Recommendation for a COUNCIL RECOMMENDATION with a view to bringing an end to the situation of an excessive deficit in Austria
Date: 2025-06-23
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Austria, budget deficit, budgetary control, economic policy, economic reform, gross domestic product, public debt, public finance, stability pact

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   EUROPEAN COMMISSION  Brussels, 23.6.2025  COM(2025) 343 final  Recommendation for a COUNCIL RECOMMENDATION with a view to bringing an end to the situation of an excessive deficit in Austria   
 
 
Recommendation for a 

COUNCIL RECOMMENDATION 

with a view to bringing an end to the situation of an excessive deficit in Austria 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 126(7) thereof, 

Having regard to the recommendation from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

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According  to  Article  126  of  the  Treaty  on  the  Functioning  of  the  European  Union 
(TFEU), Member States shall avoid excessive government deficits. 

The  Stability  and  Growth  Pact 
the  objective  of  sound  and 
sustainable government finances as a means of strengthening the conditions for price 
stability  and  for  strong,  sustainable  and  inclusive  growth  underpinned  by  financial 
stability, thereby supporting the achievement of the Union’s objectives for sustainable 
growth and employment. 

is  based  on 

On [DATE] 2025, the Council decided, in accordance with Article 126(6) TFEU, that 
an excessive deficit existed in Austria due to non-compliance with the deficit criterion. 
Article 126(7) TFEU and Article 3(4) of Council Regulation (EC) No 1467/971 require 
the Council to adopt a recommendation addressed to the Member State concerned with 
a view to bringing the situation of excessive deficit to an end within a given period. In 
line  with  Article  3(4)  of  Council  Regulation  (EC)  1467/97,  that  recommendation  is 
also to establish a maximum deadline of six months for effective action to be taken by 
the Member State concerned to correct the excessive deficit, which can be reduced to 
three months  when warranted by the seriousness  of the situation. Furthermore, in  its 
recommendation,  the  Council  is  to  recommend  that  the  Member  State  implements  a 
corrective net expenditure  path2, which ensures that the general government deficit is 
brought and maintained below the 3% of GDP reference value within the deadline set 
in  that  recommendation.  Where  the  excessive  deficit  procedure  was  opened  on  the 
basis of the deficit criterion, the corrective net expenditure path is to be consistent with 
a minimum annual structural adjustment of at least 0.5% GDP as a benchmark for the 
years when the general government deficit is expected to exceed the reference value. 

the 

deficit 

excessive 

Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation  
of 
ELI: 
procedure 
http://data.europa.eu/eli/reg/1997/1467/2024-04-30). 
According  to  Article  2(2)  of  Regulation  (EU)  2024/1263,  'net  expenditure'  means  government 
expenditure net of interest expenditure, discretionary revenue measures, expenditure on programmes of 
the  Union  fully  matched  by  revenue  from  Union  funds,  national  expenditure  on  co-financing  of 
programmes funded by the Union, cyclical elements of unemployment benefit expenditure, and one-offs 
and other temporary measures. 

2.8.1997, 

209, 

(OJ 

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The Commission  may, during a transition  period in  2025, 2026 and 2027, adjust the 
benchmark  to  take  into  account  the  increase  in  interest  expenditure  when  setting  the 
proposed  corrective  path  for  those  years,  taking  into  account  recital  23  of  Council 
Regulation (EU) 2024/1264.  

Real  GDP  in  Austria  contracted  by  1.0%  in  2024.  According  to  the  European 
Commission  Spring  2025  Forecast,  the  economy  is  expected  to  contract  further  by 
0.3%  in  2025,  in  a  context  of  falling  investments  and  negative  net  exports.  In  2026, 
real GDP is expected to increase by 1.0%, with strengthening private consumption and 
investment growth turning positive. The unemployment rate is expected to reach 5.3% 
in 2025 and 5.2% in 2026. Inflation is set to remain stable at 2.9% in 2025 and reach 
2.1% in 2026. 
According to the data provided by Eurostat on 22 April 20253, the general government 
deficit  in  Austria  stood at  4.7%  of  GDP  in  2024.  The  European  Commission  Spring 
2025 Forecast projects a general government deficit of 4.4% of GDP in 2025 and 4.2% 
of GDP in 2026, thus above the reference value in both years. The structural deficit is 
projected at 3.4% of GDP in 2025 and is expected to increase by 0.2 percentage points 
of GDP in 2026. 

General  government  debt  stood  at  81.8%  of  GDP  at  end-2024.  According  to  the 
European  Commission  Spring  2025  Forecast,  it  is  projected  to  increase  to  84.0%  of 
GDP at end-2025 and 85.8% of GDP at end-2026, thus remaining above the 60% of 
GDP reference value. 

