Deficit Procedure Against Austria Draws Closer

The reason for the deficit procedure is that Austria had a budget deficit of 4.7 percent of GDP last year and the planned 4.5 percent for this year, which is significantly above the permissible limit of three percent of economic output according to the EU's Maastricht criteria.

Deficit Procedure: Austria Should Eliminate Excessive Deficit by 2028

In early June, the EU Commission identified an excessive deficit for Austria in its spring package for the so-called European Semester and announced the recommendation of a procedure. According to the Council recommendation proposed by the Commission, Austria is given a deadline until October 15, 2025, to take action and present the necessary measures. "After that, Austria should report on the progress in implementing this recommendation at least every six months, in the spring as part of its annual progress report and in the fall in the draft budget plan, until the excessive deficit has been corrected," it continues. And: "Austria should therefore eliminate the excessive deficit by 2028."

Marterbauer Points to Measures Already Taken Before Deficit Procedure

"The recommendations presented by the EU Commission on Austria's fiscal structure plan meet expectations and at the same time show that we have taken the right measures," said Finance Minister Markus Marterbauer (SPÖ) in a statement to APA. "Primarily, the documents state that the fiscal structure plan, which we reported to Brussels on May 13, complies with EU rules, and that the recently adopted double budget is also in line with the rules."

If the Council of Finance Ministers now follows the recommendations on July 8, it would show that the path of the federal government is also confirmed by the EU. "The goal remains to reduce the spending deficit to under 3 percent by 2028. The European Commission also considers this realistic," emphasizes Marterbauer. With the measures already taken in healthcare, pensions, education, labor, and tax areas, the first important laws have already been passed. "To achieve the ambitious goal of a 3 percent deficit by 2028, further steps must be taken and the consolidation course maintained," said Marterbauer.

Fiscal Structure Plan Submitted Late Due to Government Formation

The fiscal structure plans were due for the first time last year as part of the reformed Growth and Stability Pact. According to EU debt rules, a country's debt should not exceed 60 percent of gross domestic product (GDP). The annual budget deficit should also not be higher than three percent of GDP. However, with the reform, countries that do not meet these criteria are granted more flexibility in achieving these goals. They must specify in the fiscal structure plans with which measures they intend to achieve the goal.

Austria received an extension for submission in Brussels due to the government formation. The net expenditure paths contained in the structure plans represent the only concrete indicator for budget monitoring at the EU level. Countries like Austria, whose deficit exceeds the allowed values, have received so-called reference paths from the Commission. The period for budget adjustment is normally four years but can be extended if necessary.

(APA/Red)

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