Start of EU Deficit Procedure Against Austria

In addition to the official decision of an EU deficit procedure against Austria, the final approval of the national fiscal structure plan was also decided. This plan outlines the measures and reforms to reduce the budget deficit back below the permissible limit of three percent.

EU Deficit Procedure Against Austria: Remedial Measures Already Passed in the National Council

Austria's Finance Minister Markus Marterbauer (SPÖ) emphasized before the Council on Tuesday that all further actions in the deficit procedure are clear: "We are being asked by the European Commission to present measures on how the excessive deficit, which is a legacy of the last government, can be reduced in the medium term. We have already made the corresponding decisions in the National Council with the double budget." Austria is "on a very good path to reducing the deficit as planned."

The Finance Minister stressed that the budget's remediation is not primarily necessary because of European rules, but "because we cannot afford high deficits economically either. We prefer to spend the money on kindergartens and health and care rather than on high interest payments." And even in a deficit procedure, "all decisions affecting the budget will be made in Austria and not in Brussels," said Marterbauer. He also reiterated that he sees no negative effects on the financial markets and no damage to Austria's image.

The citizens would notice the austerity measures, but that is the "necessary remediation." The deficit procedure will not require additional measures; it accompanies the remediation. The federal government's plan is to come below the three percent threshold by 2028. "Under the current conditions, I also believe that we will achieve this," said the Finance Minister. The slightly better economic forecasts would help with this.

Austria with Deficit Far Above Allowed Three Percent

The reason for the deficit procedure is 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 so-called Maastricht criteria of the EU. The EU Commission had identified an excessive deficit for Austria in its spring package for the so-called European Semester at the beginning of June and announced the recommendation of a procedure.

The FPÖ sees the responsibility for the deficit procedure primarily with the ÖVP, which they once again accused on Tuesday of "deceiving voters" regarding the deficit development before the National Council election. With the deficit procedure, the three-party coalition has broken the first central election promise, said FPÖ General Secretary Christian Hafecker on Tuesday during a press conference. "Of course, this is a process that also partially disempowers Austria, at least as far as financial conduct is concerned," countered Hafenecker to the contrary assurances of the Finance Minister.

(APA/Red)

This article has been automatically translated, read the original article here.