Austria Goes for Debt Brake as Spreads Over Bunds Hit Record
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Austria’s cabinet today signed off a draft law for a debt brake to cut its debt level to 60 percent of gross domestic product by 2020 as the yield spread on the Alpine republic’s 10-year bonds widened to a euro-era record.
The draft law, which is modeled on German regulation, aims for the structural deficit not to surpass 0.35 percent of GDP as of 2017, Chancellor Werner Faymann told reporters in Vienna today. In order to meet the debt-brake criteria, about 2 billion euros ($2.7 billion) of the structural deficit must be cut every year, Faymann said.