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Budget Deficit: Austria Threatened with Penalty

Politics ♦ Published: April 25, 2014; 19:23 ♦ (Vindobona)

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Due to the capital injections into the distressed lender Hypo Group, Austria´s 2013 budget deficit will exceed the 3.0% threshold. According to Finance Minister Spindelegger, Austria might face an excessive deficit procedure.

Austrian Fiscal Policy: No Reason to Smile / Picture: © Flickr / SPÖ Presse und Kommunikation

In an interview with the Austrian daily “Standard”, Spindelegger explained that the Austrian public debt ratio will reach about 80% of GDP this year. In total, the public debt comes at € 230bn, which corresponds to 75% of GDP. The main reason behind the significant increase is the creation of a publicly held bad bank for the distressed lender Hypo Group Alpe Adria. The special…