Recommendation for a COUNCIL RECOMMENDATION endorsing the national medium-term fiscal-structural plan of Austria
Date: 2025-06-23
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Austria, budget deficit, coordination of EMU policies, economic reform, fiscal policy, investment, macroeconomics, national planning, public debt, structural adjustment

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   EUROPEAN COMMISSION  Brussels, 23.6.2025  COM(2025) 341 final  Recommendation for a COUNCIL RECOMMENDATION endorsing the national medium-term fiscal-structural plan of Austria  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

endorsing the national medium-term fiscal-structural plan of Austria 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 121 thereof,  

Having regard to Regulation (EU) 2024/1263, and in particular Article 17 thereof,  

Having regard to the recommendation from the Commission,  

Whereas:  

GENERAL CONSIDERATIONS 

(1) 

(2) 

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2 

3 

4 

A reformed EU economic governance framework entered into force on 30 April 2024. 
Regulation  (EU)  2024/1263  of  the  European  Parliament  and  of  the  Council  on  the 
effective  coordination  of  economic  policies  and  on  multilateral  budgetary 
surveillance1,  together  with  the  amended  Regulation  (EC)  No  1467/97  on  the 
implementation  of  the  excessive  deficit  procedure2,  and  the  amended  Council 
Directive  2011/85/EU  on  the  budgetary  frameworks  of  Member  States3  are  the  core 
elements of the reformed EU economic governance framework. The framework aims 
at  ensuring  public  debt  sustainability  and  sustainable  and  inclusive  growth  through 
reforms  and  investments.  It  promotes  national  ownership  and  has  a  medium-term 
focus, combined with an effective and coherent enforcement of the rules.   

The  national  medium-term  fiscal-structural  plans  that  Member  States  submit  to  the 
Council  and  to  the Commission  are  at  the  centre  of  the  new  economic  governance 
framework. The plans are to deliver on two objectives: i) ensuring that, by the end of 
the adjustment period, general government debt is on a plausibly downward trajectory, 
or stays at  prudent  levels,  and that the government  deficit is  brought and maintained 
below the reference value of 3% of GDP over the medium term, and ii) ensuring the 
delivery  of  reforms  and  investments  responding  to  the  main  challenges  identified  in 
the context of the European Semester and addressing the common priorities of the EU. 
To that end, each plan is to present a medium-term commitment to a net expenditure4 

No 

(EC) 

Regulation 

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 
30.4.2024, 
1466/97 
ELI: http://data.europa.eu/eli/reg/2024/1263/oj).  
Council  Regulation  (EU)  2024/1264  of  29  April  2024  amending  Regulation  (EC)  No  1467/97  on 
speeding  up  and  clarifying  the  implementation  of  the  excessive  deficit  procedure  (OJ  L,  2024/1264, 
30.4.2024, ELI: http://data.europa.eu/eli/reg/2024/1264/oj). 
Council Directive (EU) 2024/1265 of 29 April 2024 amending Directive 2011/85/EU on requirements 
for 
30.4.2024, 
the  Member  States 
ELI: http://data.europa.eu/eli/dir/2024/1265/oj). 
Net expenditure as defined in Article 2 of Regulation (EU) 2024/1263, namely government expenditure 
net  of  (i)  interest  expenditure,  (ii)  discretionary  revenue  measures,  (iii)  expenditure  on  Union 

frameworks 

2024/1263, 

2024/1265, 

budgetary 

(OJ  L, 

(OJ 

L, 

of 

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path, which effectively establishes a budgetary constraint for the duration of the plan, 
covering four or five years (depending on the regular term of legislature in a Member 
State).  In  addition,  the  plan  is  to  explain  how  the  Member  State  will  ensure  the 
delivery  of  reforms  and  investments  responding  to  the  main  challenges  identified  in 
the  context  of  the  European  Semester,  in  particular  in  the  country-specific 
recommendations  (including  those  pertaining  to  the  macroeconomic  imbalances 
procedure (MIP), if applicable), and how the Member State will address the common 
priorities of the Union. The period for fiscal adjustment covers a period of four years, 
which  may  be  extended  by  up  to  three  years  if  the  Member  State  commits  to 
delivering a set of relevant reforms and investments that satisfies the criteria set out in 
Regulation (EU) 2024/1263.   

(3) 

(4) 

Following the submission of the plan, the Commission is to assess whether it complies 
with the requirements of Regulation (EU) 2024/1263.   

Upon  a  recommendation  from  the  Commission,  the  Council  is  to  then  adopt  a 
recommendation to set the net  expenditure path  of the Member State concerned and, 
investment  commitments 
the  set  of  reform  and 
where  applicable,  endorses 
underpinning an extension of the fiscal adjustment period.  

CONSIDERATIONS  CONCERNING  THE  NATIONAL  MEDIUM-TERM  FISCAL-
STRUCTURAL PLAN OF AUSTRIA 

(5) 

On 13 May 2025, Austria submitted its national medium-term fiscal-structural plan to 
the Council and to the Commission. The submission took place following an extension 
of the deadline set out in Article 36 of Regulation (EU) 2024/1263, as agreed with the 
Commission in view of the reason put forward by Austria, namely that following the 
general  elections  in  Austria  on  29  September  2024,  negotiations  on  forming  a  new 
government took longer than originally assumed. 

Process prior to the submission of the plan 

(6) 

On  18  December  2024  the  Commission  sent,  according  to  Article  9  of  Regulation 
(EU) 2024/1263,  the reference trajectory5 to  Austria. The Commission  published the 
reference  trajectory  on  13  May  20256.  The  reference  trajectory  is  risk-based  and 
ensures that, by the end of the fiscal  adjustment period and in the absence of further 
budgetary  measures  beyond  the  adjustment  period,  general  government  debt  is  on  a 
plausibly  downward  trajectory  or  stays  at  prudent  levels  over  the  medium  term,  and 
the  general  government  deficit  is  brought  below  3%  of  GDP  over  the  adjustment 

programmes fully matched by revenue from Union funds, (iv) national expenditure on co-financing of 
programmes funded by the Union, (v) cyclical elements of unemployment benefit expenditure and (vi) 
one-offs and other temporary measures. 
Prior  guidance  transmitted  to  the  Member  States  and  Economic  and Financial Committee includes 
trajectories  without and  with an extension  of  the  adjustment  period  (covering  4  and  7  years, 
respectively). It  also includes the main  initial  conditions  and underlying assumptions  used  in  the 
Commission’s medium-term government debt  projection  framework. The  reference  trajectory  was 
calculated on the basis of the methodology described in the Commission’s Debt Sustainability Monitor 
2023 (https://economy-finance.ec.europa.eu/publications/debt-sustainability-monitor-2023_en). 
is 
based on the Commission Autumn 2024 Forecast and its medium-term extension up to 2034, and long-
term  GDP  growth  and  ageing  costs  are  in line  with  the  joint  Commission-Council 2024  Ageing 
Report (https://economy-finance.ec.europa.eu/publications/2024-ageing-report-economic-and-
budgetary-projections-eu-member-states-2022-2070_en).  
https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/national-medium-term-fiscal-
structural-plans_en#Austria  

It 

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period and maintained below that reference value over the medium term. The medium 
term  is  defined  as  the  ten-year  period  after  the  end  of  the  adjustment  period.  In 
accordance  with  Articles  6,  point  (d),  7  and  8  of  Regulation  (EU)  2024/1263,  the 
reference  trajectory  is  also  consistent  with  the  deficit  benchmark,  the  debt 
sustainability safeguard and the deficit resilience safeguard.  

