Austria's Finance Minister Mayr Must Explain Letter to Brussels in Austrian Parliament
Finance Minister Gunter Mayr is facing a political test. At the initiative of the SPÖ, the Standing Subcommittee on EU Affairs must meet to discuss the letter with which the coalition negotiators wanted to avert the threat of deficit proceedings by the EU. According to regulations, the meeting must take place within the next two weeks. The focus will be on the planned austerity measures amounting to 6.4 billion euros outlined in the letter to the EU Commission.
Austria's Finance Minister Mayr (l.) met with EU Commissioner Valdis Dombrovskis (r.) to negotiate the package of measures to avert an EU deficit procedure. / Picture: © EC European Commission
The letter, which Mayr forwarded to the EU as an intermediary for the coalition negotiators, contains a list of savings measures that are to take effect this year in particular. Concrete plans include the abolition of the climate bonus and educational leave. However, the government remains vague in other areas. For example, there are hardly any details on planned cuts to subsidies or reforms to health insurance. It is precisely these ambiguities that are now causing criticism and questions, particularly from the SPÖ.
SPÖ party leader Andreas Berger explained: “We need full transparency about the specific measures the government is planning and what impact these will have on the population. Such a process must not take place in secret.”
EU deficit procedure: Impending sanctions prevented?
The background to the letter is the desire to avert an excessive deficit procedure by the European Commission. According to EU regulations, the budget deficits of member states must not exceed certain limits. The Commission expects the rules to be tightened for 2025. Countries such as Austria, whose debt ratio has recently risen, are therefore under particular pressure to make savings.
“We had to act to prevent sanctions against Austria. The letter is a first step that should pave the way for further negotiations with the EU,” Mayr explained to journalists.
Coalition negotiations delay parliamentary processes
The political debate about the savings is exacerbating the already tense situation in domestic politics. While the SPÖ and other opposition parties are pressing for clarification, key decisions in parliament have stalled. The constitution of most parliamentary committees has been postponed. Originally, these were to be completed at the plenary session in January, but in view of the ongoing coalition negotiations, this has been dispensed with.
Political consequences: A balancing act for the government
The current situation is a balancing act for the governing parties. On the one hand, compliance with European budget rules is at stake, while on the other, unpopular measures such as the abolition of the climate bonus threaten to further weaken public support. Political experts also see this as a threat to the already fragile coalition. “The government is trying to combine European expectations and domestic political constraints. This could lead to conflicts in the long term,” says political scientist Peter Schuster.
The upcoming meeting of the subcommittee will show whether Finance Minister Mayr can meet the increased expectations. However, one thing is clear: the pressure on the government and the finance minister will not decrease in the coming weeks.