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EU calls for deficit alarm: Austria is threatened with strict financial controls!
The EU Commission recommends deficit proceedings against Austria due to a budget deficit of 4.7% of GDP.
EU calls for deficit alarm: Austria is threatened with strict financial controls!
On June 24, 2025, the EU Commission officially recommended an excessive deficit procedure against the Austrian Republic. The country recorded a budget deficit of 4.7 percent of gross domestic product (GDP) last year and is planning a similar deficit of 4.5 percent for the current year. These values exceed the upper limit of 3 percent of GDP set by the Maastricht Treaty. Loud Small newspaper This is the reason for the procedure initiated, which was established in spring 2023.
Austria has until October 15, 2025 to submit measures to correct the deficit. Finance Minister Markus Marterbauer (SPÖ) expressed confidence about the EU Commission's recommendations and stated that the measures taken correspond to expectations. Reforms have already been implemented in areas such as healthcare, pensions, education, labor and taxes. The fiscal structure plan, sent to Brussels on May 13, 2025, is a central part of this effort.
Budget correction measures
The fiscal structure plan aims to reduce the deficit to less than 3 percent of GDP by 2028. This requirement has always been part of the Maastricht criteria, which also state that government debt must not exceed 60 percent of GDP. Loud The market The decision will be finally submitted to the Council of Economic and Finance Ministers, which will meet in Brussels on July 8th.
Under EU debt rules, member states must report their budget data regularly. For Austria, it will be necessary to report on progress in debt reduction at least every six months until the deficit is eliminated. These commitments are part of an improved Growth and Stability Pact that introduces new flexibilities in achieving financial targets.
The fiscal background
The Maastricht criteria, according to Bundesbank are important for a stability-oriented monetary union, require that the annual budget deficit should not exceed 3 percent of GDP and that the debt of the states should not exceed 60 percent of GDP. An excessive deficit occurs when expenditure significantly exceeds revenue.
In the case of Austria, the EU Commission has therefore classified the deficit as excessive and suggested the initiation of a formal procedure. It remains to be seen how the Austrian government will respond to these challenges and what specific measures will be implemented to comply with EU rules.