The  reference  trajectory  of  Austria  sets  out  that,  based  on  the  Commission’s 
assumptions  and  assuming  a  7-year  adjustment  period,  net  expenditure  should  not 
grow by more than the values provided in Table  1. This corresponded to average net 
expenditure growth of 2.3% over the adjustment period (2025-2031) and of 2.2% over 
the period covered by the plan (2025-2029). 

Table 1: Reference trajectory provided by the Commission to Austria on 18 December 
2024 

2025   2026   2027   2028   2029   2030   2031  

 2.0 

 1.7 

 2.4 

 2.4 

 2.5 

 2.6 

 2.7 

Average 
2025-
2029  
 2.2 

Average 
2025-
2031  
 2.3 

Maximum net 
expenditure 
growth 
(annual, %) 

Source: Commission’s calculations. 

(7) 

(8) 

(9) 

In  line  with  Article  12  of  Regulation  (EU)  2024/1263,  Austria  and  the  Commission 
engaged in a technical dialogue from March to May 2025. The dialogue centred on the 
net  expenditure  path  envisaged  by  Austria  and  its  underlying  assumptions,  the 
envisaged set of reform and investment commitments to underpin an extension of the 
adjustment  period  (such  as  reforms  increasing  the  effective  retirement  age  and 
boosting labour market participation), as well as the envisaged delivery of reforms and 
investments  responding  to  the  main  challenges  identified  in  the  context  of  the 
European Semester and the common priorities of the Union in a fair green and digital 
transition, social and economic resilience, energy security and the build-up of defence 
capabilities. 

In  June  2024  and  March  2025,  in  line  with  Article  11(3)  and  36(1),  point  (c),  of 
Regulation  (EU)  2024/1263,  Austria  engaged  in  a  consultation  process  with  civil 
society, social partners, regional authorities and other relevant stakeholders.  

The plan was presented to the national parliament on 13 May 2025 and subsequently 
discussed in parliamentary committees.  

Other related processes 

fiscal-structural  plan, 

(10)  On [Date], together with the present Recommendation endorsing the national medium-
term 
the  Council  established,  upon  a  Commission 
recommendation,  the  existence  of  an  excessive  deficit  in  Austria  due  to  non-
compliance  with  the  deficit  criterion  and  adopted  a  Recommendation  under  Article 
126(7)  TFEU  with  a  view  to  bringing  an  end  to  the  situation  of  an  excessive 

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government deficit in Austria.7 The simultaneous adoption of those recommendations 
ensures consistency between the recommended adjustment paths.  

(11)  On 13 May 2025, Austria submitted its Draft Budgetary Plan for the years 2025-2026. 

The Commission adopted an opinion on this Draft Budgetary Plan on 23 June 20258. 

(12)  On  [Date], 

the  Council  addressed 

to  Austria  a  series  of  country-specific 

recommendations (CSRs) in the context of the European Semester9.   

SUMMARY OF THE PLAN AND THE COMMISSION’S ASSESSMENT THEREOF 

(13) 

In  line  with  Article  16  of  Regulation  (EU)  2024/1263,  the  Commission  assessed  the 
plan as follows: 

Context: macroeconomic and fiscal situation and outlook  

(14)  Economic  activity  in  Austria  contracted  by  1.0%  in  2024,  driven  by  declining 
investment  and  stagnant  consumption.  According  to  the  Commission  Spring  2025 
Forecast, the economy is expected to decline by 0.3% in 2025, in a context of falling 
investments  and  negative  net  exports.  In  2026,  real  GDP  is  set  to  increase  by  1.0%, 
with strengthening private consumption and investment growth turning positive. Over 
the forecast  horizon (2025-2026), potential GDP growth  in  Austria is  expected to  be 
subdued  at  0.3%  on  average,  as  a  consequence  of  weak  investment,  demographic 
change and stagnant total factor productivity. The unemployment rate stood at 5.2% in 
2024,  and  is  projected  by  the  Commission  to  amount  to  5.3%  in  2025  and  5.2%  in 
2026. The GDP deflator is projected to increase from 3.1% in 2024 to 3.5% in 2025, 
and to go down to 2.2% in 2026. 

(15)  Regarding  fiscal  developments,  Austria’s  general  government  deficit  amounted  to 
4.7% of GDP in 2024. According to the Commission Spring 2025 Forecast, it is set to 
reduce to 4.4% of GDP in 2025 and to decline further to 4.2% of GDP in 2026. The 
Commission  Spring  2025  Forecast  includes  the  main  consolidation  measures  of 
Austria’s draft budget for 2025 and 2026 that the government proposed to the national 
parliament  in  May  2025.  General  government  debt  stood  at  81.8%  of  GDP  at  end-
2024. According to the Commission Spring 2025 Forecast, the debt ratio is expected 
to  increase  to  84.0%  of  GDP  at  end-2025  and  to  85.8%  of  GDP  at  end-2026.  The 
fiscal  forecast  by  the  Commission  does  not  consider  the  policy  commitments  in  the 
medium-term  fiscal-structural  plan  as  such  until  they  are  underpinned  by  credibly 
announced and sufficiently specified concrete policy measures.  

Net expenditure path and main macroeconomic assumptions in the plan 

(16)  Austria’s national medium-term fiscal-structural plan covers the period 2025-2029 and 

presents a fiscal adjustment over seven years. 

(17)  The  plan  contains  all  information  required  by  Article  13  of  Regulation  (EU) 

2024/1263. 

(18)  The plan commits  to the net  expenditure path  indicated in  Table  2, corresponding to 
average net expenditure growth of 2.3% over the years 2025-2029. In addition, Austria 

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9 

Recommendation for a Council Recommendation with a view to bringing an end to the situation of an 
excessive deficit in Austria, 23.06.2025, COM(2025) 343 final. 
Commission Opinion on the Draft Budgetary Plan of Austria, 23.06.2025, C(2025) 4106 final. 
Council  Recommendation  on  the  economic,  social,  employment,  structural  and  budgetary  policies  of 
Austria, OJ C XXX, X.X.2025, p. XX. 

