EU Commission recommends excessive deficit procedure: Is Austria on the brink?

EU Commission recommends excessive deficit procedure: Is Austria on the brink?

In Brussels, the European Commission recommended the initiation of an EU deficit procedure against Austria. This decision will now be submitted to the Council of Economic and Finance Ministers, which is expected to vote on it in Brussels on July 8th. The commission noted that Austria's budget deficit was 4.7 percent of gross domestic product (GDP) last year and is estimated at 4.5 percent this year, exceeding the permitted limit of 3 percent under the Maastricht criteria.

As part of its spring package, the EU Commission identified an excessive deficit for Austria. However, the Austrian fiscal structure plan, which was transmitted to Brussels on May 13, 2025, received a positive assessment. This plan is intended to show the way out of the excessive deficit procedure and complies with EU rules.

Fiscal structure plan as a solution approach

The fiscal structure plan aims to reduce the spending deficit to below 3 percent by 2028. The EU Commission considers this goal to be realistic. The measures taken so far are intended to affect various areas, including healthcare, pensions, education, labor and taxes. Austria has until October 15, 2025 to submit further necessary measures and thus meet the EU requirements. Finance Minister Markus Marterbauer (SPÖ) expressed optimism and emphasized that the EU Commission's recommendations correspond to expectations and that the right measures have been taken.

As part of the reformed Growth and Stability Pact, the creation of fiscal structure plans has now become necessary. These plans can be considered the only concrete indicators for budgetary surveillance at EU level. According to EU debt rules, debt should not exceed 60 percent of GDP and the annual budget deficit cannot be higher than 3 percent. However, for countries that do not meet these criteria, there is more flexibility in achieving financial goals.

Summary and outlook

The next steps in this process depend on the approval of the Council of Economic and Finance Ministers. They must finally confirm the Commission's recommendations before the excessive deficit procedure is officially initiated. The outcome of this decision is crucial for Austria's financial stability and the EU's further course in terms of budgetary discipline.

The discussion about the budget and the necessary measures to comply with EU requirements will continue to be the focus, especially with a view to the upcoming deadlines and the necessary adjustment period.

Further information on this topic can be found in the reports from the standard and Small newspaper.