Austria's household in danger: Saving is the new New Year's resolution!

Austria's household in danger: Saving is the new New Year's resolution!

Austria's state finances are on the brink: In the new year, the government is faced with an alarming deficit of up to 25 billion euros. Despite the optimistic New Year's resolutions, it quickly becomes clear that saving is on the agenda. As a result, the Budgetloch means that a savings amount of around 18 billion euros must be saved within the next seven years, according to the coalition negotiations between the ÖVP, SPÖ and NEOS, such as reported. In the first year, the amount that must be pressed could be between 3 and 6 billion euros depending on the outcome of a potential EU deficit procedure. While the SPÖ pleads for a slower procedure, ÖVP and NEOS want to enforce a more strict austerity policy.

The dramatic situation is still exacerbated by the threat of EU deficit procedure, since the creation has violated the Maastricht criteria. The EU requires Austria to deposit up to 0.5 percent of gross domestic product as a security deposit, which could cost 2.5 billion euros if the consolidation plan is not presented in time, such as March in detail. The irresponsible handling of finances in the past, especially during corona pandemic, has led to this financial emergency. Politicians see the high debt burden and the increasing socio -economic costs as a turning point at which rigoros must now be countered to reduce government spending.

The new government is now required not only to make savings, but also to consider increasing taxes in order to expand the financial scope. The path to a solid financial policy is rocky, and the challenges that affect the foreign minister and the coalition as a whole are enormous. Austria has lived through its standards, and now a plan has to be implemented to get the state finances back on course.