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commits to a set of reforms and investments with the view to extending the adjustment 
period  to  7  years  (2025-2031),  over  which  the  average  net  expenditure  growth  is 
planned to be 2.3%. The average net expenditure growth reported in the plan over the 
adjustment  period  (2025-2031)  is  broadly  in  line  with  the  reference  trajectory 
transmitted  by  the  Commission  on  18  December  2024.  The  plan  assumes  potential 
GDP growth to increase to  1.1% in 2025 from 0.4% in 2024 and to remain stable at 
1.1% thereafter.  In addition,  the plan expects  the growth  rate of the  GDP deflator to 
decrease  to  2.4%  in  2025  and  to  2%  in  2026  from  3.1%  in  2024,  before  increasing 
slightly to 2.1% in 2027 to 2029. 

Table 2: Net expenditure path and main assumptions in Austria’s plan 

Extension of 
the 
adjustment 
period 

2025  2026  2027  2028  2029  2030  2031  Average 
over the 
period of 
validity of 
the plan 
2025-2029 
 2.3 

 2.6 

 2.2 

2.2  

2.0  

2.3  

2.4  

2.4  

Average 
over the 
adjustment 
period 
2025-2031 

2.3  

2.6 

4.8 

7.2 

9.4 

11.9 

14.5 

17.3 

n.a.  

n.a.  

1.1 

1.1  

1.1  

1.1  

1.1  

1.1  

1.1  

1.1  

1.1  

 2.4 

2.0  

2.1  

2.1  

2.1  

2.2  

2.2  

2.1  

2.2  

Net 
expenditure 
growth  
(annual, %)  
Net 
expenditure 
growth  
(cumulative, 
from base 
year 2024, 
%)  
Potential 
GDP growth 
(%)  
Inflation 
(GDP deflator 
growth) (%)  

Source: Medium-term fiscal-structural plan of Austria and Commission calculations.  

Implications of the plan’s net expenditure commitments for general government debt  

(19) 

If the net  expenditure path  committed to  in  the plan and the underlying assumptions 
materialise,  general  government  debt  would,  according  to  the  plan,  increase  initially 
until  2028  when  it  is  expected  to  peak  at  86.8%  of  GDP.  From  2029  on,  it  is  set  to 
decline  gradually  by  on  average  0.8  percentage  point  of  GDP  until  the  end  of  the 
adjustment period in 2031, as per the following table. Over the medium term, debt will 
continue  to  decline  by  an  expected  1.3  percentage  points  of  GDP  annually  to  reach 
71.2% of GDP by 2041.  

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Table 3: General government debt and balance developments in Austria’s plan  

Government debt 
(% of GDP) 
Government balance 
(% of GDP) 

2024  2025  2026  2027  2028  2029  2030  2031  2041 
81.8   84.3   85.9   86.6   86.8   86.5   85.7   84.4   71.2  

 -4.7 

-4.7  

-4.2  

-3.6  

-3.0  

-2.5  

-2.1  

-1.6  

-1.4  

Source: Medium-term fiscal-structural plan of Austria. 

Thus, according to the plan, the general government debt ratio would be on a downward path 
by  the  end  of  the  adjustment  period  (2031).  This  is  plausible  as,  based  on  the  plan’s 
assumptions, debt is projected to decline over the ten years following the adjustment period 
under all deterministic stress tests of the Commission’s Debt Sustainability Analysis, and the 
stochastic  projections  indicate  that  debt  would  decline  with  a  sufficiently  high  probability. 
Therefore, based on the plan’s policy commitments and macroeconomic assumptions, the net 
expenditure path put forward in the plan is consistent with the requirement for debt as set out 
in Articles 6, point (a), and 16(2) of Regulation (EU) 2024/1263.   

Implications  of  the  plan’s  net  expenditure  commitments  for  the  general  government 
balance  

(20)  Based  on  the  plan’s  net  expenditure  path  and  assumptions,  the  general  government 
deficit would remain elevated at 4.7% of GDP in 2025 and start declining gradually as 
of 2026. The deficit is expected to no longer exceed the reference value of 3% of GDP 
in  2028  and  it  is  projected  to  continue  to  decline  throughout  the  adjustment  period. 

Thus, according to the plan, the general government balance would not exceed the 3% 
of GDP reference value at the end of the adjustment period (2031).  

In  addition,  in  the  ten  years  following  the  adjustment  period  (i.e.  until  2041),  the 
government deficit would not exceed 3% of GDP. 

Therefore, based on the plan’s policy commitments and macroeconomic assumptions, 
the net expenditure path put forward in the plan is consistent with the requirement for 
the deficit as set out in Articles 6, point (b), and 16(2) of Regulation (EU) 2024/1263.   

Time profile of the fiscal adjustment  

(21)  The  time  profile  of  the  fiscal  adjustment,  measured  as  the  annual  change  in  the 
structural  primary balance, as described in  the plan, is  broadly  linear,  as required by 
Article 6, point (c), of Regulation (EU) 2024/1263. In addition, the fiscal adjustment 
over  the  first  five  years  of  the  plan  is  slightly  more  than  proportional  to  the  total 
adjustment effort. 
Therefore, based on the plan’s policy commitments and macroeconomic assumptions, 
the net expenditure path put forward in the plan is consistent with the no-backloading 
safeguard clause set out in Article 6, point (c) of Regulation (EU) 2024/1263. 

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Table 4: Structural primary balance developments in Austria’s plan  

2024  2025  2026  2027  2028  2029  2030  2031 

Structural primary balance 

-2.4 

-1.9 

-1.4 

-0.9 

-0.3 

0.2 

0.7 

1.2 

(% of GDP) 

Change in structural primary 
balance 

(pps.) 

n.a. 

0.5 

0.5 

0.5 

0.6 

0.5 

0.5 

0.5 

Source: Medium-term fiscal-structural plan of Austria. 

Consistency of the plan with the excessive deficit procedure 

(22)  The net expenditure path set out in the plan is in line with the requirements under the 
excessive  deficit  procedure  (in  particular  with  the  minimum  annual  structural 
adjustment established as a benchmark in Article 3(4), third subparagraph of Council 
Regulation (EC) 1467/97). 

