It is clear "that there is a close connection between the budget and economic development," said Finance Minister Markus Marterbauer (SPÖ) at the doorstep before the start of the ECOFIN. "This means that if economic development is weaker than expected - and this is becoming apparent for this year, WIFO (Economic Research Institute, note) predicted a real growth of 0.6 percent in the December forecast, and we must probably expect that a minus will precede the next forecast - then this will have an impact on tax revenues and thus on the state budget."

Avoidance of Deficit Procedure Still Certain for Finance Minister Marterbauer

Marterbauer emphasized that the government had agreed to look at "how we will deal with it" based on the new forecast figures. For him, the exchange with the EU Commission is important. Earlier in the morning, Raiffeisen Research released a new forecast predicting a 0.7 percent economic contraction for 2025. In their economic forecast last December, WIFO and IHS still assumed economic growth in Austria of 0.6 and 0.7 percent, respectively, for 2025. The Ministry of Finance referred to Marterbauer's statements at ECOFIN regarding the forecast, where he generally commented on the economic situation.

Once again, Marterbauer emphasized at the doorstep in Brussels that the government agreement stipulates that a procedure due to an excessive deficit is to be avoided. "We are not only extremely eager to achieve this, but we are quite sure that we will succeed. Should new circumstances arise, we will discuss them" - but he did not want to preempt that.

Asked about the defense expenditures discussed in the EU, the minister said that it is also important here to use the funds as effectively as possible. "'Whatever it takes' cannot apply in any area, because resources are scarce," he said on this topic. It is "very important to ensure that defense expenditures are implemented as efficiently as possible. We have no euro to give away just like that. The coffers are extremely tight, which is why priorities must also be set in the defense sector."

Finance Minister Marterbauer to Present Double Budget in May in Parliament

He had the opportunity to present the priorities of Austrian budget and financial policy at the Eurogroup. He explained that "the consolidation of the budget is the focus." It was "very positively received that the parliament had already passed the first consolidation measures last Friday." He was able to explain that "the consolidation package agreed with the Commission is on its way." He also stated that "we are aiming for a double budget for 2025/26, which we will then bring to parliament in the first half of May."

"At the same time, I emphasized that it is necessary to take the overall economic circumstances into account when consolidating the budget. After all, we are probably in the third year of recession, unemployment is rising sharply. We also need additional measures that provide economic stimuli. Because budget consolidation can only succeed if the economy recovers and employment grows."

(APA/Red)

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