Austria’s EU contributions are exploding – Vilimsky sounds the alarm!

Austria’s EU contributions are exploding – Vilimsky sounds the alarm!

Austria faces significant adjustments to its payments to the European Union in the coming years. According to information from ots.at The Austrian contribution to the EU is expected to increase from the current 2.9 billion euros to 4.4 billion euros in 2027. This corresponds to an increase of over 50 percent.

Harald Vilimsky, the head of the liberal delegation in the European Parliament, expressed outrage at this increase in payments. He sees the EU and the Austrian federal government as a “financial restructuring case” and warns of growing discontent among the population. According to Vilimsky, billions flow to Brussels every year, while essential domestic services such as care, education, security and support for families and businesses are missing.

Not only payments but also savings required

Finance Minister Magnus Brunner (ÖVP) has announced that austerity measures are necessary for all Austrians. This contrasts with the increasing payments to the EU. Austria's debt ratio is currently just under 80 percent of gross domestic product (GDP). A budget deficit of 3.5 to 3.7 percent of GDP is forecast for 2023. A similar situation is also expected for 2024, which significantly increases the challenges for the incoming government. Kurier.at reports that the EU Commission is expected to impose an austerity path in the summer of 2025 to combat high national debt.

There is a risk of theoretical fines if Austria does not comply with EU fiscal rules. Economist Dénes Kucsera calls for a review of spending instead of tax increases. In 2023, Austria will have a state quota of 52.1 percent, the fifth highest in the EU. This year the state will have to contribute almost 30 billion euros to the pension system, a situation that Kucsera considers worrying.

The role of the EU budget in Austrian financial management

Austria's financial challenges are also highlighted by the contributions to the EU budget and the returns from this budget. According to the report by the Federal Ministry of Finance, Austria's contributions to the EU budget and the returns are recorded in the federal budget. Austria's average net position from 2021 to 2023 shows an indication of the country's role as a net contributor, with an average net balance of -0.29 percent of gross national income. The 2024 federal budget shows an Austrian EU contribution of 3.1 billion euros, while returns of 3.3 billion euros are expected. BMF.gv.at highlights that returns from programs such as the Common Agricultural Policy are particularly important.

In summary, it can be said that the upcoming increases in payments to the EU and the necessary savings at home represent a difficult situation for Austria. While the population is critical of the growing financial burden, it remains to be seen how the government will respond to the fiscal challenges in order to both comply with EU regulations and ensure the quality of life in its own country.