The Ministry of Finance informed the public and the EU about the revised budget forecast for 2025. The deficit is now expected to be around €23 billion, which corresponds to 4.54 percent of GDP (originally: 4.51 percent). Although this means that the deficit target of 4.5 percent of GDP will essentially be met, the figure is still miles above the EU’s maximum requirement of three percent.
Finance Minister Markus Marterbauer (SPÖ) emphasized that the federal government is within expectations at 3.2 percent of GDP. State Secretary for Finance Barbara Eibinger-Miedl (ÖVP) praised the “strict implementation” of the restructuring measures. In contrast, the deficit of the provinces and municipalities, as well as social security, worsened by a total of around 1.84 billion euros to 6.2 billion euros. Marterbauer blamed the municipalities, which were suffering from “financing problems,” for the majority of the worst figures.
The budget dispute: Who is to blame for the deficit?
The latest figures from Statistics Austria, show a deficit of 5.3 percent of GDP for the first half of 2025 (compared to 4.8 percent in the previous year), highlighting the urgent need for consolidation. The main causes of the growth in expenditure are monetary social benefits and wages and salaries in the public sector.
Fiscal Council President Christoph Badelt expressed confidence that the federal budget target was achievable, but warned that higher deficits at the state and local levels could drive up the overall government deficit. Meanwhile, the opposition is calling for urgent reforms. In view of the budget figures, which exceed EU requirements, the FPÖ has called for reforms in health, care, and education, as reported by ORF. The Greens called for a reform of federalism to introduce genuine financial responsibility for local authorities, but also criticized the potential for savings at the federal level, for example, in relation to the Lobau tunnel and climate-damaging subsidies.
With regard to municipal finances, Minister Marterbauer was open to discussing an increase in property tax, but rejected demands for shares of the bank levy and CO2 taxation. The federal government still needs the revenue from the latter to cover the costs of the abolished climate bonus. The high deficits have already had consequences at the European level. In July 2025, an excessive deficit procedure (EDP) was officially initiated against Austria, the third since 1995. Austria must present effective measures to the European Commission by mid-October to comply with the correction path, for which consolidation measures amounting to €6.4 billion in 2025 and €8.7 billion in 2026 have already been decided.
Restructuring plans fail: bankruptcy in the construction and automotive industries
Parallel to the tense budget situation, the situation in the Austrian economy is coming to a head dramatically. According to ORF reports, restructuring efforts at property developer Süba AG, owned by real estate investor Klemens Hallmann, have finally failed. The core company of the “SÜBA Immobilien Gruppe” must now be declared bankrupt after the agreed first installment of five percent of the restructuring plan could not be paid by the end of September.
Insolvency proceedings had already been opened in April 2025. According to KSV1870, liabilities amount to around €226 million. This affects 95 creditors and 10 employees. Experts expect the proceedings to take a long time and do not rule out the possibility that subsidiaries will also slide into insolvency. The main reasons cited for the bankruptcy were increased interest rates and inflation, higher construction costs, and stricter regulatory requirements. The wave of bankruptcies also affects the investor himself. In August 2025, Klemens Hallmann filed for debt settlement proceedings (personal bankruptcy). Claims of around €95 million were filed against him, and he offered a quota of 30 percent. However, according to the company, Hallmann Holding International Investment GmbH, to which Süba AG belongs, is not insolvent.
The automotive supply industry is also severely affected, as reported by ORF. Four companies of the Höhrhan Group have applied to the Krems Regional Court for restructuring proceedings under their own administration. Total liabilities amount to €29 million. A total of 174 employees and 400 creditors are affected. The causes of insolvency cited include, in particular, declines in sales due to the poor economic situation in the automotive industry and massive cost increases. The companies, including Robust Industry GmbH, Robust Plastics GmbH, AKG Plastics GmbH, and HT Electronic Systems GmbH, are seeking to continue operations and are offering creditors a restructuring plan with a 30 percent quota. According to reports, some employees’ wages and salaries have been outstanding since August.