EU Launches Excessive Deficit Procedures Against Austria, Romania for Budget Breaches

The European Commission has launched an Excessive Deficit Procedure against Austria due to its budget deficit exceeding the EU's 3% of GDP limit, with projections showing deficits above 4% for 2025 and 2026. Austria's economic struggles, including weak external demand and political instability, have led to shrinking income and tax revenues, forcing the government to abandon efforts to meet EU budget rules. Austria's coalition government acknowledges that reducing the deficit below 3% in the short term would harm the economy and employment. The Commission's disciplinary measures could eventually lead to fines if Austria fails to correct its deficit within the set timeframe. Meanwhile, Romania is also under intensified EU fiscal scrutiny for breaching budget rules with a deficit well above the 3% limit, risking suspension of EU cohesion and post-pandemic funds if corrective actions are not taken. Both countries face formal decisions on their fiscal situations in upcoming EU finance minister meetings.