Austria in the EU deficit procedure: consequences and challenges for the state
Austria in the EU deficit procedure: consequences and challenges for the state
Brüssel, Belgien - in Brussels was decided today to initiate a deficit procedure against Austria. The decision of the EU, under the leadership of EU chief Ursula von der Leyen, followed the reports of a continued high budget deficit of over 4% in 2024 and 2025. This step is considered necessary to maintain the fiscal disciplines in the euro zone, in particular in view of the Maastricht criteria, which a deficit of a maximum of 3% of the Provide gross domestic products (GDP). 5min reports that a final decision on this procedure is expected on July 8, 2025.
The EU Commission decided to initiate the procedure against the background of a budget deficit of 4.7% of GDP in the past year and projected 4.5% for the current year, which is far above the permitted threshold values. The committee of the EU Minister of Economic Affairs and Finance still has to agree to the recommendation. Puls24 that Austria has to meet a number of additional reporting obligations; In the future, it will report on the progress in budget consolidation every six months.
background and effects of the procedure
Despite the strict guidelines, Austria keeps control of its budget policy, even if the procedure comes into force. Some experts, such as WiFo boss Gabriel Felbermayr and IHS director Holger Bonin, support the procedure so as not to unnecessarily burden the economy. While it is theoretically possible to impose financial sanctions, this has never happened, not even during the first deficit procedure, which was initiated in December 2009 during the financial crisis. At that time, the government managed to reduce the deficit from 5.3% to 1.5% within three years.
The new procedure is a serious challenge for the government, especially since Austria is not alone: in July 2024, procedures, including France and Italy, were also initiated. The focus is on state finances, and solid state finances are crucial for a stability-oriented monetary union, as stated in the Maastricht contract. The Bundesbank describes the central parameters of these financial expenses, which the budget and Regulate fiscal rules in the EU countries.
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| Ort | Brüssel, Belgien |
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