Austria targets sub-3% deficit in rare five-day sitting

Austria’s National Council convened on Monday for its first consecutive five-day plenary session since 1993 to debate and vote on a sweeping legislative package. The central focus is a two-year budget designed to reduce the national deficit below three percent of GDP by 2028.

Reaching that threshold is critical for Austria to maintain compliance with EU fiscal rules. To get there, the coalition government of the People's Party, Social Democrats and NEOS is pushing through revenue-raising measures alongside targeted spending cuts. Wednesday’s Budget Accompanying Act details a new €2 parcel tax, increased penalties for speeding, and a higher alcohol tax.

Expenditure is being curtailed through significant cuts to university funding, partially offset by providing families with a second free year of kindergarten. Politicians' salaries will also see a small increase.

The most immediate threat to the fiscal plan comes from a political standoff over pension reform. The government wants a constitutional amendment to cap pension increases at €204.44 in 2027, extending this limit to certain special public-sector pensions managed by federal states.

Because the amendment alters state powers, it requires a two-thirds majority. The Greens are currently withholding support. The party's social affairs spokesperson, Markus Koza, said approval depends on "serious and targeted negotiations on a fair contribution from 'luxury pensions' towards budget consolidation". With the FPÖ also opposing the measure at the committee stage, the government lacks the necessary votes.

Lawmakers have until the end of the year to resolve the impasse, potentially pushing the final pension vote to the autumn session. In the meantime, MPs are advancing other economic and regulatory measures.

Austria is implementing an EU consumer protection directive that bans misleading environmental claims and outlaws products with artificially limited lifespans. This aligns Austrian market regulations with broader European consumer rights standards.

The agenda also includes altering vehicle inspection intervals to four years after initial registration and ending exemptions for vehicles brought by displaced Ukrainians. Additionally, the government is adopting its first Africa strategy to shift away from a traditional donor-recipient model toward interest-driven partnerships "on an equal footing".

Legislative changes will also enshrine the legal status of six recognised ethnic groups—including the Croatian, Slovenian, Hungarian, Czech, Slovak and Roma minorities—into constitutional law. Separately, the government is restructuring bilingual courts in southern Carinthia to address growing difficulties in recruiting Slovenian-speaking staff. Several smaller district courts will merge into larger judicial districts, though hearing days will be maintained in Ferlach and Bleiburg, and bilingual centres of expertise will operate in Klagenfurt and Völkermarkt.