Consistency of the plan with the deficit resilience safeguard  

(23)  The  requirement  of  the  preventive  arm  set  out  in  Article  8  of  Regulation  (EU) 
2024/1263 regarding the deficit resilience safeguard, which aims to provide a common 
margin relative to the deficit reference value of 3% of GDP, applies to  Austria as of 
2029, as the deficit is  planned to  no longer exceed 3% of GDP as of  2028. In 2029, 
2030 and 2031 in accordance with Article 8 of Regulation (EU) 2024/1263, the annual 
adjustment  in  the  structural  primary  balance  should  not  be  less than  0.25 percentage 
points of GDP if the structural deficit remained above 1.5% of GDP in the preceding 
year, to achieve a common resilience margin in structural terms of 1.5% of GDP. The 
fiscal adjustment that results from the plan’s policy commitments and macroeconomic 
assumptions is  0.5% of GDP in  2029  to  2031. Therefore, based on the plan’s policy 
commitments and macroeconomic assumptions, the net expenditure path  put forward 
in the plan is consistent with the deficit resilience safeguard.  

Consistency of the plan with the debt sustainability safeguard 

(24) 

In  accordance  with  Article  7  of  Regulation  (EU)  2024/1263,  as  general  government 
debt will be between 60% and 90% of GDP over the adjustment period according to 
the  plan,  the  debt  ratio  is  required  to  decline  by  at  least  0.5  percentage  points  on 
average per year until it falls below 60%. This average decline is calculated over the 
period  2029-2031,  i.e.  starting  in  the  year  in  which  the  excessive  deficit  procedure 
would  be  abrogated  according  to  the  plan,  and  amounts  to  0.8  percentage  points. 
Therefore, based on the plan’s policy commitments and macroeconomic assumptions, 
the  net  expenditure  path  put  forward  in  the  plan  is  consistent  with  the  debt 
sustainability safeguard.  

Macroeconomic assumptions of the plan 

(25)  The  plan  is  based  on  a  set  of  assumptions  which  differs  from  the  Commission’s 
assumptions transmitted to Austria on 18 December 2024. In particular, the plan uses 
different assumptions for four variables, namely the starting position (in terms of the 
structural  primary  balance,  the  general  government  balance,  the  share  of  primary 

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expenditure  in GDP and  general  government  debt), potential GDP growth, real  GDP 
growth  and  the  GDP  deflator.  An  assessment  of  these  differences  in  assumptions  is 
provided below. 

The  differences  in  assumptions  with  the  most  significant  impact  on  average  net 
expenditure  growth  are  listed  below,  together  with  an  assessment  of  each  difference 
considered in isolation. 

-  The plan uses 2024 outturn data for the starting position. In 2024, the structural 
primary  balance  was  -2.4%  of  GDP,  the  general  government  balance  was  -
4.7%  of  GDP,  general  government  debt  was  81.8%  of  GDP  and  the  share  of 
primary  expenditure  in  GDP  was  54.8%.  This  contributes  to  a  lower  average 
net expenditure growth over the adjustment period of the plan than according 
to  the  Commission’s  assumptions.  The  reference  trajectory  was  based  on  the 
Commission  Autumn  2024  Forecast,  which  estimated  the  structural  primary 
balance  at  -1.3%  of  GDP,  the  general  government  balance  at  -3.6%  of  GDP, 
the debt level at 79.5% of GDP and the share of primary expenditure in GDP at 
52.9%.  Austria  is  using  the  latest  available  data  and  this  difference  is  duly 
justified.  

-  The plan assumes smooth potential output growth over the period 2025-2041. 
Compared with the Commission’s assumptions, this increases potential growth 
over  the  adjustment  period  and  therefore  contributes  to  higher  average  net 
expenditure growth.  Estimations of unobserved potential growth  are sensitive 
to the business cycle and it is plausible that the recession in Austria since 2023 
asserts a downward bias on estimated potential growth. The possibility to use 
alternative  potential  growth  assumptions  is  in  line  with  Article  36,  paragraph 
(1), point (f), of Regulation (EU) 2024/1263, provided that cumulative growth 
over  the  projection  horizon  (i.e.  up  to  2041)  is  broadly  in  line  with  the 
Commission’s  assumptions,  which  is  the  case  in  the  plan.  Consequently,  this 
assumption is deemed to be duly justified. 

-  The plan assumes real GDP growth to be lower than assumed in the reference 
trajectory. This is due to the worsening macro-economic outlook. However, the 
latest  forecast  from  the  independent  fiscal  institution  WIFO,  on  which  the 
Ministry  of  Finance  relies  for  budgetary  planning,  incorporates  a  fiscal 
consolidation effort of 1.2% of GDP in 2025. For the purpose of the plan, it is 
necessary  to  derive  the  baseline  growth  rate  that  would  have  occurred  in  the 
absence of this consolidation effort. To do so, Austria applied the Commission 
standard fiscal multiplier of 0.75 to the consolidation effort in percent of GDP 
and added this to the growth rate. This results in a baseline growth rate of 0.6% 
in 2025 without any fiscal consolidation, which is still below the growth  rate 
assumed  for  the  reference  trajectory.  In  the  plan,  Austria  commits  to  a  fiscal 
adjustment  of  0.5%  in  2025,  which  is  expected  to  lower  real  GDP  growth 
(based  on  the  standard  fiscal  multiplier  of  0.75)  to  0.2%.  Changing  the  real 
GDP  growth  rate  has  no  direct  effect  on  net  expenditure  growth.  All  things 
considered, this assumption is deemed to be duly justified. 

-  The plan assumes the GDP deflator to be 0.1 pp. higher in 2025 and 2026 than 
assumed  in  the  reference  trajectory.  This  contributes  to  higher  average  net 
expenditure  growth  over  the  adjustment  period  in  the  plan  than  according  to 
the  Commission’s  assumptions.  This  difference  results  from  higher  inflation 
expectations  in  the  latest  forecasts.  The  Commission  Spring  2025  Forecast 
assumes  significantly  higher  GDP  deflator  growth  in  2025  and  2026  than  is 

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assumed  in  the  plan.  Consequently,  this  assumption  is  deemed  to  be  duly 
justified. 

Overall,  all  the  differences  in  assumptions  taken  together  lead  to  an  average  net 
expenditure  growth  in  the  plan  that  is  broadly  in  line  with  the  reference  trajectory.  The 
Commission  will  take  into  account  the  above  assessment  of  the  plan’s  assumptions  in 
future assessments of compliance with the net expenditure path. 

