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IMF Calls for More Ambitious Budgetary Consolidation

Published: June 14, 2011; 14:02 · (Vindobona)

Austria was asked to make higher efforts to reduce its debt. The IMF recommends savings in the pension and health care systems as well as lower state subsidies in next year’s budget.

IMF Calls for More Ambitious Budgetary Consolidation / Picture: © IMF

The International Monetary Fund (IMF) urged Austria to increase its efforts for budgetary consolidation. According to the IMF’s 2011 country report, which was presented today by Enrica Detragiache, Division Chief at the IMF, and Ewald Nowotny, Governor of the Austrian National Bank (OeNB), Austria’s national debt is significantly above its pre-crisis level. Starting with the budget for the year 2012, the country’s efforts for reducing its debt would have to become “more ambitious”. “We ask the people in charge to make additional effort for consolidation starting with the 2012 budget so that public finances can be put on a solid ground”, stated Detragiache.

Austria would have to focus on the areas pensions, health care and subsidies. The IMF recommends approximating the effective retirement age to the statutory retirement age through higher discounts on early retirements and a reform of the special retirement scheme for manual workers and long-time insured people. The Austrian health care system would have to be more cost-efficient. The IMF identified savings potential in the areas of railway and housing subsidies.