Austria’s long-awaited budget negotiations are finally set to begin this week, marking a crucial moment for the country’s three-party coalition government, according to Austrian Press Agency. After the Easter break, Finance Minister Markus Marterbauer, joined by State Secretaries Barbara Eibinger-Miedl and Josef Schellhorn, will begin the first round of meetings with cabinet ministers.
These talks come at a particularly sensitive time. The government is preparing a double budget, covering the next two years, in an effort to set a clear financial path early. While this gives Austria a stronger medium-term plan, it also adds pressure, as the budget is being drafted much earlier than usual.
The challenge is made even greater by the ongoing international energy crisis, which continues to cast a shadow over economic growth. Fresh spring forecasts from Austria’s leading economic institutes, WIFO and IHS, expected later this week, are likely to shape the direction of the discussions.
There is, however, a small note of relief. Austria’s 2025 budget deficit turned out slightly better than expected. Instead of reaching 4.5 percent of gross domestic product, the final figure stood at 4.2 percent. Still, the government expects the deficit to remain at a similar level in 2026.
The long-term goal is clear: by 2028, Austria wants to bring the deficit down to 3 percent of GDP, the limit required under European Union fiscal rules, and thereby exit the EU’s deficit procedure.
Yet reaching that goal will not be easy. Finance Minister Marterbauer has openly stated that the country still needs around two billion euros in additional savings or revenue. This is on top of already planned spending cuts and subsidy reductions stretching through 2029.
Each coalition party is entering the talks with its own priorities. The ÖVP and NEOS are pushing for lower labor costs to support jobs and business competitiveness. The SPÖ wants stronger investment in healthcare and labor market policies, while the NEOS continue to prioritize education reforms.
The central question remains how to pay for these promises. Marterbauer has made his position clear: every new spending plan must be matched by savings elsewhere or fresh sources of revenue.
Possible measures include tax adjustments, cuts to subsidies, or delays in certain spending programs. But many proposals remain politically sensitive, with deep disagreements among coalition partners.
With the budget speech set for June 10 and a parliamentary vote scheduled one month later, the coming weeks are likely to bring intense negotiations, difficult compromises, and defining choices for Austria’s economic future.