Fiscal strategy of the plan 

(26)  According  to  the  indicative  fiscal  strategy  in  the  plan,  the  commitments  on  net 
expenditure will be delivered through both expenditure restraint and revenue increases. 
The  plan  describes  a  consolidation  of  EUR  6.4  billion  (1.3%  of  GDP)  in  2025  and 
additional  EUR  2.3  billion  (0.4%  of  GDP)  in  2026  in  line  with  the  Draft  Budgetary 
Plan  for  2025  and  2026.  Whereas  the  net  expenditure  path  in  the  plan  foresees  a 
roughly linear adjustment commitment, the fiscal strategy outlines a frontloaded fiscal 
adjustment. On the revenue side, this includes tax measures, contributions from state-
affiliated  companies  that  are  part  of  the  government  sector,  an  increase  in  dividend 
payments  from  state-affiliated  companies  that  are  not  part  of  the  government  sector, 
and  additional  social  contributions  that  would  total  EUR  2.0  billion  in  2025  and 
additional  EUR  1.6  billion  in  2026.  On  the  expenditure  side,  measures  include 
administrative  savings,  reduction  in  subsidies  and  structural  reforms,  which  would 
amount to EUR 5.0 billion in 2025 and additional EUR 1.7 billion in 2026. The federal 
government  also  plans  to  invest  EUR  0.6  billion  in  2025  and  additional  EUR  1.0 
billion  in  2026  to  boost  the  economy  and  address  challenges  in  areas  such  as 
employment,  healthcare,  sustainability,  education,  and  integration.  In  addition,  the 
budget  that  the  national  parliament  adopted  on  18  June  2025  specifies  the  policy 
measures through which the net expenditure commitment for 2025 and  2026 will be 
achieved.10 The specification of the policy measures to be adopted thereafter is to be 
confirmed or adjusted and quantified in the annual budgets. 

Set of reform and investment commitments in the plan to underpin an extension of the 
fiscal adjustment period  

(27) 

In the plan, Austria commits to a set of 14 reforms and investments, aiming to improve 
potential  growth  and  fiscal  sustainability,  in  order  to  underpin  an  extension  of  the 
fiscal adjustment period from 4 to 7 years. 

This  set  of  reforms  and  investments  is  composed  of  one  commitment  from  the 
Recovery and Resilience Plan (RRP) with additional specifications; as well as several 
new  reforms  and  investments.  This  includes  the  following  measures  (see  also 
Annex II): 

-  Reform  and  investments  in  education:  The  first  step  of  the  measure  is  a 
commitment  under  the  RRP  linked  to  component  3  (knowledge-based 
recovery)  that  includes  entry  into  force  of  the  legislation  on  establishing 
criteria  for  the  specification  of  the  socio-economic  baseline  of  schools.  In  a 
second  step,  a  socially  indexed  ‘opportunity  bonus’  will  provide  targeted 
support to individual schools. Based on the criteria established under the first 
step, additional funding will be made available for at the school level and will 
be  accompanied  by  continuous  monitoring.  The  key  steps  are  expected  to  be 

10 

See Commission Opinion of 23 June 2025 on the Draft Budgetary Plan of Austria.  

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implemented  in  the  fourth  quarter  of  2028,  following  implementation  of  the 
RRP  measure  in  the  fourth  quarter  of  2025  and  attribution  of  funding  in  the 
fourth quarter of 2026. 

-  Reform  in  the  healthcare  system:  The  reform  aims  to  contribute  to  a 
sustainable  healthcare  system  by  increasing  the  health  insurance  contribution 
rate for pensioners from 5.1% to 6%. The law is expected to be implemented 
by the third quarter of 2025. 

-  Reforms  in  the  pension  system:  The  reforms  aim  to  increase  effective 
retirement age and contribute to the sustainability of the pension system: (i) the 
reform of the first pension increase (‘Aliquotierung’) simplifies the calculation 
of the first pension increase to 50% of the adjustment regardless of the month 
of  retirement  in  the  previous  year  and  is  expected  to  be  implemented  by  the 
first quarter of 2026, and (ii) the reform of early retirement (‘corridor pension’) 
tightens  the  eligibility  conditions  by  raising  the minimum  retirement  age  and 
the years of contribution required and is expected to be fully implemented by 
the first quarter of 2029.  

-  Reform and investments in quality childcare: The measure introduces a second 
mandatory  year  of  childcare  in  kindergarten  and  extends  the  existing 
investment  support  system  for  municipalities  to  include  childcare  facilities. 
The measure is expected to be implemented by the third quarter of 2027. 

-  Reforms and investments in the labour market: The measures aim to strengthen 
the labour market through (i) the creation of a successor scheme to educational 
leave, aiming to provide opportunities for life-long learning especially for the 
low-skilled;  this  proposed  reform  replaces  an  earlier  version  of  educational 
leave which was abolished in March 2025 and is expected to be implemented 
by  the  second  quarter  of  2026,  (ii)  the  reform  and  digitalisation  of  the  ‘Red-
White-Red’  Card,  which  regulates  labour  market  access  for  third-country 
nationals, expected to be implemented by the first quarter of 2028, and (iii) a 
reform  of  supplementary  income  rules  in  the  unemployment  benefit  system, 
intended 
from 
unemployment  to  full-time  employment,  expected  to  be  implemented  by  the 
first quarter of 2026. 

transition  more  quickly 

to  provide  an 

incentive 

to 

-  Reforms in the tax system: These measures aim to improve the distribution of 
the  tax  burden  by  (i)  an  increase  in  the  gambling  tax  on  lotteries,  (ii)  an 
increase  in  the  concession  and  gambling  tax  on  electronic  lotteries,  (iii)  the 
harmonisation of taxation on share deals under real estate transfer tax, (iv) the 
introduction of a re-zoning surcharge on land sales, and (v) an increase in the 
foundation  tax.  The  measures  are  expected  to  be  implemented  by  the  first 
quarter of 2026. 

-  Reform in research and development: The reform will allow the recognition of 
internally  generated  intangible  assets  in  a  company’s  balance  sheet  under 
specific  circumstances,  improving  access  to  financing  for  innovative  firms, 
especially  start-ups.  The  measure  is  expected  to  be  implemented  by  the  first 
quarter of 2029. 

(28) 

In line with Article 14(3) of Regulation (EU) 2024/1263, each reform and investment 
underpinning  an  extension  of  the  adjustment  period  is  sufficiently  detailed,  front-
loaded, time-bound and verifiable.  

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(29)  The  RRP  commitments  underpinning  the  extension  contain  significant  reforms  and 
investments  aimed  at  improving  fiscal  sustainability  and  enhancing  the  growth 
potential of the economy. In addition, Austria commits to continuing the reform effort 
over the period covered by the medium-term fiscal-structural plan and maintaining the 
nationally financed investment levels realised over the period covered by the RRP (see 
below, Table 5). The commitments will be monitored throughout the implementation 
of the plan. Accordingly, commitments under the RRP can be taken into account for 
the  extension  of  the  adjustment  period  as  provided  by  Article  36(1),  point  (d),  of 
Regulation (EU) 2024/1263.  

