The EU Commission wants to make debt reduction more flexible and more responsive to the individual circumstances of EU countries. Maastricht’s upper limits for a maximum deficit of 3 percent and 60 percent of total debt remain unchanged, Brussels authorities announced today.
However, EU countries are required to submit national plans through which they work out the objectives of their fiscal policy, debt reduction measures, reforms and investments for a period of four years.
She added that these plans will be evaluated by the EU authority and approved by member states on the basis of common EU standards. The EU Commission wants to define a “technical target path” for each EU country that goes beyond the Maastricht criteria.
The EU Commission had already outlined its plans for this in the fall. European Commission Vice-President Valdis Dombrovskis and Commissioner for Economic Affairs Paolo Gentiloni presented the specific proposals in Brussels today.
Austria does not comply with deficit and debt regulations
Austria is currently in compliance with neither deficit nor debt regulations. Finance Minister Magnus Brunner (ÖVP) has been confident lately. Bronner said at the beginning of March that the target is 1.6 percent new debt by 2026 and a debt ratio toward 70 percent of economic output. Above all, Austria has campaigned for Maastricht standards to be retained.
The federal government will inform the EU Commission of a planned deficit of 3.2% or 15.4 billion euros for 2023. Only from next year, the stabilization program shows a significant decrease to 1.3 percent of GDP in 2026.
The debt ratio is expected to decline from 77 percent of GDP this year to 71.4 percent in 2026, just above the 2019 rate (70.6 percent) before the COVID-19 pandemic and energy crisis.
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