EU demands deficit alarm: Austria threatens strict financial controls!

EU demands deficit alarm: Austria threatens strict financial controls!

Österreich, Land - The EU Commission officially recommended a deficit procedure against the Austrian Republic on June 24, 2025. The country recorded a budget deficit of 4.7 percent of gross domestic product (GDP) last year and is planning a similar deficit of 4.5 percent for the current year. These values ​​exceed the upper limit of 3 percent of GDP specified in the Maastricht contract. According to Kleine Zeitung this is the reason for the procedure that was determined in spring 2023.

Austria will receive the deadline until October 15, 2025 to provide measures to correct the deficit. Finance Minister Markus Marterbauer (SPÖ) confidently commented on the recommendations of the EU Commission and explained that the measures taken met expectations. Reforms in areas such as healthcare, pensions, education, work and taxes have already been implemented. The fiscal structure plan, which was sent to Brussels on May 13, 2025, is a central component of these efforts.

measures for budget correction

The fiscal structure plan aims to reduce the deficit to less than 3 percent of GDP by 2028. This requirement has always been considered part of the Maastricht criteria, which also state that state debt must not be over 60 percent of GDP. According to The market the decision will finally be presented to the Council of Economic and Finance Minister, who meets on July 8 in Brussels.

As part of the EU debt rules, the Member States must regularly report their data on the budget situation. For Austria, it will be necessary to report on progress in debt reduction at least every six months until the deficit is fixed. These obligations are part of an improved growth and stability pact that introduces new flexibility when achieving financial goals.

The fiscal background

The Maastricht criteria, which according to Bundesbank Budget deficit may be a maximum of 3 percent of the GDP, and the debt of the states should not exceed 60 percent of GDP. An excessive deficit arises when the expenditure is significantly exceeding the income.

In the case of Austria, the EU Commission has therefore classified the deficit as excessive and stimulated the initiation of a formal procedure. It remains to be seen how the Austrian government reacts to these challenges and which specific measures are implemented to comply with the EU rules.