Negotiations on Stability Pact Continue

An agreement on a new stability pact at this time is considered very unlikely, as preliminary talks have reportedly been quite arduous according to various negotiation participants speaking to the APA. Nevertheless, this round of talks is highly distinguished, as two state governors and the president of the Association of Municipalities are present at the Ministry of Finance.

Old Stability Pact from 2012

The stability pact is about determining the extent to which each territorial authority can incur debt. The topic is fiercely contested, especially since austerity measures are necessary at all levels. While municipalities, in particular, are pushing to initiate substantive reforms with the stability pact, Finance Minister Markus Marterbauer (SPÖ) wants to focus solely on the figures in this case.

The currently applicable pact dates back to 2012 and was concluded indefinitely. Accordingly, the so-called structural deficit must not exceed 0.45 percent of GDP nationwide. For states and municipalities, this value may not exceed 0.1 percent of GDP, and for the federal government, 0.35 percent. These values are considered outdated given the budget situation. For this year alone, a deficit of 4.5 percent is budgeted. Additionally, the new EU fiscal rules require a new pact.

No negotiating party is specifying in which direction the current figures might change. However, there is some grumbling from states and municipalities that the Ministry of Finance wants to impose too much burden on the other negotiating partners, and faster than for the federal government.

Stability Pact: Municipal Association with Structural Wishes

The municipalities have once again pushed forward a few weeks ago with the aim of linking the Stability Pact with substantive points. First and foremost, the municipalities are demanding an increase in property tax. But the introduction of an ambulance fee was also among the wishes of Municipal Association President Johannes Pressl. Additionally, they want a clearer distribution of competencies, for example in the education and health sectors.

At least the composition of the Friday round promises that they want to generate more momentum with the Stability Pact itself. Finance Minister Markus Marterbauer (SPÖ) will not only be sitting opposite Pressl but also top representatives of the states, who are represented by the respective state governors Thomas Stelzer and Markus Wallner (ÖVP) from Upper Austria and Vorarlberg. Most of the other states are sending either deputy state governors or state finance representatives.

Conclusion of Stability Pact Almost Excluded

That a conclusion will be reached on Friday is considered almost excluded. Marterbauer aimed for an agreement in the fall during the negotiations that started in May. September was long talked about. Of course, this is not fixed, but time is pressing. The states need to factor the Stability Pact into the creation of their budgets. The meeting is taking place behind closed doors. Media statements are currently not planned.

(APA/Red)

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