Austria Gears Up for Another Tough Round of Cuts in 2027–2028 Budget
VIENNA — Austria is staring down yet another austerity package. Finance Minister Markus Marterbauer (SPÖ) made it clear in a candid Krone interview: as work starts on the 2027/2028 double budget, the country needs to find an extra one to two billion euros in savings to stay on course with EU deficit rules.
The Fiscal Council recently sounded the alarm, questioning whether existing measures will really bring the budget deficit below three percent of GDP over the medium term. Among the ideas floating around: scrapping the popular family bonus, tweaking VAT rates, and trimming pension costs. None of those will win popularity contests.
Still, Marterbauer strikes an upbeat note. “Of course we need more savings, there’s no denying it,” he said. “I’m actually glad the Fiscal Council put forward concrete suggestions. We’ve got our own long lists of options ready in the ministry.” He’s confident the three percent target remains reachable, especially since the new savings target looks modest next to recent efforts. “We’re already cutting nine billion euros in 2026 through spending reductions and tax hikes. For 2028, we’re talking up to two billion. That’s a very different dimension.”
One big shadow hangs over everything: the war raging in Europe. Marterbauer called it “unnecessary and frankly stupid,” warning that a prolonged conflict could wreck economic recovery, keep inflation volatile, and force painful course corrections. “The economy is picking up again, inflation is down to just over two percent, and fiscal repair is on track,” he added. “But if this war drags on, it becomes extremely dangerous for all of us. We’re urging everyone involved to end it now.”
Elsewhere, the minister drew a firm line against Defense Ministry requests for billions to replace aging Eurofighters. “Ten billion euros on new jets would mean saying goodbye to any meaningful payroll-tax relief for workers,” he said bluntly. “What’s already agreed in the financial framework will stand no extra billions.”
Tensions with provincial governors linger after some sharp exchanges, but Marterbauer brushed off calls for an apology, insisting the stability pact was handled correctly in his ministry.
Healthcare spending is set to climb as the population ages, so efficiency gains without hurting care quality will be essential. With the WIFO’s spring forecast due soon, uncertainty remains high, but the minister insists Austria is still on a solid path, even if the road ahead feels bumpier than hoped.
