EU starts deficit procedures against Austria - what now?

EU starts deficit procedures against Austria - what now?

The EU finance ministers meet in Brussels on Tuesday for a decisive meeting in which the opening of an EU deficit procedure against Austria is on the agenda. This is done on the basis of a recommendation from the EU Commission, which had already found an excessive deficit for Austria in June. Last year the budget deficit was 4.7 percent of GDP, and a deficit of 4.5 percent is planned for this year, which exceeds the permitted limit of 3 percent in accordance with the Maastricht criteria, such as vienna.at reported.

The Austrian finance minister Markus Marterbauer (SPÖ) will take part in the meeting, but has no voting right. He expressed his trust in the achievement of the budget goals and sees no image damage for Austria on the financial markets. Nevertheless, the fiscal structure plan must be finalized, which shows measures to reduce the deficit below 3 percent.

important deadlines and requirements

The Council of Economic and Finance Minister will decide on July 8 on the proposed procedure. By October 15, 2025, Austria has time to present specific measures to correct the deficit. In addition, the country is obliged to report progress at least every six months until the excessive deficit is remedied. The aim is to reduce the deficit by 2028 to less than 3 percent, confirmed Nachrichten.at .

The fiscal structure plan and the double budget meet the EU rules, but further measures are necessary to achieve the budget goal. For the first time, these plans fell under the reformed growth and stability pact, which set specific fiscal rules for the EU member states. One of the Maastricht criteria includes that the annual budget deficit may not be more than 3 percent of GDP, while the debt must not exceed 60 percent of GDP, as the Bundesbank emphasized in their statistics on the public financial situation.

background of financial policy

The current developments illustrate the importance of solid state finances for a stability -oriented monetary union. An excessive deficit can not only burden national households, but also destabilize the entire EU economy. The stability and growth pact complements the rules specified in the Maastricht contract and aims to ensure a uniform fiscal policy among the Member States.

In terms of state debt, only the gross debt is considered, which means that Finanzaktiva is not deducted when calculating. It is important that Austria takes the necessary steps to meet the requirements of the EU and to regain the trust of the markets.