÖGB Vice President Korinna Schumann is set for the Social Affairs portfolio following the withdrawal of GPA leader Barbara Teiber, there are reportedly still two candidates for Finance. On one hand, there is the manager Silvia Angelo from the ÖGB, and on the other, the former ORF Director General Alexander Wrabetz.
The ÖVP would retain, among others, the areas of Interior, Defense, and Agriculture, which could each be filled by the current heads of the departments. Justice could also fall to the People's Party, but it might also be filled by someone at least formally independent.
(APA/Red)
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