EU deficit procedure: How the Austrians really think about it!

EU deficit procedure: How the Austrians really think about it!

On March 28, 2025, the MTV program “Aktuell: Die Woche” with presenter Meinrad Knapp, political consultant Thomas Hofer and pollster Peter Hajek will present a survey on the attitude of the Austrian population towards a possible EU deficit procedure. The survey, which was carried out from March 24th to 27th and included 500 Austrians eligible to vote, shows that the population is largely indifferent to the issue. According to the results of the survey OTS 20% of respondents welcome an EU deficit procedure, while 28% reject it. In addition, 24% do not think the topic is important, and 28% either do not know or do not provide any information.

The support and rejection of the deficit procedure is particularly visible depending on the group of voters. 36% of Green voters show support for a possible procedure, while only 30% of ÖVP and SPÖ voters do so. On the other hand, 43% of FPÖ voters reject a deficit procedure, which indicates concerns about possible paternalism by the EU.

Avoiding the excessive deficit procedure

Austria successfully averted the EU deficit procedure after a meeting between Finance Minister Gunter Mayr and EU Commissioner Valdis Dombrovskis. Feedback from the European Commission confirmed that the measures presented by Austria can reduce the deficit to below 3% in 2025. How BMF reported, Austria's budget policy sovereignty could be preserved. This means that Austria is not audited every six months by the European Central Bank and the European Commission.

Averting the deficit procedure has positive financial consequences for Austria, including lower interest costs on the financial markets, which makes it easier to take out loans at more favorable conditions. These developments are particularly relevant as Fitch had worsened the outlook for Austria due to the threat of an excessive deficit procedure. However, by averting the proceedings, Austria has the opportunity to continue to do business under advantageous conditions.

Fiscal policy challenge

However, Austria continues to struggle with the challenge of meeting the Maastricht criteria set out in the Stability and Growth Pact (SGP). The SGP, concluded in 1997 and reformed in 2023, stipulates that the budget deficit cannot exceed 3% of gross domestic product (GDP). Current data shows that Austria expects new debt of 3.7% in 2024 and 4.1% in 2025, with the debt ratio at around 80% express.

The next government will have the task of reviewing the specific measures to implement the adopted package of measures and ensuring that Austria submits a budget plan by the end of the year. A decision on a possible deficit procedure will not be made until January at the earliest at a meeting of economics and finance ministers and it is clear that without deficit procedures the consolidation requirement could be over 20 billion euros.

The coalition negotiations between ÖVP, SPÖ and NEOS demonstrate that the issue of deficit procedures also plays an important role in Austria's political agenda. Agreement on savings and measures is crucial to mastering the financial policy challenges and thus strengthening the country's budgetary ability to act.