On Austria's Fiscal Problems

In October of 1995, the Austrian federal government was not able to agree on a budget proposal for 1996; as a result, the coalition government broke up, and general elections were called for December 1995. A provisional budget will be in effect until the late winter or spring of 1996 when it might be possible for the new government to present a new budget proposal. The budget situation has posed serious political problems in a number of Western European countries. In the OECD area, general government gross debt as a percentage of GDP has risen from 41 percent at the beginning of the 1980's to about 75 percent in 1995. Net interest payments for public debt as a share of GDP rose from 2 percent to 5 percent. Against this background, the imbalance regarding Austria's public finances is relatively minor: interest payments for public debt amount to 3.5 percent in 1995; general government gross debt totals 68.5 percent of GDP.