Austria’s right-wing Freedom Party and the conservative People’s Party have finalized a budget agreement following three days of coalition negotiations. The move aims to align the country’s fiscal policy with European Union regulations and avoid triggering the excessive deficit procedure by Brussels.
The coalition’s primary focus was reducing Austria’s budget deficit, which is projected to hit 4.2% of GDP in 2024 and 3.7% in 2025 without intervention. This exceeds the EU’s deficit limit of 3% of GDP.
“We made a fundamental decision and developed a joint roadmap to prevent the EU’s excessive deficit procedure against Austria,” stated Herbert Kickl, leader of the right-wing Freedom Party.
To address the issue, the Freedom Party and the People’s Party have agreed on measures aimed at saving approximately €6.3 billion this year, equating to 1.7% of GDP. A significant portion of these savings, €3.2 billion, will come from cutting subsidies. Additionally, tax system adjustments are expected to contribute €920 million in savings.
While the full details are still being refined, both parties emphasized their commitment to transparency and pledged to share the finalized figures with the public soon. Meanwhile, Acting Finance Minister Gunter Mayr will update the European Commission on the budget agreement.
