Austria On Track: EU Commission Accepts Deficit Plans Despite Surprises
As part of its autumn package for the European Semester, the EU Commission has given Austria a positive assessment of its progress in the ongoing deficit procedure. Despite the expected higher budget deficits, particularly in some federal states, Vienna is certified to be on track to comply with EU requirements. No new requirements are expected for the time being. At the same time, the government's eagerly awaited industrial strategy is coming into focus, with leading economists calling for a “European dimension.”
The EU Commission identified Austria's excessive deficit at the beginning of June, prompting the government to adopt a comprehensive austerity package aimed at consolidation. / Picture: © Marina bauer, CC BY-SA 4.0 , via Wikimedia Commons
The EU Commission presented the autumn part of its European Semester package in Strasbourg, as ORF reported. For Austria, the all-clear has been given for now: the country is considered to be “on track,” even though the overall government budget deficit is expected to remain low and the deficits of the federal states, especially in the east, are exceeding the limits.
Vienna had informed Brussels by the October 15 deadline about the deficit reduction measures anchored in the 2025/2026 double budget. The Commission did not present a new assessment of its own today. No further requirements from Brussels are currently expected until the spring package is published in May or June 2026. However, the ongoing procedure remains open; Austria aims to exit the deficit procedure by the end of 2028.
WIFO head Felbermayr calls for European industrial strategy
The industrial strategy envisaged in the government program until the end of 2025 is now to be presented at the beginning of 2026. In view of years of industrial decline, industry representatives are eagerly awaiting the plans, as ORF reported.
At a symposium organized by the Federal Competition Authority (BWB) and WIFO, WIFO Director General Gabriel Felbermayr called for a “European dimension.” He emphasized that an industrial strategy cannot be defined purely in national terms. Felbermayr pointed to the changed geopolitical situation, in which China and the US are deliberately using economic dependencies as leverage. For Europe and Austria, the focus now is on the “strategic management of dependencies.”
Economics Minister Wolfgang Hattmannsdorfer (ÖVP) emphasized that competition policy is “not contrary to industrial policy” and that the aim is to “prevent market power from being abused.” Felbermayr recommended not defining the strategy too narrowly and focusing on location policy. Important issues include energy prices, bureaucratic burdens, non-wage labor costs, and CO2 border adjustment.