The European Commission decided not to formally reprimand Austria for violating EU budget rules, a major victory for Herbert Kickl’s Freedom Party (FPÖ), Euractiv reported.
The decision not to launch an excessive deficit procedure (EDP) was taken on Friday after the FPÖ and its potential coalition partner, the People’s Party (ÖVP), presented a budget aimed at reducing Austria’s deficit below the EU’s limit of 3 per cent of annual GDP.
The plan to save €6.4 billion, or 1.7 per cent of Austria’s annual GDP, includes drastic cuts in carbon tax refunds to households, as well as reductions in tax credits for the purchase of electric vehicles and solar panels. European Commission spokesperson Balazs Ujvari deemed the measures sufficient, adding that Brussels would be “keeping an eye” on Austria’s fiscal situation in the coming months.
The Commission considers the measures concerned to be a sufficient basis in order to bring the Austrian budget deficit down below 3% by the end of this year.
In April, the Commission expects to release new data on Austria’s fiscal situation as of the end of 2024. Earlier, the failure of the ÖVP-led coalition talks earlier this year led to the resignation of Karl Nehammer as chancellor.
Eight member states, including Italy and France, now face the EDP. They have found it difficult to comply with EU budget rules, which came back into force last year after being suspended during the COVID-19 pandemic. The energy crisis following the outbreak of war in Ukraine in 2022 has also affected European countries’ budgets.
The European Commission’s decision will be formally endorsed by EU finance ministers at a meeting in Brussels the following Tuesday.
