Delicate budget situation

Coalition: Biggest problem is now even bigger

They still have a long way to go: Andreas Andreas Babler (SPÖ), Christian Stocker (ÖVP) and Beate Meinl-Reisinger (NEOS)

(Bild: APA/Alex Halada)

ÖVP, SPÖ and NEOS are already working on the government program. They want to be finished by Tuesday evening. It will be presented to the public on Wednesday or Thursday. However, the Zuckerl coalition still faces many challenges - and the biggest one is now likely to grow. It's about the budget and making savings.

In the past five months since the election, the economic situation has deteriorated further. There are fewer tax revenues and insurance premiums. The planned savings of 6.4 billion for 2025 will most likely not be enough.

According to information from Krone, the hole is around two billion larger. There is a threat of an EU deficit procedure - which the ÖVP wanted to avoid in its (ultimately failed) plans with the FPÖ.

An EU deficit procedure is becoming increasingly likely
The next EU economic forecasts will not be published until May, but it is already becoming apparent that the situation has worsened, says Christoph Badelt, President of the Fiscal Council, to the "Krone" newspaper. It is quite possible that Austria could end up in an excessive deficit procedure - but that would not be a catastrophe, the economist emphasizes.

Badelt had already made gloomy predictions before the elections at the end of September - which the ÖVP-Green government at the time did not want to admit.

Already warned before the elections: Christoph Badelt, President of the Fiscal Council

(Bild: APA/Roland Schlager)

However, the planned savings only serve to achieve the Maastricht deficit limit of three percent. This means that debts will continue to be incurred and not a single cent has yet been spent on any other measures, for example to boost the urgently needed economy. This is on top of the eight billion. So there will be no getting around additional, significant tax revenue.

Deficit now stands at 19 billion
Austria currently has a deficit of 19.1 billion euros. This corresponds to a Maastricht deficit of around 3.9 percent. According to Finance Minister Gunter Mayr, the contributions of the federal states and municipalities are developing particularly badly. These account for 5.7 billion and 1.1 percent of the deficit respectively.

The negotiators are being tight-lipped. They want to wrap up the "sweetener" as quickly as possible. The NEOS dropped out of the initial negotiations because they felt that the ÖVP and SPÖ were not eager enough to reform, particularly in the financial area. Now they will go through with it.

According to information from Krone, they want to go down the path of emergency restructuring - the EU will decide at the end of June whether this is enough. If not, the Pinks want new negotiations on restructuring.