24 billion missing

Which goodies could now be abolished

According to the Ministry of Finance, sweeteners such as educational leave are on the brink.

(Bild: Markus Wenzel)

There has been speculation for a long time, but now it is certain: Austria has to plug a billion euro hole in its budget. Various sweeteners for the population are now to fall victim to the huge deficit as filler.

According to the data submitted by the EU Commission on Sunday, Austria will have to make savings of between 18 and 24 billion. Finance Minister Gunter Mayr cites the abolition of the climate bonus and educational leave as examples of possible measures.

During the coalition talks with the SPÖ and NEOS, the ÖVP in particular had insisted on waiting for the figures from Brussels before committing to the exact savings framework. Now there should at least be clarity regarding this data, which is probably necessary in view of the meeting of the steering groups on Tuesday.

How much Austria has to save now
For the four-year reference path without the EU deficit procedure, there is a total consolidation requirement of 24.1 billion euros, whereby around six billion would have to be saved each year. With the seven-year reference path, the consolidation requirement until the end of the term is 18.1 billion. If we now take the next five years, i.e. the period of the legislative period that has just started, we would arrive at exactly 14 billion.

That would be ten billion less during the next government than the four-year path. The exception is the first year of consolidation: in both variants, 6.3 billion would have to be saved in 2025.

While the SPÖ recently considered taking on a deficit procedure because this would make the savings less severe, Mayr wants to avoid it. The Finance Minister said in a press release that the seven-year path would allow more financial leeway for measures other than pure budget consolidation. This would make it easier to stimulate the economy, for example.

Will sweeteners be cut?
Mayr has also identified potential savings: The abolition of the climate bonus would reduce annual expenditure by around two billion euros. Abolishing educational leave could save around 650 million euros, and lowering the funding rate to the EU average would even lead to savings of around three billion euros.

The further roadmap: A package of measures agreed by the government negotiators can be submitted to the European Commission by mid-January, outlining a reduction in the budget deficit to below three percent in 2025. If these measures are plausible for the European Commission, it can refrain from initiating an EU deficit procedure against Austria.

If such an EU deficit procedure were to be initiated against Austria, a choice could also be made between a four-year or a seven-year reference path. It is noticeable that the four-year EU variant would require lower savings (EUR 14.8 billion by 2028) than the variant without an EU deficit procedure (EUR 24.1 billion by 2028). This numbers game is reversed for the seven-year path. Here, the variant without the EU deficit procedure would require around 300 million euros less in savings.