Federal States Increase Budget Deficit

According to media reports, the financial situation of the federal states is worse than expected, while the federal government is saving more than planned. Vienna, in particular, is being blamed for the negative forecast. However, the office of Finance Councillor Barbara Novak (SPÖ) states that the Viennese figures are not new. Originally, a deficit of 3.8 billion was assumed, but this was reduced to 3.2 billion.

Budget Deficit: New Information from the Federal States Confirmed

The Ministry of Finance, as well as the office of the Styrian state finance representative Willbald Ehrenhöfer (ÖVP), who currently represents the states externally, did not want to confirm the new state figures. The finance department stated in a written communication that the states had provided new information on their budgets. These are now being reviewed at the government level and further steps are being discussed. The federal government has already taken the lead with the adoption of the consolidation budget 2025/2026. Through strict budget execution, it has been possible to perform even better than was provided for in the budget law. The improvements are also due to the consolidation measures and the slightly improved economic data.

Ministry of Finance Calls for Strengthening of the Federal States' Rehabilitation Measures

The office of Finance Minister Markus Marterbauer (SPÖ) points out that the federal states and municipalities have also begun rehabilitation measures in their forecasts for 2026. These must be consistently implemented and strengthened. In an interview with the "Presse," Marterbauer did not rule out a new austerity package for the future. "Of course, I cannot rule out that adjustments will have to be made. We must always respond to ongoing challenges. But the biggest chunk is now set with the double budget 2025/2026," said the finance minister.

The new figures come at an inopportune time for the Ministry of Finance. At the beginning of October, Marterbauer reported that the deficit target of 4.5 percent could be met. Even then, however, the minister emphasized that this was only achieved because the federal deficit was significantly lower than budgeted, while the states clearly missed their target. Marterbauer also made it clear that the figures presented at that time by the states and municipalities were essentially based on the values of the first half of the year, hence a certain uncertainty factor was present.

Budget Deficit: Stability Pact to Come This Year

The fact that the mood between the territorial authorities is currently not the best is also evident from the fact that the negotiations on the Stability Pact, which had already been paused for some time, collapsed on Friday after the states canceled them shortly before due to scheduling reasons. The Marterbauer office now emphasizes that a new appointment should take place "soon." The goal is to reach a conclusion this year. This would also be necessary to comply with EU requirements. The Stability Pact regulates the extent to which the individual territorial authorities are allowed to incur debt. A consensus was still very far off recently. The opposition reacted with criticism of the federal government and the Vienna city government to the reports of a possibly higher budget deficit. The federal government must now finally tackle real structural reforms, demanded the Green budget spokesman Jakob Schwarz in a statement. The Greens, as well as the Vienna ÖVP and FPÖ, identified a significant role in the likely higher deficit with the red-pink city government.

(APA/Red)

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