(30)  The set of reforms and investments underpinning the extension is expected to improve 
the  growth  and  resilience  potential  of  Austria’s  economy  in  a  sustainable  manner  as 
required by Article 14(2), point (a), of Regulation (EU) 2024/1263. The plan provides 
quantitative  estimates  stating  that  the  reforms  will  increase  potential  GDP  over  the 
medium term by 0.8%. The pension reforms will raise the effective retirement age and 
the  plan  estimates  that  it  could  keep  11  000  people  longer  in  the  labour  force.  The 
reforms and investments in the labour market are expected to raise the activity rate and 
to strengthen the labour force. The reform of the ‘Red-White-Red’ card is estimated to 
lead  to  an  increase  in  the  labour  force  by  another  10 000  people.  The  reform  of 
supplementary  income  rules  in  the  unemployment  benefit  system  aims  at  creating 
better  incentives  to  take  up  employment.  This  is  expected  to  have  a  direct  effect  on 
potential  GDP  already  over  the  plan  horizon.  In  addition,  measures  focusing  on 
vocational training are expected to be beneficial for labour productivity. The measure 
supporting  research  and  development  expenditure  is  expected  to  support  total  factor 
productivity  over  the  medium  term.  Reforms  and  investments  in  education  and 
childcare are expected to have a positive short term effect improving parents’, and in 
particular  mothers’,  labour  market  participation.  Moreover,  in  the  long  run,  better 
education of children will be beneficial for society and the economy. Reforms in the 
areas  of  taxation  and  healthcare  aim  at  improving  fiscal  sustainability.  The 
assumptions  regarding  the  expected  growth  impact  of  the  reforms  and  investments 
underpinning an extension appear prudent and credible.  

(31)  The set of reforms and investments underpinning the extension is expected to support 
fiscal  sustainability  as  required  by  Article  14(2),  point  (b),  of  Regulation  (EU) 
2024/1263. The government expects an overall direct fiscal effect of the set of reforms 
and  investments  of  0.4%  of  GDP  in  2029.  The  main  direct  fiscal  effect  is  expected 
from  implementing  measures  related  to  social  security,  which  also  contribute  to 
addressing  fiscal  sustainability  risks  identified  by  the  European  Commission  in  its 
2025  Country  Report  on  Austria.  The  government  expects  to  achieve  a  direct  fiscal 
effect of 0.1% of GDP by increasing social security contributions for pensioners, 0.2% 
of  GDP  by  increasing  the  effective  retirement  age  and  less  than  0.1%  of  GDP  by 
limiting  the  indexation  of  pensions  to  50%  in  the  first  year  following  retirement.  In 
addition,  the  introduction  of  a  new  form  of  the  educational  leave  and  a  reform  of 
supplementary  income  rules  in  the  unemployment  benefit  system  are  expected  to 
generate a direct fiscal effect of less than 0.1% of GDP by 2029 via savings on social 
transfers and higher tax revenues due to improved employment. Measures in the area 
of taxation are expected to help close loopholes and generate a direct fiscal effect of 
0.1%  of  GDP  by  2029.  Other  measures  in  the  area  of  childcare  and  education  are 
meant  to  support  labour  supply  and  improve  educational  outcomes.  These  measures 
are also part of the fiscal consolidation package that is currently enacted by Austria, as 
mentioned above when presenting the fiscal strategy.  

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(32)  The set of reforms and investments underpinning the extension addresses the common 
priorities  of  the  EU  as  required  by  Article  14(2),  point  (c),  of  Regulation  (EU) 
2024/1263.  Several  measures  are  expected  to  contribute  to  social  and  economic 
resilience,  in  line  with  the  principles  of  the  European  Pillar  of  Social  Rights.  The 
reform of healthcare insurance contributions is expected to improve the resilience and 
sustainability  of  the  healthcare  system,  while  the  pension  reform  is  expected  to 
increase  the  effective  retirement  age,  benefitting  labour  supply  and  the  long-term 
sustainability  of  the  pension  system.  Reforms  in  quality  childcare  and  the  labour 
market  are  expected  to  contribute  to  employment.  Tax  reforms  are  expected  to 
improve  the  distribution  of  the  tax  burden.  In  addition,  the  reform  in  the  field  of 
research and development is expected to contribute to all common priorities of the EU, 
including  also  a  fair  green  and  digital  transition,  energy  security  and  defence 
capabilities, by supporting firms’ ability to raise money for research and development 
and to upscale activities.  

(33)  The  set  of  reforms  and  investments  underpinning  the  extension  addresses  the 
relevant11  Country-Specific  Recommendations  (CSRs)  issued  as  part  of  European 
Semester  as  required  by  Article  14(2),  point  (d),  of  Regulation  (EU)  2024/1263.  In 
particular, the set of reforms and investment underpinning an extension address CSRs 
related to:  

-  Active  labour  market  policies,  incentives  to  work  and  labour  market 
participation and skills (CSRs issued in  2019, 2020, 2022, 2023, 2024 and as 
repeated  in  2025)  through  the  expansion  of  mandatory  early  childhood 
education and care, the reform of educational leave and the ‘Red-White-Red’ 
card to grant third country nationals access to the labour market  
Improving  the  tax  mix  (CSR  issued  in  2025)  by  raising  taxes  on  gambling 
among others 

- 

-  Education (CSR issued in 2019, 2020 and 2025) through the extension of the 
RRP  measure  in  strengthening  the  capacity  of  schools  to  address  challenges 
based on social indicators to improve equal opportunities  

-  Measures in the area of childcare are intended to support women's participation 
in the labour market and contribute to tackling negative demographic trends, in 
line with 2025 CSRs on employment and social policy. 

(34)  The  plan  ensures  that  the  planned  overall  level  of  nationally  financed  public 
investment realised on average over the period covered by the RRP is maintained, as 
required by Article 14(4) of Regulation (EU) 2024/1263.  

11 

CSRs considered ‘relevant’ are recommendations: i) referred to in the Council Implementing Decision 
on the approval of the assessment of the recovery and resilience plan for measures included in the RRP 
and ii) adopted by the Council in 2025. 

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Table 5: Nationally financed public investment in the plan (% of GDP) 

Average 
level over 
the period 
covered by 
the RRP 
(2021 to 
2026) (12) 

3.8 

2025 

2026 

2027 

2028 

2029 

Average 
over the 
duration of 
the plan 

3.9 

4.1 

4.1 

4.0 

3.9 

4.0 

Source: Medium-term fiscal-structural plan of Austria 

(35)  Finally, the set of reform and investment commitments underpinning an extension can 
be  regarded  as  consistent  with  the  commitments  in  the  RRP  and  the  Partnership 
Agreement agreed under the Multiannual Financial Framework as required by Article 
14(4) of Regulation (EU) 2024/1263. The reforms concerning pensions  are proposed 
to be added to the Austrian RRP in the context of a revision after the submission of the 
plan.  

