Austria recorded a budget deficit of 4.7 percent of gross domestic product (GDP) last year and is planning for 4.5 percent this year, both of which are well above the permitted limit of three percent. With this procedure, Austria joins a list of EU countries that are also subject to deficit procedures, including Belgium, France, Hungary, Italy, Malta, Poland, Slovakia, and Romania.
At the same time, the EU Commission gave a positive assessment of Austria’s budget plan (“fiscal structure plan”). This plan is intended to show the way out of the procedure. Austria has been given until October 15, 2025, to present the necessary measures to reduce its deficit. After that, the country must report on its progress at least every six months until the excessive deficit has been corrected, to be eliminated by 2028.
Finance Minister Markus Marterbauer (SPÖ) expressed confidence in a statement: “The recommendations presented by the EU Commission on Austria’s fiscal structure plan are in line with expectations and at the same time show that we have taken the right measures.” He emphasized that both the fiscal structure plan reported to Brussels on May 13 and the recently adopted double budget are in line with EU rules.
Marterbauer said he was “absolutely fearless” about the deficit procedure and expects it to begin on July 8. He considers the budget plan credible and points to the slight decline in interest rate spreads on Austrian government bonds compared to German bonds. However, in order to achieve the ambitious target of a three percent deficit by 2028, further course corrections and the maintenance of the consolidation course are necessary. The Federal Ministry of Finance forecasts a deficit of 4.5% of GDP for 2025 and expects it to be reduced to just under 3.0% of GDP by 2028.
Consolidation measures already taken include adjustments in the areas of healthcare, pensions, education, labor, and taxes. In its June 2025 report, the Fiscal Council confirms that the consolidation plans outlined in the government’s strategy report for 2025 (€6.4 billion) and 2026 (€8.7 billion) aim to reduce the deficit below the 3% Maastricht limit. However, the Fiscal Council expects the debt ratio to rise to 91.1% of GDP by 2029, from 84.6% in 2025 and recommends additional consolidation measures to ensure long-term financial sustainability.