Brussels (APA) – The EU Commission is set to acknowledge Austria’s progress in the ongoing deficit procedure, despite anticipated increases in budget deficits from federal states. On Tuesday, the Commission will unveil the autumn segment of its European Semester package, offering economic policy recommendations to EU member states in Strasbourg. Information from the Commission indicates that Austria is “on track,” although forecasts predict a persistently deep budget gap.
Vienna has submitted its measures to address the deficit to Brussels promptly by October 15. On Tuesday, no new assessment of Austria is expected from the Commission, as it has already provided the required plans and figures for 2025 and 2026 under the dual budget. Currently, no further demands from Brussels are anticipated until the release of the spring package in May or June 2026, despite the unexpected figures from the federal states, according to the EU Commission.
Finance Minister acknowledges rising state deficits
Austrian Finance Minister Markus Marterbauer (SPÖ) recently confirmed that the total new debt of Austria’s federal states will be “significantly higher than previously anticipated,” based on information he received from the federal states. Marterbauer is now awaiting “detailed information.”
It has been known for several weeks that deficits, particularly in eastern federal states like Vienna, are exceeding set limits. The overall national deficit could increase to around 4.9 percent instead of the targeted 4.5 percent of GDP. Marterbauer emphasized that federal states and municipalities need to “make significantly more effort.” The stability pact, which governs local authorities’ borrowing capabilities, must be submitted to the EU by year-end and is currently under negotiation.
EU economic forecast predicts high deficit levels
The latest EU autumn economic forecast also foresees poor outcomes: the deficit is expected to surpass the permissible 3.0 percent of economic output, reaching 4.4 percent this year. Next year, it is projected to slightly decrease to 4.1 percent, but a rise to 4.3 percent is anticipated for the following year (EU average this year: 3.3 percent). Austria is not alone in facing these deficit challenges, as Germany, Belgium, Estonia, France, Slovakia, Finland, Hungary, Poland, and Romania are also expected to miss the 3 percent Maastricht threshold by 2026.
The initiation of the deficit procedure stemmed from Austria’s budget deficit of 4.7 percent of GDP last year and the planned 4.5 percent this year, significantly above the permitted limit of three percent according to EU Maastricht criteria. The EU Commission identified an excessive deficit for Austria in its spring package for the European Semester in early June and recommended a procedure that was approved by the Council of Finance Ministers in July. Austria aims to exit the deficit procedure by the end of 2028. (24.11.2025)
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