(April 28): Austria’s government coalition agreed on €5.1 billion (US$6 billion) worth of budget steps, including extending a special tax on banks, as part of a two-year framework that seeks to end a European Union probe of its finances.
The plan targets a €2.5 billion reduction in the federal deficit as well as €2.6 billion of measures aimed at boosting growth, leaders of the ruling conservatives, social democrats and liberals said at a press conference late Monday in Vienna. A special bank levy will remain at €350 million, cancelling an earlier pledge to reduce the tax.
The announcement is the result of weeks of negotiations by the centrist coalition that has sought to keep the far-right Freedom Party out of power after it won the most votes at parliamentary elections in 2024. Finance Minister Markus Marterbauer will present the two-year budget to lawmakers on June 10.
As part of the fiscal plan, pensioners will face below-inflation increases in 2027 and 2028, the corporate tax rate will increase for companies with revenue exceeding €1 million, and employer contributions will fall by a percentage point from 2028.
Persistent budget deficits have prompted credit-rating agencies to reassess Austrian debt. Fitch Ratings cut its score to a record low AA in June, while Moody’s Ratings changed the outlook to negative in August.
Once among the European Union’s most ardent advocates of strict budget policy, Austria is now under the bloc’s corrective process after failing to keep its deficit below 3% of economic output.
See also: New Zealand jobs hit 14-month high despite Iran war concerns
Uploaded by Liza Shireen Koshy
