Austria threatens EU deficit proceedings: finance minister remains calm!

Austria threatens EU deficit proceedings: finance minister remains calm!

The EU's financial Situation is the focus of the EU because the industry fears that a deficit procedure against the country will be initiated. According to Kosmo , an official recommendation from the EU Commission is expected for Wednesday. The approval of the Council of the Minister of Economics and Finance is needed for June 20 or July 8th to start the procedure.

Austria's budget deficit last year was 4.7 percent of gross domestic product (GDP) and will continue to be estimated at 4.5 percent for the current year. This is far above the Maastricht limit of 3 percent, which was determined in the Maastricht contract. These rules ensure solid state finances for a stability -oriented monetary union and stipulate that the maximum deficit value may not be exceeded.

reactions to the deficit situation

Finance Minister Markus Marterbauer is calm about the impending deficit procedure. In the case of parliamentary budget hearing, however, significant voices were loud, which pointed out the need for profound structural reforms, especially in federalism and pension system. Christoph Badelt, the chairman of the fiscal council, emphasized that the current savings package only closes the most urgent financial gaps and estimated that around six billion euros in savings were still necessary to comply with the Maastricht criteria.

Margit Schratzenstaller from the WIFO was skeptical and warned of too great optimism with regard to the measures taken. Monika Köppl-Turyna from Eco-Austria called for a pension reform and an increase in the age of retirement age as part of the consolidation measures. The FPÖ expert Martin Gundinger also predicted a deterioration in the budgetary situation until the end of the legislative period. On the other hand, Georg Feigl from the SPÖ welcomed the initiative for budget consolidation.

EU rules and the way to stability

The Maastricht criteria, under which EU member states have aligned their housekeeping practices, not only determine the deficit limit, but also a maximum debt level of 60 percent of GDP. A continuous deficit can lead to serious economic consequences and endanger the financial stability of a country. The negative financing balance arises when the expenses exceed the income, which is the case in Austria.

In accordance with the regulations, the Member States must transmit data on deficit and debt to the European Commission every six months if the deficit is excessively deficit. This information is checked and published by Eurostat, the EU's statistical authority, to ensure transparency and traceability. In Germany, for example, the Federal Statistical Office is investigating the deficit data, while the Bundesbank is responsible for the debt of the debt, such as "https://www.bundesbank.de/de/statistiken/oefliche-finance/maast-defizit-und-und-defizit-und-defizit-und-Baldenstand-73068"> Bundesbank reported.