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Austria announces coronavirus aid package, ditches deficit target

2 Mins read
imageEconomy1 hour ago (Mar 14, 2020 08:08AM ET)

Austria announces coronavirus aid package, ditches deficit target

By Francois Murphy

VIENNA (Reuters) – Austria is making 4 billion euros ($4.4 billion) immediately available to deal with the economic fallout from the coronavirus pandemic, the conservative-led government said on Saturday as it ditched a central pledge to balance its budget.

Austria has closed its borders to most arrivals from neighboring Switzerland and Italy because of the coronavirus outbreaks there and is in the process of implementing measures to slow the disease’s spread, shutting schools and most shops other than those selling food and medicine.

“A balanced budget is always important, but Austrians’ health, jobs and a stable economy is more important,” Finance Minister Gernot Bluemel told a government news conference, referring to his and fellow conservative Chancellor Sebastian Kurz’s top economic target.

The initial 4 billion euro “corona crisis fund” would cover items such as bridge loans and credit guarantees to shore up businesses’ liquidity, Kurz said. Help with shortening working hours for staff and deferring taxes would also be provided.

“It will not be the last measure that we take in this area, but it is the first quick, necessary measure to react immediately,” Kurz said.

Bluemel is due to give a budget speech on Wednesday. He said that instead of focusing on balancing the books his budget would spell out “the bitter truth of this crisis”, and be aimed primarily at helping the country overcome it.

In the past, Bluemel and his party have opposed any move toward more flexibility on the European Union’s deficit rules.

In January, the month in which Bluemel’s conservatives struck a coalition deal with the Greens and returned to power, he said he opposed any loosening of those EU budget rules, even to enable spending on climate measures.

But in light of the coronavirus pandemic the European Commission, which enforces those rules, has said it will give member states flexibility on budget deficits and state aid.

Austria has had 602 confirmed coronavirus cases and one death so far, and the disease is spreading fast. Italy, across the border, has more than 17,000 cases and 1,200 deaths.

The disease first reached Austria from Italy, and the mountainous west of the country wedged between Italy and Germany has been hardest hit. The ski resort of St Anton am Arlberg and the whole valley of another top resort, Ischgl, were put under quarantine on Friday because of clusters there.

Another resort town, Heiligenblut, was put under quarantine on Saturday. Anyone who has been to those towns since Feb. 28 or has been in contact with those people must self-isolate for 14 days, Kurz said.

Austria announces coronavirus aid package, ditches deficit target

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