Budget announcement - We need to save for longer than expected
The Austrian government faces a longer and more difficult path to achieving financial stability than expected, according to Christoph Badelt, head of the Fiscal Council. Despite the strict austerity measures implemented by the government, the budget deficit continues to rise, reaching 23 billion euros — one billion euros more than planned in the current bipartisan budget between the turquoise-red-pink parties.
Since July, Austria has been under a deficit procedure within the European Union, requiring it to submit regular reports to Brussels on its efforts to reduce spending and control debt. The government submitted its new report this week, but experts still doubt the effectiveness of the measures taken.
In an interview with the newspaper Heute, Badelt criticized the government, describing its financial strategy as "unambitious." He explained that the Finance Ministry's goal of reducing the deficit to 3% by 2028 is insufficient to stop the accumulation of public debt. He said, "A deficit of 3% is still too high, and if we really want to stabilize public debt, it should be closer to 1%."
However, Badelt acknowledged that imposing strict financial discipline during a period of weak economic growth is difficult. He added, "It is a big task for the government, and if they can achieve their current goals, that is a good achievement in itself." But he warned that the path of austerity will not end with the current legislative session, saying, "There will be a need to continue saving over the next five or six years."
The economic expert also addressed the issue of the pension system in the country, calling for an increase in the legal retirement age in the long term. He praised some recent reforms such as the introduction of a partial retirement system, but emphasized that true sustainability requires structural changes. He said: 'People are living longer, yet the retirement age has not increased — this simply cannot continue.'