Austria is faced with financial crisis: savings of 1.1 billion euros planned!

Austria is faced with financial crisis: savings of 1.1 billion euros planned!

Österreich - The financial situation in Austria is assessed as "bitter serious". Neos State Secretary Josef Schellhorn recently emphasized the urgency of a package of measures for budget renovation. It is particularly noteworthy that countries and municipalities should be asked more to the cash register. In order to improve the situation, Schellhorn is planning talks with state representatives about an increased contribution to the consolidation of the budget.

In this context, Schellhorn found that the time for large reforms was ripe. His colleague, the chairman of the Wilfried Haslauer of the ÖVP, has announced longer solutions, but warns against short -term austerity measures that the regions could heavily burden. He emphasizes the decisive role of the countries and municipalities in areas such as education, security, care and infrastructure.

challenges for the budget

The upcoming government faces major challenges in view of a high budget deficit. Austria has to renovate its budget in 2025 to meet EU requirements. Up to three billion euros are missing for this. The Ministry of Finance has corrected the new debt for the current year to 3.3 percent instead of the 2.9 percent previously assumed. This deviation of 0.4 percent corresponds to around two billion euros.

The research institutes WIFO and IHS also expect a high level of debt for 2025. This could restrict the possibility of the government to implement necessary reforms and at the same time maintain general interest. The federal government's net financing requirement was 15.4 billion euros from January 2024, while the withdrawals have risen by 13.1 percent compared to the previous year.

effects on budget development

The development of expenses is influenced by various factors, including rising pension expenses, the new financial equalization and higher personnel expenses. At the same time, the income from sales tax and taxes in the real estate sector are weak. Another worrying trend has been the deterioration in budget development since autumn 2023, which is due to the general deterioration of the economic situation and the extension of crisis measures.

The public debt rate is estimated at 79.3 percent of GDP for 2024, which is due to the higher new debt and less forecast GDP growth. In view of this complex scenario, the government is asked to check both savings and structural reforms to ensure the sustainability of public finances.

The details on the exact division of the planned savings of 1.1 billion euros in the different departments will be presented in the coming days.

For more information on these topics, you can report the reports of Krone , DerStandard and parlament.gv.at consult.