Budget hole worth billions

Where the “Zuckerl coalition” would make savings

The "Zuckerl coalition", if it comes into being, will start the legislative period with an austerity package.

(Bild: APA/Tobias Steinmaurer)

Austria is in recession for the second year in a row. This economic downturn and the rampant spending of the turquoise-green government will result in an austerity package in the coming government term. The "Krone" has taken a look at what will fall victim to the austerity measures.

The budget shortfall of at least 16.5 billion euros this year alone and the difficult economic situation are also major topics in Federal President Alexander Van der Bellen's talks with the party leaders.

This was confirmed by pink frontwoman Beate Meinl-Reisinger after her visit to the Hofburg on Tuesday. The NEOS were the only party to say during the election campaign that an austerity package would be needed after the election. They are sticking to this position. Meinl-Reisinger believes that all parties have a responsibility here, as a two-thirds majority in parliament is needed for many of the reforms she believes are necessary.

Pink Party puts together 20 billion savings package
The NEOS would enter a possible "sweetener coalition" with the ÖVP and SPÖ with an already completed 20 billion euro savings package. Five billion is to be saved in subsidies, 2.5 billion in federalism and administration, 4.5 billion in the pension system, 3.5 billion in health administration, a further 3.5 billion by means of a "debt and expenditure brake" and one billion in interest rates.

Meinl-Reisinger spoke with the Federal President about the economic situation.

(Bild: APA/Roland Schlager)

We will have to make savings everywhere, says Fiscal Council President Christoph Badelt in an interview with the "Krone" newspaper. "We will have no choice but to go through all expenditure categories in detail and look at each one to see where savings can be made." It is important that the economy is not damaged in the process. The climate bonus and climate-damaging subsidies such as the diesel and company car privilege are mentioned as possible areas to be cut. This will have to be negotiated in the next government. 

"Must clean up the turquoise-green mess"
Regardless of the constellation, this will definitely start with a cash audit. "That will be the first step. The second step will be how to get out of this crisis. The third step will be to think about how we can clean up the mess caused by the Turquoise-Greens," SPÖ finance spokesperson Jan Krainer told "Krone".

The outgoing government had led the country into a crisis with its "whatever the cost" approach. Whenever no agreement could be reached, the problems were covered up with money - the counter-financing was pushed to one side. "It's actually like a bad movie. There has never been such dishonesty before. Quite the opposite. Budgeting is usually very conservative," says Krainer.

Christoph Badelt doesn't believe any of the government's figures.

(Bild: APA/ROLAND SCHLAGER)

Despite all the experts' warnings, the Turquoise-Greens have set the deficit too low and have now had to revise it upwards from 2.9 to 3.3 percent of GDP. But even this figure will be impossible to maintain, predicts Badelt. "It was very important to them that they could say it would remain below 3 percent (Maastricht limit, note). That was already untenable back then. And now it is definitely not sustainable." He does not know whether it will be minus four percent next year, but in any case "beyond 3.5 percent, to put it that way", said Badelt.