Brussels – In its latest meeting before the summer recess, the EU finance ministers have officially decided to initiate a deficit procedure against Austria, following a recommendation from the EU Commission. The Council has also approved Austria’s domestic fiscal structure plan, which outlines reforms and measures to return the budget deficit below the 3 percent threshold.
Austrian Finance Minister Markus Marterbauer (SPÖ) addressed the Council, stating that the necessary actions in the deficit procedure are clear: “The European Commission has requested that we outline how to reduce the excessive deficit, caused by the previous government, in the medium term. We’ve already made key decisions in the National Council with the double budget.” He asserted that Austria is on the right track to reduce the deficit as planned.
The deficit procedure was prompted by Austria’s budget deficit of 4.7 percent of GDP last year, and a projected 4.5 percent this year, both exceeding the EU’s Maastricht criteria limit of three percent. The EU Commission identified an excessive deficit for Austria in its early June evaluation within the European Semester and recommended the procedure.
Austria has until October 15, 2025, to implement necessary measures as outlined in the Council’s recommendation. The country is required to report every six months on its progress, with updates in the spring’s annual progress report and in the autumn’s draft budget plan, until the excessive deficit is rectified. The goal is to eliminate the excessive deficit by 2028.
Budget plans indicate a decrease in the deficit to 4.5 percent of GDP this year and 4.2 percent the following year, with a target to exit the EU deficit procedure by 2028. The consolidation amounts are set at 6.4 billion this year and 8.7 billion next year. Marterbauer expressed confidence in meeting the budget targets and downplayed concerns about Austria’s financial image and market stability, highlighting Austria’s strength as one of Europe’s leading economies.
The FPÖ criticized the ÖVP, holding it accountable for the deficit procedure, accusing them of misleading voters regarding fiscal matters before the National Council elections. FPÖ Secretary General Christian Hafecker stated that the initiation of the deficit procedure represents a breach of the coalition’s central election promise, suggesting it partially undermines Austria’s financial autonomy.
The Industrial Association cautioned against allowing the deficit procedure to be an excuse for delaying essential structural reforms. They emphasized that the government should capitalize on this period to address reforms in administration, education, pensions, and health while implementing effective economic stimulus measures. They warned that failing to act wisely could lead Austria into a prolonged stagnation phase. (14.07.2025)
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