EU Deficit Procedure: No New Requirements for Austria

The new EU debt rules focus on the growth of net expenditures for deficit assessments. Interest payments, one-off effects, temporary measures, and cyclical elements in unemployment benefits are excluded from these expenditures. According to the EU Commission, Austria's net expenditure growth will increase by 2.2 percent in 2025, within the recommended upper limit of 2.6 percent. For 2026, a growth of 2.1 percent is predicted, below the limit of 2.2 percent.

EU Deficit Procedure Against Austria Continues

The Commission had already assessed Austria's 2026 budget plan in June, explained the responsible EU Commissioner Valdis Dombrovskis at the press conference on Tuesday afternoon. The plan complies with the recommended upper limits. Should there be significant deviations, such as if net expenditure growth were to increase significantly, "then we must monitor this closely." The Commission conducted its assessment based on the budget draft and the Commission's forecast "and we come to the same conclusion": Austria is expected to adhere to the maximum net expenditure growth.

At the current time, no further procedural steps would be taken, but the ongoing procedure remains open, according to the Commission's statement. It announces that the situation will be reassessed in spring 2026 when the final data for 2025 would be available. This will take place as part of the European Semester's spring package in May or June. However, the affected member states remain bound by the respective Council recommendation to reduce their budget deficits. In addition to Austria, deficit procedures are currently underway against Belgium, France, Hungary, Italy, Malta, Poland, Romania, and Slovakia.

The Commission did not publish its own assessment of Austria's 2026 budget plan on Tuesday. Vienna has already sent the desired plans and figures for 2025 and 2026 to Brussels with the double budget in May. This was assessed by the Commission in June as being in line with the regulations of the EU Stability and Growth Pact. Today, assessments for 17 other EU countries were published; five of them are at risk of not meeting the requirements.

Planned End of EU Deficit Procedure Against Austria in 2028

The reason for the opening of the deficit procedure was that Austria, with its budget deficit of 4.7 percent of GDP last year and the planned 4.5 percent this year, is clearly above the allowed limit of three percent of economic output according to the Maastricht criteria of the EU. The EU Commission had identified an excessive deficit for Austria in its spring package for the European Semester in early June and announced the recommendation of a procedure, which was approved by the Council of Finance Ministers in July. Vienna reported the measures to combat the deficit to Brussels by the deadline of October 15. It is planned that Austria will exit the deficit procedure by the end of 2028.

(APA/Red)

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