Austria is grappling with a significant budget deficit, necessitating savings of up to 5.6 billion euros by 2025 to comply with EU fiscal rules.

The coalition of ÖVP, SPÖ, and Neos is exploring limited options for budget consolidation, as outlined by the Fiscal Council.

The government faces a choice: implement immediate austerity measures or risk an EU deficit procedure, which could offer a less stringent correction path.

Criticism has arisen over the ÖVP's handling of budget forecasts, with accusations of relying on flawed economic assumptions.

The debate continues on whether to cut spending or introduce new taxes, with the potential removal of the climate bonus as a notable consideration.

The urgency to address the deficit is compounded by the risk of market penalties for rising national debt.