Carinthia halves its deficit: successful austerity measures or propaganda?

Carinthia halves its deficit: successful austerity measures or propaganda?

The Carinthian state government has made significant progress in budget management in recent months. Loud Click Carinthia The budget expenditure was halved from almost 500 million euros to around 250 million euros. SPÖ finance spokesman Günter Leikam noted that savings and adjustments are showing initial positive effects, even though the opposition sharply criticized the measures implemented.

Compared to other federal states, Carinthia is doing relatively well: While Styria is expecting a deficit of almost a billion euros and Salzburg is expecting a deficit of half a billion euros, Carinthia is pursuing a stronger course of budget discipline. However, the debt burden is high and, according to a report, exceeds the Small newspaper the four billion euro mark again, despite new debt of 252 million euros recorded for 2024.

Debt burden background

The current debt development has its roots in the past, when debt rose under the FPÖ financial leadership from around one billion euros in 2002 to over three billion euros in 2012. In the last ten years, however, Carinthia has achieved five budget surpluses and has reduced the hypo disaster, which was burdened with 24 billion euros in liabilities, to less than two million euros.

Despite the tense economic situation, in which economic growth is at -1.2 percent and inflation is at 2.9 percent, the country continues to invest in construction projects, residential construction and renovations. Finance officer Gaby Schaunig emphasized that increasing expenses, especially for health, care and personnel, are part of the financial challenges.

Political measures and future outlook

Carinthia's politics focus primarily on financial relief for people with low incomes. The housing allowance was doubled and the kindergarten, which does not pay any parental contributions, remains. Leikam emphasizes the balance between reducing spending and supporting the population as central. At the same time, there are warnings that construction prices are delaying projects, but work is still being done with foresight for future generations.

Carinthia's efficiency and stability is also confirmed by the best rating in the state's history (Aa2), which indicates a positive development. This economic context is particularly relevant as the Fiscal Council's reports on public finances show that large budget deficits are expected in the coming years due to economic policies without counter-financing. The Forecasts of the Fiscal Council indicate that significant consolidation efforts are required to ensure compliance with EU-wide fiscal rules.