Austria faces significant financial challenges, with record national debt largely attributed to ongoing COVID-19 relief efforts. The Freedom Party (FPÖ) and the Austrian People's Party (ÖVP) are negotiating potential coalition strategies to address this issue.
The country is projected to incur annual debts equivalent to four percent of its Gross Domestic Product (GDP), amounting to approximately 20 billion euros. The coalition aims to avoid an EU deficit procedure while restoring budget balance.
A key aspect of their proposed measures includes cuts to climate protection initiatives, notably the elimination of the climate bonus designed to offset the CO2 tax. Critics argue that this bonus was poorly targeted and exceeded the CO2 tax itself.
Approximately two-thirds of the proposed measures involve spending cuts, while one-third would introduce new taxes. Targeted areas include tobacco, gambling, and digital services taxes for tech companies.
The proposed cuts may disproportionately affect lower-income individuals and climate protection efforts. The removal of climate subsidies for photovoltaic systems and electric vehicles has raised concerns about compliance with EU climate regulations.
During coalition discussions, budgetary issues have emerged as particularly contentious. However, negotiations are progressing smoothly, with the ÖVP appearing to concede to FPÖ demands. Observers note the ÖVP's concern over potential fragmentation within its ranks, emphasizing the importance of maintaining power.
In a related political development, elections are set to take place in Burgenland, Austria's smallest federal state, where the Social Democratic Party (SPÖ) has maintained control for 60 years. This election will be closely watched as the SPÖ faces challenges from the FPÖ's rising influence.