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Vienna, 15 November 2011 “Brake” on state debt to be enshrined in Austrian constitution Fekter: “Intelligent austerity that provides an impetus for growth and sets a targeted course for future action.”

At a meeting of the Austrian cabinet on 15 November 2011, the government resolved to enshrine a “debt brake” in the Austrian constitution. That constitutional provision is intended to ensure that, beginning in 2017, the structural deficit may not exceed 0.35% of Austrian GDP. The constitutional amendment is to stipulate that by 2020, the ratio of state debt to GDP must be less than 60%. Austrian’s current ratio lies at 75%.

This will only be possible by adhering to a strict austerity programme in coming years. “The first thing we must do is to ensure that we get our deficit down to zero, in other words that we do not run up any further new debt. We have charted a very clear course in that regard”, Austrian Finance Minister Dr. Maria Fekter stated. However, she said, the goal is also one of generating growth. “We want to generate greater tax revenues through economic growth and full employment, because it is clear that we will only achieve our goals if there is good growth of the economy”, she added. For that reason, the government has to proceed with caution, she said, particularly in light of the weakness of the economy that we are now starting to see. “We have to go on the offensive and take future-oriented action in order to ensure that what we end up with a balanced, stable overall concept”, the minister emphasised.

In response to the question of where cuts should be made, Fekter said: “We have to look at the groups in our budget that make up the biggest expenditures and apply the brakes on those with particular force – one such area is early pensions, but another is the area of healthcare”. She said that a programme of intelligent austerity has to be implemented so that Austria can become financially more “fit for the future”. “These measures are the only way our country can exit this crisis in better shape than it was in before”, Fekter concluded.