(36) 

In  conclusion,  the  set  of  reforms  and  investments  underpinning  the  extension  of  the 
adjustment period is assessed as fulfilling, taken altogether, the criteria in Article 14 of 
Regulation (EU) 2024/1263. As a result, the adjustment period can be extended from 4 
to 7 years, as put forward in the plan. 

Other reforms and investment intentions in the plan responding to the main challenges 
identified in the context of the European Semester and addressing the common priorities 
of the Union  

(37)  Besides  the  set  of  reforms  and  investments  underpinning  an  extension  of  the 
adjustment period,  the  plan describes  policy intentions concerning other  reforms  and 
investments  to  respond  to  the  main  challenges  identified  in  the  context  of  the 
European Semester, especially the CSRs, and to address the common priorities of the 
EU.  The  plan  includes  53  reforms  and  investments,  of  which  eight  are  financially 
supported  by  the  Recovery  and  Resilience  Facility  and  six  by  the  cohesion  policy 
funds.  The  plan’s  reforms  and  investments  are  based  on  an  existing  government 
strategy document13. 

(38)  Concerning  the  common  priority  of  a  fair  green  and  digital  transition,  including  the 
climate  objectives  set  out  in  Regulation  (EU)  2021/1119,  the  plan  includes 
investments in sustainable transport and green mobility infrastructure (partly included 
in  the  RRP)  aimed  at  reducing  emissions  in  particular  in  the  transport  sector.  These 
measures  are  expected  to  address  2019,  2020  and  2025  CSRs  on  transport. 
Furthermore, the plan contains measures aimed at improving digital skills, increasing 
the uptake of digital solutions in the health sector and targeting further deployment of 

12 

13 

It is assumed and accepted that the two periods will overlap. The requirement to maintain the level of 
investment is intended to apply to the years after the end of the lifetime of the Recovery and Resilience 
Facility. 
‘Jetzt  das  Richtige 
https://www.bundeskanzleramt.gv.at/dam/jcr:8d78b028-70ba-4f60-a96e-
2fca7324fd03/Regierungsprogramm_2025-2029.pdf  

tun.  Für  Österreich.  Regierungsprogramm  2025-2029’  available  at 

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broadband (included in the RRP). These measures are expected to address 2019, 2020, 
and 2025 CSRs on investment policy for the digital transition.  

(39)  Concerning  the  common  priority  of  social  and  economic  resilience,  including  the 
European Pillar of Social Rights, the plan includes a number of measures to mitigate 
skills shortages targeting a variety of people such as jobseekers, employees benefitting 
from  further  upskilling,  skilled  labour  migration  and  older  workers.  In  addition,  the 
plan  contains  reform  and  investment  measures  to  strengthen  the  healthcare  sector 
(including  strengthening  outpatient  care)  and  measures  targeting  the  expansion  of 
early  childhood  education  and  care  and  strengthening  the  educational  system  with 
additional  resources, increased school  autonomy  and  psychological  support (some of 
these measures are also covered by the RRP). To strengthen the competitiveness and 
productivity  of  the  Austrian  economy,  the  plan  also  includes  the  creation  of  an 
industrial strategy as well as commitments to reduce red tape, in particular for SMEs. 
The measures are expected to address the 2019, 2020 and 2025 CSRs related to active 
labour market policies, incentives to work and labour market participation, healthcare, 
education and business environment.  

(40)  Concerning  the  common  priority  of  energy  security,  the  plan  includes  investment 

measures to ensure security of gas supply (West-Austria-Gas-Pipeline).  

(41)  Concerning  the  common  priority  of  defence  capabilities,  the  plan  does  not  include 
other  reforms  or  investments  but  points  to  investment  needs  to  build  up  defence 
capabilities.  

(42)  The  plan  provides 

information  on 

the  consistency  and,  where  appropriate, 
complementarity, with the cohesion policy funds and Austria’s RRP. The plan briefly 
indicates  that  reforms  and  investments  included  in  the  plan  respond  to  the  main 
challenges identified in the context of the European Semester and address the common 
priorities of the Union, and are in continuity with the actions adopted in the RRP.  

(43)  The plan provides an overview of the public investment needs of Austria related to the 
common  priorities  of  the  EU.  In  relation  to  the  fair  green  and  digital  transition,  the 
plan  highlights  the  need  for  investments  in  renewable  energy,  climate  technologies, 
digital  infrastructure,  and  sustainable  mobility,  while  also  supporting  biodiversity, 
circular economy, and AI innovation. Furthermore, the plan includes the commitment 
to  a  transformation  fund  to  support  the  transformation  of  the  economy,  industry  and 
agriculture, aiming to create a one-stop-shop solution for all transformation support. In 
relation to social and economic resilience, the plan highlights the need for investments 
in  the  labour  market,  education,  health  and  long-term  care  and  affordable  housing, 
while  also  supporting  SMEs,  research  and  innovation  to  improve  productivity  and 
economic stability. In addition,  a Fund of Funds  will be created to  mobilise national 
and international venture capital to facilitate a better access of Austrian companies to 
growth  capital.  In relation  to  energy security, the plan highlights  the need to  expand 
energy  infrastructure  and  reduce  dependency  on  Russian  gas,  notably  through  gas 
pipeline  projects  and  electrification  efforts  to  ensure  long-term,  competitive,  and 
secure  energy  supply.  In  relation  to  building  up  defence  capabilities,  the  plan 
highlights  the  need  to  continue  to  implement  the  Austrian  Armed  Forces'  long-term 
development  plan,  ensuring  modernisation  and  military  build-up  within  fiscal 
constraints. 

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Conclusion of the Commission’s assessment 

(44)  Overall, the Commission is of the view that Austria’s plan fulfils the requirements of 

Regulation (EU) 2024/1263. 

OVERALL CONCLUSION 

(45) 

In accordance with Article 17 of Regulation (EU) 2024/1263, the net expenditure path 
as  set  in  the  plan  should  be  recommended  by  the  Council  to  Austria,  and  the  set  of 
reforms  and  investments  underpinning  the  extension  of  the  adjustment  period  to  7 
years should be endorsed. 

HEREBY RECOMMENDS that AUSTRIA:  

(1) 

(2) 

Ensure  that  net  expenditure  growth  does  not  exceed  the  maxima  established  in 
Annex I to this Recommendation. 

