Austria's finance minister warns: there is a risk of a credit rating downgrade!

Austria's finance minister warns: there is a risk of a credit rating downgrade!

Amid Austria's tense financial situation, Finance Minister Marterbauer emphasized transparency in the challenges of budget policy in his recent statement. In April he pointed out that it was impossible to cut 8.7 billion euros in spending within two years while increasing revenue without having a noticeable impact. Against this background, Marterbauer plans to use around 270 million euros to combat fraud next year, with a special task force developing measures on two levels. These include legal adjustments to combat “carousel fraud” in sales tax, as well as increased controls through possible staff redeployments. Over many years, many companies have been clearly under-examined, which signals a clear need for action.

The anti-fraud measures are part of a comprehensive consolidation package that provides for additional revenue of 2.2 billion euros for 2026. Experts of the Fiscal Council rate these goals as ambitious but realistic, provided that the measures implemented are implemented quickly and consistently. However, Marterbauer warns that the downgrade of Austria by rating agencies such as Fitch Ratings, which lowered the long-term rating from “AA+” to “AA” in June, makes it necessary to implement these plans as soon as possible.

Challenges and outlook

A continued rise in national debt could result in further rating adjustments. Marterbauer expressed optimism about possible positive impulses for the domestic economy as a result of a German investment package, the positive effects of which could begin this year and increase next year. However, the finance minister sees little scope for extensive measures to promote the economy at national level, even if a relatively large amount is still being invested as part of the austerity package.

Austria's budget policy is loud Parliament.gv.at in the area of ​​tension between the necessary consolidation and the stabilization of the economy in view of the economic challenges. A consolidation requirement of 6.3 billion euros is expected for 2025, with 3.6 billion euros needed to directly improve the deficit. The consolidations are expected to increase to a total of 18.1 billion euros by 2031.

• Maßnahmen zur Konsolidierung:
• Erhöhung der Stabilitätsabgabe für Banken und der Tabaksteuer.
• Ausweitung der motorbezogenen Versicherungssteuer auf Elektroautos.
• Abschaffung von Umsatzsteuerbefreiungen für Photovoltaikanlagen.

As part of the Budget Restructuring Measures Act 2025 (BSMG 2025) passed on March 7, 2025, a consolidation volume of 1,240 million euros was set for 2025, which will increase to 1,650 million euros by 2026. These measures also include savings in administration and the climate bonus, which are expected to amount to around 2 billion euros annually.

In its recommendations, the Fiscal Council also emphasized that the consolidation steps for 2025 and 2026 must be implemented and supplemented. This includes medium-term consolidation plans with clear measures as well as the implementation of growth-enhancing and climate-friendly programs. The basic budget problem must also be addressed through structural reforms in order to create the necessary scope for future investments.