On  13  May  2025,  Austria  submitted  its  first  national  medium-term  fiscal-structural 
plan,  in  accordance  with  Articles  11  and  36(1),  point  (a)  of  Regulation  (EU) 
2024/12634.  The  plan  covers  the  period  2025-2029  and  presents  a  fiscal  adjustment 
over seven years. On [DATE], the Council adopted a Recommendation endorsing the 
national  medium-term  fiscal-structural  plan  of  Austria  for  the  years  2025  to  20295. 
This  recommendation  specified  the  set  of  reforms  and  investments  underpinning  the 
extension of the adjustment period to seven years and set maximum growth rates for 
net  expenditure.  These  recommended  maximum  growth  rates  for  net  expenditure 
factor  in  all  the  necessary  requirements  of  a  corrective  path  and  should  be 
recommended  as  the  corrective  net  expenditure  path  under  the  excessive  deficit 
procedure.  The  corrective  net  expenditure  path  is  thus  consistent  with  a  minimum 
annual structural adjustment of at least 0.5 % GDP as a benchmark for the years when 
the general government deficit is expected to exceed the reference value, in line with 
Regulation (EC) 1467/97.  

Based  on  the  recommended  maximum  growth  rates  for  net  expenditure,  as  the  sole 
operational  reference  for  monitoring  compliance,  which  is  set  out  in  the  Council 
Recommendation endorsing the plan of Austria and in this recommendation, and based 
on  the  European  Commission  medium-term  government  debt  projection  framework 
and the European Commission Spring 2025 Forecast, the general government deficit is 
projected to decrease from 4.4% of GDP in 2025 to 2.9% by 2030.  In its plan, Austria 

Eurostat  Euro  Indicators  published  on  22  April  2025.  See:  https://ec.europa.eu/eurostat/web/products-
euro-indicators/w/2-22042025-ap   
Regulation  (EU)  2024/1263  of  the  European  Parliament  and  of  the  Council  of  29  April  2024  on  the 
effective  coordination  of  economic  policies  and  on  multilateral  budgetary  surveillance  and  repealing 
Council. 
Council  Recommendation  of  [DATE]  endorsing  the  national  medium-term  fiscal-structural  plan  of 
Austria, [reference]. 

(5) 

(6) 

(7) 

(8) 

(9) 

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expects the deficit to no longer exceed the 3% deficit reference value earlier, in 2028, 
based on the plan's assumptions.  

(10)  Based  on  the  corrective  net  expenditure  path  in  this  recommendation,  the  European 
Commission medium-term government debt projection framework, and the European 
Commission  Spring  2025  Forecast,  the  general  government  debt  would  continue 
increasing  from  81.8%  of  GDP  at  end-2024  until  89.2%  at  end-2030  and  then  start 
decreasing to 89.1% in 2031. 

(11)  Abiding  by  the  recommended  maximum  growth  rates  of  net  expenditure  set  by  the 
corrective  path  should  secure  a  lasting  correction  of  the  excessive  deficit,  while 
concrete measures should be geared towards enhancing the quality and composition of 
the public finances, preserving investment and reinforcing the growth potential of the 
economy.  Reforms  of  a  fiscal  and  broader  economic  nature,  including  the  reforms 
underpinning  the  extension  of  the  adjustment  period,  as  specified  in  Annex II  of  the 
Council  Recommendation  of  [DATE]  endorsing  the  medium-term  plan  of  Austria6, 
should  improve  the  growth  and  resilience  potential  of  the  economy  in  a  sustainable 
manner, and support fiscal sustainability. 

(12) 

In line with Article 8(3) of Regulation No 1467/97, a Council decision to abrogate the 
excessive  deficit  procedure  shall  only  be  taken  pursuant  to  Article  126(12)  TFEU 
where the deficit has been brought below the reference value and is projected by the 
Commission to remain so in the current and following year. 

HEREBY RECOMMENDS: 

1. 

2. 

3. 

Austria should ensure that the nominal growth rate of net expenditure does not exceed 
the maxima established in Annex I.  

Austria should thus put an end to the excessive deficit situation by 2028. 

The Council establishes the deadline of 15 October 2025 for Austria to take effective 
action  and  present  the  necessary  measures.  Thereafter,  Austria  should  report  on 
progress  made  in  the  implementation  of  this  recommendation  at  least  every  six 
months, in spring in the context of its annual progress report and in the autumn in the 
draft budgetary plan, until the excessive deficit has been corrected. 

This Recommendation is addressed to Austria. 

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Council  Recommendation  of  [DATE]  endorsing  the  national  medium-term  fiscal-structural  plan  of 
Austria, [reference]. 

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ANNEX I 
Maximum growth rates of net expenditure 
(annual and cumulative growth rates, in nominal terms) 
Austria 

Years 

2025 

2026 

2027 

2028 

Growth rates 
(%) 

Annual 

Cumulative (*) 

2.6 

2.6 

2.2 

4.8 

2.2 

7.2 

2.0 

9.4 

(*) The cumulative growth rates are calculated by reference to the base year of 2024. 

Done at Brussels, 

For the Council 
The President 

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