[ad_1]
At € 38 billion this year and another € 22 billion next year, the economic fallout from the corona pandemic is driving a huge hole in public finances.
“This deterioration in Austria’s fiscal indicators will keep us busy for a long time,” Martin Kocher, chairman of the Fiscal Council and director of the Institute for Higher Studies (IHS), said yesterday at an online press conference. These sums not only include billions of dollars in aid from the government, but also the effects of the huge economic recession.
As for reducing the budget deficit or the national debt, Kocher said: “It makes no sense to make a precise plan now.” First, the pandemic must be overcome. If this is successful in the summer of next year, then it would be advisable to go back below the Maastricht limit of three percent on the budget deficit in 2023. “You have to be pragmatic now,” Kocher said. Kocher sees no need for austerity packages if the already familiar structural problems are addressed in the next few years. He cited as examples the pension system, but also a reform of the federal system to combine tasks and expenses in one hand.
The government is accommodating that budget surpluses were achieved in 2018 and 2019. This has increased the scope of aid measures, Kocher said. Although the national debt is increasing significantly, Austria will pay 400 million euros less interest on these debts per year. That also reduces pressure.
Don’t let the churches down
The Fiscal Council recommends that the “municipal investment activity” be maintained. In other words, it is imperative that communities have money so they can continue to invest, says Kocher.
Article of
Hermann Neumüller
Economy editor
