Austria escapes the European Commission’s excessive deficit procedure.
BRUSSELS ― The European Commission has approved an Austrian plan to slash public spending that looks set to underpin the program of a potential far-right-led government.
The anti-immigration Freedom Party (FPÖ) and the center-right People’s Party (ÖVP), who are negotiating an historic coalition agreement that would return the country’s first far-right chancellor since World War II, both had a hand in the budget proposal.
The Commission’s decision offers predictability to Austria’s public purse but also puts its relationship with Vienna on a positive track ― in terms of finances at least.
“The Commission will not propose the opening of excessive deficit procedure for Austria,” Commission economy spokesperson Balazs Ujvari told reporters in Brussels today, referring to the EU’s process.
While the two parties have not yet finalized a coalition agreement, they achieved their initial goal of avoiding the EU’s punishment for over spenders.
This process entails drastic budget cuts and, in some cases, might tarnish the country’s reputation in the eyes of investors.
“We saw an intention to reduce spending in Austria in a certain number of areas in the course of 2025 and these measure will help in terms of reducing the budget deficit,” Ujvari added.
To avert the excessive deficit procedure, the FPÖ and ÖVP on Monday set out spending cuts of up to €6.3 billion that they will be forced to carry out if they enter government.
These measures are designed to curb spending below the EU’s 3 percent GDP-deficit limit in 2025.
Finance ministers are expected to approve the Commission’s recommendation during a gathering in Brussels on Tuesday.
