Procedure excessive deficit wants the European Commission to move against her Austriathe deficit of which is 4.7%.
The European Commission announced today (4.6.2025) its intention to propose an excessive deficit procedure until the end of the month, and the final decision should be made by the Council of Economy and Finance on July 8. Austria is sinking at the same time in an economic crisis with high inflation, weak consumption and persistent recession.
According to the Commission, Austria, with a 4.7% deficit on its GDP for 2024 and a provision for 4.5 in the current year, significantly exceeds the 3% threshold predicted by Maastricht’s criteria, and will be the only country that will not record at least sluggish growth this year.
“For Austria, the report concludes that the criteria for the deficit are not met,” said EU Commissioner Valdis Dobovskis and spoke of “a clear case of excessive deficit process”, while noting that Vienna has not yet said that 2021. On the other hand, 16 Member States have already requested a certain percentage of their increased defense spending to be excluded from the deficit calculation.
In the same report on Austria, it is also emphasized that debt viability analysis shows “high risks and in the medium term”, as in 2024 the debt ratio to the country’s GDP increased to 81.8% and is expected to reach 84.0% at the end of 2025 and 85.8% at the end of 2026. A medium -term package of budgetary and structural measures lasted by the Austrian government last month.
The next budget plan will be submitted on October 15 and should include further measures to reduce the deficit. The Austrian government has stated that it is aspiring to get out of the excessive deficit process in 2028, with Finance Minister Marcus Markuer declaring that he was “not afraid at all” the procedure, which had even delayed the EU due to the 20th of the EU.
The previous government by the People’s Party (ÖVP) and the Greens had mitigated the impact of the pandemic and war on Ukraine with expensive support measures, and also implemented programmatic commitments for environmental subsidies. The current government, however, from ÖVP, Social Democratic Party (SPö) and the Liberal Neos, had repeatedly raised the possibility of an excessive deficit process.
Experts at the same time dispute Austria’s quick exit prospect from the crisis. At the time of their priority, most appeared pessimistic. Margit Schratsenstalers of the Austrian Institute of Economic Research (WIFO) said the success of the budget “is not certain” and noted that “it is a good time for the reform of the federalist system”. The fiscal consolidation will not be successful with well-known measures, said Monica KEPL-Turina from the Eco-Austria Institute and referred to the consequences of US customs policy. “Many are also based on pious wishes, and urgently need to reform the pension system,” he added.
Institute economist Hajek Martin Goodiger, who belongs to the far -right Freedom Party (FPö), predicted that at the end of the current government service Austria would be in a worse fiscal situation.