Stability Pact: Novak Expects Solution

Tyrol's Governor Anton Mattle (ÖVP) expects a "conclusion" at the next negotiation round on the Stability Pact on Friday at the Ministry of Finance in Vienna. "For anything else, the public lacks understanding and the federal states lack patience," Mattle told the APA. Vienna's City Councillor for Finance, Barbara Novak (SPÖ), is also optimistic. Her Styrian counterpart Willibald Ehrenhöfer (ÖVP) announced a coordinated position among the states.

The last negotiation round was canceled at short notice by the states. Shortly thereafter, it became known that the deficit of states and municipalities could be up to two billion worse than previously expected. This would increase the overall national deficit towards 4.9 percent of GDP, meaning the targeted 4.5 percent could not be maintained. The EU deficit framework of three percent is far out of reach anyway.

Criticism from Mattle

The states have certainly not lost any self-confidence. Mattle, who will personally participate in the talks in Vienna, assumes a "compromise" between the federal government, states, and municipalities: "The federal government will have to accommodate the states and municipalities, the previous offers were not satisfactory," Tyrol's Governor made clear at the same time.

Mattle referred to the presented but yet to be approved Tyrolean double budget 2026/2027, which "for the first time shows no new debts." "From a Tyrolean perspective, I find it easier to agree to a new Stability Pact with a budget course without new debts. However, a viable solution is needed for the municipalities and also the other federal states," said the Governor. "We cannot allow a deterioration at the expense of the states and municipalities," Mattle said towards Vienna.

Upper Austria's Governor Thomas Stelzer (ÖVP) also enters the negotiation round with confidence. It will not fail because of Upper Austria: "We have met the Maastricht criteria - this year and also next year." But the debate must be steered back in the right direction. States and municipalities are not the main drivers of national debt; that remains the federal government. At the same time, states and municipalities are the level facing areas with massively increasing expenditures.

Novak: "Pressure Increased"

The Vienna City Councillor for Finance, Barbara Novak (SPÖ), expressed optimism before the meeting. She was convinced that a solution would be reached where the financing would follow the service, she stated to the APA. "The states are taking on more and more cost-intensive tasks year after year, which has also increased the pressure on the respective budgets. Therefore, a stability pact that recognizes and fairly represents the actual services of the states and municipalities is all the more important." The federal government, states, and municipalities could only create the financial framework conditions together to secure public services, she stated.

The chair among the state finance councillors is currently held by Styria. Their finance chief, Ehrenhöfer, was reserved in response to an APA inquiry. There would be no separate demands from Styria, but rather from all the states collectively. These are still being coordinated and would not be communicated to the federal government in advance through the media.

From the municipalities' side, the President of the Association of Municipalities, Johannes Pressl, was "hopeful," even though the negotiations were tough. He maintained that the municipalities could achieve a net-zero new debt according to Maastricht criteria by 2030. Until then, however, a strengthening of the revenue side is needed, Pressl reminded of demands regarding property tax, access to the 13th and 14th pensions for care financing, or CO2 taxation.

Stability Pact Regulates Debt Possibilities

Invited to the Ministry of Finance are the representatives of all nine federal states as well as the municipalities and cities. The stability pact regulates the debt possibilities of the territorial authorities and must actually be submitted to the EU by the end of the year. Recently, however, the positions between the federal government and the states were still far apart.

(APA/Red)

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