Fekter: "Our austerity measures must be far more ambitious than before"
Fekter announces austerity path, but does not consider Austria's triple-A rating to be in acute danger
Press Release, 14 November 2011
Basically, there exists no risk of downgrading by the rating agencies. "Our economic statistics are sound," declared Finance Minister Dr Maria Fekter, although she added this warning: "We are not adhering to the EU rules on deficit reduction; we are dragging our feet too much over the deficit. We will have to get a move on with our austerity measures if we want to keep our triple-A rating. Our spreads (interest on government bonds) have recently widened against German spreads. We were always closely in line with Germany, but now the difference has increased and that could be dangerous as far as our rating is concerned."
Fekter adds that anchoring a debt brake in the Austrian constitution will send a strong signal within Europe in the battle against the growing debt mountain. "The text of the law is ready, and is in the process of undergoing government approval. After that, the Austrian regional governments and opposition will have to get on board. The debt brake should be adopted by Parliament before the end of the year," concludes Fekter on an optimistic note.
"We will go full speed ahead," assures Fekter further, explaining that an austerity path rather than a mere austerity package was being adopted. "At the start of 2012, I will be negotiating the budget consolidation path for 2013 to 2015 with all federal ministries, and let me state now: it will be an austerity path. Our austerity measures must be far ambitious than before," declared Fekter, explaining that the task was to save wisely, i.e. not on future investments, but in places where the EU and the OECD advised governments to make savings: on early retirement, the Austrian Federal Railways, the healthcare system and subsidies. "Above all, this means that early retirement must no longer be attractive, the actual retirement age must rise significantly, and the administration, every ministry, must save money. And we need to head towards a zero deficit as fast as the Germans," the Finance Minister clarified, adding that only through these measures could Austria be led out of crisis and emerge stronger as a result.