Alarm for Austria: EU plans austerity measures because of a huge budget deficit!
Alarm for Austria: EU plans austerity measures because of a huge budget deficit!
Vienna, Österreich - The EU Commission has raised the alarm: a deficit procedure against Austria is considered. According to vienna.at exceeds Austria's budget deficit significant. These rules stipulate that the annual budget deficit may be a maximum of 3 % of the gross domestic product (GDP).
The financial challenges result from the enormous costs caused by the corona and energy crisis. In the coming months it will be crucial how Austria reacts to these challenges. A deficit procedure is a multi-stage process that includes the EU Commission submits suggestions and recommendations to reduce the deficit. Austria is now under pressure to explain how it wants to reduce its deficit, whereby the EU continuously monitors progress.
strict requirements of the EU
The EU Commission will make specific requirements for the required austerity course, which could significantly restrict the scope for action of the Austrian government. Necessary measures to reduce deficit will probably require unpopular decisions to reduce expenses or increase income.
financial perspectives and consolidation needs
For Austria, a consolidation requirement of 2.6 billion euros has already been determined for 2025, which could increase to 9.9 billion euros by 2028. This requires additional savings of an average of 2.5 billion euros annually. This adaptation period could be extended to seven years when implementing a reform and investment package, which would reduce the need for consolidation to 1.5 billion euros for 2025.
In addition, the first fiscal structure plans must be presented by September 20, 2024. These plans should address the specific challenges in front of which Austria is facing and take into account the EU priorities. The recommended measures include the stabilization of the debt rate and the improvement of energy supply security in order to reduce any emissions in the traffic sector.
The politically explosive situation is also fueled by the new elections of the National Council on September 29, 2024, since the next government is required to create a first fiscal structure plan. It remains to be seen how the government will react to the urgent financial challenges that are specified by the EU.
For deeper information on compliance with the EU fiscal rules and their effects on the Member States, a visit to the Eurostat page is recommended: DetailsOrt Vienna, Österreich Quellen
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