Spindelegger concept ‘imprecise and wrong’

A leading Social Democrat (SPÖ) has rejected the People’s Party’s (ÖVP) latest suggestions to economise.

ÖVP boss Michael Spindelegger said yesterday (Thurs) that the state could save “more than 10 billion Euros” altogether by 2016 by reducing certain investments. Spindelegger made clear that the agricultural sector would not be spared from austerity measures. However, the conservative party is expected to mainly focus on the budget of debt-stricken Federal Railways (ÖBB) and reform of Austria’s healthcare sector.

Now Laura Rudas dismissed the vice chancellor’s claims. The SPÖ general secretary told the Kurier today that it was impossible to save two billion Euros a year by setting the focus on spending less. Rudas said new taxes were needed to restore the financial household of the country. She pointed out that austerity measures affecting public institution’s administration would have an impact on the budget in a few years’ time only even if they were introduced later this year.

Rudas criticised the ÖVP’s plans as “not very precise”. She accused her party’s coalition partner of focusing on labelling the SPÖ as a party willing to do nothing but jacking up various taxes. Rudas said earlier this week that “all experts” agreed that the country’s budget could not be restored just by spending cuts – despite the high potential considering the 15 billion Euros Austria splashes out on various subsidies each year.

The SPÖ’s general secretary claimed today she knew of several ÖVP members who agreed that the focus must not be purely on slashing investments. SPÖ President of the Parliament Barbara Prammer said yesterday an increase of Austria’s maximum tax rate would be a “legitimate measure”. The former minister for women warned that Austria’s “weak” must be protected from being forced to bear a worse tax burden in the next few years than today.

Spindelegger announced yesterday that he was determined to find out why the workforce level of outsourced companies had leapt in the past years. ÖVP whip Johannes Rauch said creativity considering spending reductions was needed instead of “tax hike fantasies”. ÖVP Finance Minister Maria Fekter appealed to the opposition to approve the government’s debt brake draft bill. Economists confirmed that the measure would be considered as credible and reasonable by credit rating agencies and other influential financial sector analysts.

The government agreed to introduce a debt brake in November to shield Austria from negative effects of a potential worsening of the economic climate in Europe. It passed a debt limit regulation with its simple majority in the parliament last month but wants at least one of the country’s three main opposition movements to approve a constitutional debt limit law.

The Freedom Party (FPÖ), the Greens and the Alliance for the Future of Austria (BZÖ) currently disapprove of the project for various reasons. However, all three opposition factions agree that the coalition must settle its dispute about what to do to improve the budget in the coming years.

Austria is only one of six Eurozone members which are given an AAA mark, the highest possible credit rating. The group of countries which use the Euro grew to 17 over the years. Karl Aiginger, head of the Institute for Economic Research (WIFO), said he was certain that the Eurozone would have “a few more members” in 10 years’ time. Speaking to the Kurier, Aiginger also said the Eurozone needed clarity about how countries could exit it. He added that regulations avoiding a negative impact on economically solid members were of great importance as well.