Implement  the  set  of  reforms  and  investments  that  underpins  the  extension  of  the 
fiscal  adjustment  period 
this 
Recommendation, by the indicated deadlines. 

to  7  years,  as  established 

in  Annex  II 

to 

In  addition,  the  Council  invites  Austria  to  ensure  the  delivery  of  other  reforms  and 
investments  responding  to  the  main  challenges  identified  in  the  context  of  the  European 
Semester, in particular in the country-specific recommendations, and addressing the common 
priorities of the Union. 

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

Years 

2025 

2026 

2027 

2028 

2029 

Growth rates 
(%) 

Annual 

Cumulative 
(*) 

2.6 

2.6 

2.2 

4.8 

2.2 

7.2 

2.0 

9.4 

2.3 

11.9 

(*) The cumulative growth rates are calculated by reference to the base year of 2024. 
The cumulative growth rates are used in the annual monitoring of ex-post compliance 
in the control account. 

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ANNEX II 
Set of reforms and investments that underpins an extension of the adjustment period to seven years 

Reform / investment 
Education 
(‘Opportunity bonus’) 
(RRP measure 91a and 
adding to RRP measure) 

Main objective 
Improve access to education through expanded 
school support differentiated according to social 
indicators  

Description and timing of key steps 
Step 1: Implementation of milestone 
91a under the RRP by Q4 2025 
Step 2: Attribution of funding by  
Q1 2026 
Step 3: First monitoring report by 
the Ministry of Education on the 
roll-out of the opportunity bonus 
(school year 2026/27) by Q4 2028 

Monitoring indicator(s) 
Step 1: Satisfactory  
fulfilment of milestones 91a of the RRP 
Step 2: Federal funding for opportunity 
bonus included in the budget for 2026 
Step 3: Monitoring report on the 
implementation of the opportunity bonus 
.  

Health insurance  
(new measure) 

Increase health insurance contribution for 
pensioners from 5.1% to 6%  

Implementation of the law by  
Q3 2025 

Entry into force of law increasing health 
insurance contributions for pensioners 

First pensions increase 
(‘Aliquotierung’) 
(new measure) 

Limit the first pension increase to 50% of the 
general pension adjustment in the first year 
following entry into retirement 

Implementation of the law by  
Q1 2026 

First pension increase at 50% of the 
general adjustment applied in January 
2026 for persons who retired in 2025 

Increase in effective 
retirement age  
(‘Corridor pension’)  
(new measure) 

Raise early retirement age from 62 years to 63; 
increase required contribution months from 480 to 
504 

Step 1: Law adopted by parliament 
Step 2: The legal entry age into ‘Corridor 
pension’ is 63 years  
Step 3: The required insurance periods to 
enter ‘Corridor pension’ are 504 months  

Step 1: Adoption of the law by  
Q3 2025 
Step 2: Implementation of the law. 
The legal entry age into early 
retirement (‘Corridor pension’) is 63 
years by Q2 2027 
Step 3: Implementation of the law. 
The required insurance periods for 
early retirement are 504 months by 
Q1 2029 

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Early childhood 
education and care 
(new measure) 

Introduce a second mandatory kindergarten year 

Labour market - 
educational leave  
(new measure) 

New regulation of educational leave to support 
specific company-relevant training targeted at low-
skilled workers with public funding 

Reform and digitalisation of the ‘Red-White-Red’ 
card giving access to the labour market to third-
country nationals (e.g., fast-track for post-doctoral 
researchers and care staff) 

Abolishment of the possibility to earn 
supplementary income while receiving 
unemployment benefits (with exceptions); intended 
to provide an incentive to transition more quickly 
from unemployment into full-time employment 
Raise gambling tax on lotteries from 16% to 17.5% 

Raise concession and gambling tax on electronic 
lotteries from 40% to 45% 

Labour market - access 
for third-country 
nationals  
(‘Red-White-Red’ card) 
(new measure) 

Reform of 
unemployment benefits 
(new measure) 

Lottery tax 
(new measure) 
Concession and lottery 
tax for electronic 
lotteries  
(new measure) 
Real estate taxation 
share deals 
(new measure) 

Real estate taxation 
upzoning gains 

Step 1: Allocation of additional 
funding for Länder (federal states) 
from federal budget by Q1 2026 
Step 2: Second kindergarten year is 
implemented in all Länder by  
Q3 2027 
Step 1: Adoption of the law by  
Q1 2026 
Step 2: Implementation of the law 
by Q2 2026 
Implementation of the law 
reforming the criteria underlying the 
‘Red-White-Red’ card and 
digitalisation of the ‘Red-White-
Red’ card by  
Q1 2028 

Implementation of the law by  
Q1 2026 

Step 1: Budget provision for federal 
funding made 
Step 2: Second kindergarten year 
implemented in all Länder via 15a 
agreement between federal level and 
Länder 
Step 1: Law adopted by parliament 
Step 2: Entry into force of educational 
leave 

 Entry into force of reformed criteria and 
digitalisation of the ‘Red-White-Red’ 
card 

Entry into force of abolishment of the 
possibility to earn supplementary income 
while receiving unemployment benefits 
(with exceptions) 

Implementation of the law (budget 
accompanying law) by Q1 2026 
 Implementation of the law (budget 
accompanying law) by Q1 2026 

Entry into force of law increasing 
gambling tax on lotteries 
Entry into force of law increasing 
concessions and gambling tax on 
electronic lotteries 

Close the possibility of circumventing real estate 
transfer tax through ‘share deals’; if 75% or more of 
the shares in a real estate-owning company are 
transferred, real estate transfer tax will become due 
Introduce 30% zoning surcharge on gains from land 
reclassification at point of sale via capital gains tax 

Implementation of the law (budget 
accompanying law) by Q1 2026 

Entry into force of law for the taxable 
event for changes in shareholders and 
share mergers for real estate purposes 

Implementation of the law (budget 
accompanying law) by Q1 2026 

Entry into force of law introducing a real 
estate transfer surcharge 

EN 

17 

EN 

 
 
 
(new measure) 
Foundation donation tax 
(new measure) 
Research & Development 
– capitalise internally 
developed R&D costs 
(new measure) 

Done at Brussels, 

Raise tax rate for donations to foundations from 
2.5% to 3.5% 
Allow the recognition of internally generated 
intangible assets in the balance sheet under specific 
circumstances 

Implementation of the law (budget 
accompanying law) by Q1 2026 
Step 1: Adoption of the law by  
Q4 2027 
Step 2: Implementation of the law 
by Q1 2029 

Entry into force of law increasing the tax 
rate on donations to foundations 
Step 1: Law adopted by parliament 
Step 2: The law applies to financial years 
beginning on or after 1 January 2028. 
The corresponding annual financial 
statements will be disclosed the 
following year 

For the Council 
The President 

EN 

18 

EN