Austria's financial crisis: 14.6 billion savings required by 2029!

Austria's financial crisis: 14.6 billion savings required by 2029!

The Austrian federal government is planning comprehensive savings of 14.6 billion euros by 2029 to consolidate state finances. According to information from Krone , however, only 8.4 billion euros of these savings have so far been classified as reasonably fixed. This discrepancy is the focus of the fiscal council's warnings, which draws attention to an impending gap of 6.2 billion euros.

Most of the announced austerity measures remain unconce. The countries are encouraged to make a contribution from one percentage point of gross domestic product (GDP), which corresponds to around five billion euros. However, this requirement requires difficult negotiations because many measures have not yet been implemented into reality. In addition, short -term measures such as the suspension of the inflation adjustment of the family allowance could soon expire.

budget deficit and public debt

For the current year, the government expects savings of 6.4 billion euros, while the fiscal council only considers 4.6 billion euros to be realistic. This results in a difference of 1.8 billion euros between the government's expectations and the real opportunities. The budget deficit is expected to remain over four percent of the economic output, which questions the achievement of the EU limit of three percent by 2028. In order to meet this requirement, additional savings of 8.4 billion euros would be necessary.

The state debt rate is forecast to increase from 84 percent to over 91 percent of GDP. Even the interest payments for debts will increase from 1.5 percent to 2.4 percent of GDP. This could also put a strain on the budget and endanger Austria's credit rating on the capital markets.

criticism and reform needs

The fiscal council president Christoph Badelt warns of economically hard years and demands basic reforms, especially in the area of ​​federalism and pensions. He supports the increase in the statutory retirement age, a measure that has been discussed for years but has not yet been tackled. The predicament is due to expensive years of crisis and a high output dynamic in the area of ​​care, health and pensions.

The first savings package of the coalition of VP, SP and NEOS is considered not sufficient; Further measures are necessary to bring the budget into the solder. The fiscal council also recommends increasing cooperation between the federal government, the states and the municipalities in order to achieve the necessary reforms and to create scope for economic and climate-friendly measures. At the end of April 2025, the federal balance is a deficit of 12.4 billion euros, which underlines the urgency of the situation.

The first steps to renovate state finances will be initiated with the double budgets for 2025 and 2026 and the federal financial framework by 2029. The forecasts show that without further renovation measures the deficit in 2025 would be 5.8 percent and in 2026 5.9 percent of GDP. The Federal Government's Strate-Gian plans aim to reduce the Maastricht deficit limit to 2.98 percent of GDP by 2028, an ambitious goal that is assessed with the current budget plan as unreachable, Kurier Fest.