What’s the EU’s response to Germany and France’s Pact-busting spending habits? Why, they’re picking on Austria:
Austria, which criticized Germany and France last year for surpassing European deficit limits, should cut spending to meet its goal of balancing its own budget in the “medium term,” the European Commission said Wednesday.
Currently, Austria’s deficit runs 1.3% of GDP — less than half the 3% limit allowed by the Stability and Growth Pact. Germany, who insisted on the Pact as a condition of giving up the Deutschmark, ran up to 3.8%. France’s deficit stood at 4% of GDP last year.
Both countries demanded — and got — the Pact suspended, and fines waived, until at least 2005. But only for themselves. So what’s Austria’s great sin? Read on:
“Sizable” income tax cuts will cause the deficit to widen to 1.5 percent of GDP in 2005, higher than the 0.2 percent that is expected by the commission, the executive arm of the European Union.
And we all know what the EU thinks of tax cuts.
Makes you wonder if the Austrians are enjoying their postmodern Anschluss.