2006 Budget: Themes and Lines of Development in a Long-Term View

The 2006 federal budget is marked by the fiscal effects of the 2004-05 tax reform as well as ongoing high unemployment. Accordingly, the federal Maastricht deficit will decline only slightly (to 2.2 percent of GDP). By 2008, a balanced budget is to be achieved for the general government: the states and local governments are to produce a surplus of 0.75 percent of GDP, and the federal government is to reduce its Maastricht deficit to 0.75 percent of GDP. At the same time, revenue and expenditure ratios at federal and overall level are to be further reduced. The budgetary goals up to 2008 call for realising and implementing the existing plans to curtail spending dynamics, especially by reforming public administration, the health care sector, and the division of responsibilities between the levels of government.