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Austria Far from Reaching Fiscal Targets

Published: January 18, 2014; 17:50 · (Vindobona)

Josef Moser, President of the Austrian Audit Court fears that the zero deficit cannot be achieved until 2016.

Austria Far from Reaching Fiscal Targets / Picture: © Reuters

In 2016, the coalition parties SPÖ (Austrian Social Democrats) and ÖVP (Austrian People´s Party) want to achieve a zero deficit. Already in late 2011, the prior government agreed thereon.

However, this target is everything but realistic, Josef Moser criticized. Moser misses reforms and thinks that the Austrian government is not ambitious enough. Although the government officially announced to reduce the budget deficits and boost economic growth, there are no visible efforts, Moser says.

“The measures taken by the government are harmful to the fiscal consolidation.” Not only the increase in family aids, but also the salary increase for civil servants has adverse effects, Moser explained. As a result, the Austrian government will hardly achieve its own fiscal targets, Moser added.

President of the Audit Court Moser stressed that the government has to put more effort in structural reforms. Moser underlines that the government program contains a number of singular measures. However, there is no coherent strategy to improve Austria´s competitiveness sustainably, Moser indicated.

With or without structural reforms, the fiscal situation of Austria will deteriorate further in the next few years. Due to the banking package, the Austrian public debt level reaches a new high year by year. After a public debt ratio of 59% of GDP in 2007, the ratio is expected to reach 80% at the end of 2014. The massive increase in public debt does not only reflect the public aids for the banking sector, but also the integration of formerly outsourced debts of the Austrian Railways and other state-held companies.