Between Fiscal Discipline and a Wave of Bankruptcies in Austria: Finance Minister Marterbauer Slows Down Ahead of Government Retreat
Before the start of the government retreat, Finance Minister Markus Marterbauer (SPÖ) drew a clear red line. Despite a historic record year for corporate insolvencies, he warns against “expensive wishes” from the business community. While the industry is insisting on relief, the Ministry of Finance is focusing on targeted structural support rather than broad tax cuts.
Finance Minister Markus Marterbauer (SPÖ) warns against excessive demands from industry and politics ahead of the small government retreat. / Picture: © BKA/Brauneis
In a recent interview, Finance Minister Marterbauer made it clear that demands for a reduction in corporate income tax (KÖSt) or non-wage labor costs are currently not financially viable, as reported by ORF. “That would be completely at odds with budget consolidation,” he emphasized, referring to the goal of stabilizing the budget deficit in the long term.
According to calculations, a reduction in KÖSt of just one percentage point would cost around 500 million euros, while a reduction in non-wage labor costs of the same amount would burden the budget with up to two billion euros. Marterbauer warns against falling back into “old patterns” where election gifts undermine budgetary discipline.
Third record year in a row for corporate bankruptcies
The minister's warning comes against a gloomy economic backdrop. The Alpine Creditors' Association (AKV) today presented its balance sheet for the past year 2025: with a total of 7,156 insolvency proceedings (including those that were not opened due to lack of assets), the previous record year of 2024 was exceeded by just under eight percent. The retail, construction, and hospitality sectors are particularly affected.
AKV head Hans Musser expects a slight easing in 2026, but no “real recovery.” Since economic upturns are only reflected in insolvency statistics after a delay of six to nine months, the situation remains precarious for many businesses. Experts from WIFO and IHS forecast moderate GDP growth of between 0.9% and 1.1% for 2026, which is still below the EU average.
Industrial strategy and key technologies as a way out
Despite the tough austerity measures, Marterbauer signaled a willingness to discuss energy costs. The Productivity Council had cited cheap electricity as a key prerequisite for maintaining Austria's position as an industrial location. Marterbauer can imagine an extension of the preferential industrial electricity price, but calls for “long-term financing” instead of short-term one-off payments.
At the same time, the government is planning to present a new industrial strategy. One focus is on promoting key technologies. “Strengthen where we are strong,” said Marterbauer, who explicitly cited quantum technology as an example. The strategy also envisages providing targeted impetus in the areas of AI, robotics, and chip production in order to secure international competitiveness.
Inflation and “pocket money” for fuel
Inflation remains another key issue. Although the inflation rate fell slightly in December, Marterbauer described it as still “significantly too high.” He was particularly critical of pricing in the service sector and for fuel. Despite falling crude oil prices on the world markets, motorists are not seeing any relief. “Something is fishy here; some people seem to be pocketing the difference,” the minister said sharply.
To provide direct relief, the National Council has already decided to reduce the electricity tax for 2026. For businesses, it will drop from 1.5 cents to 0.82 cents per kWh, while for households, it will be reduced to the EU minimum of 0.1 cents.
Outlook for the closed-door meeting
The government's closed-door meeting, which begins on Tuesday, will show how the coalition partners are managing the balancing act between necessary economic stimulus and strict budget consolidation. While initial decisions are already expected on Wednesday in the Council of Ministers, the question remains whether the announced industrial strategy will be sufficient to halt the downward trend in corporate bankruptcies in the long term.