Austria

VII - Six-Pack

The ‘Six-Pack’ is a package of six legislative measures (five regulations and one directive) improving the Economic governance in the EU. The Commission made the original proposals in September 2010. After negotiations between the Council and the European Parliament, the package was adopted in November 2011 and entered into force on December 13, 2011. Part of the ‘Six-Pack’ measures applies only to the Eurozone member states (see the individual titles below).   
The ‘Six-Pack’ measures reinforce the Stability and Growth Pact (SGP), among others by introducing a new Macroeconomic Imbalances Procedure, new sanctions (for Eurozone member states) and reversed qualified majority voting. Also, there is more attention for the debt-criterion.   
(
http://ec.europa.eu/economy_finance/economic_governance/index_en.htm)

Negotiation
VII.1
What positions did Austria adopt in the negotiation of the ‘Six-Pack’, in particular in relation to the implications of the ‘Six-Pack’ for (budgetary) sovereignty, constitutional law
, socio-economic fundamental rights, and the budgetary process?

Background information is necessary for answering this and the subsequent questions of this section: For better “handling of EU membership”, a law on constitutional level had been adopted in 1998[1] (BGBl I 61/1998). Art. 1 (1) stipulates that institutions on federal, provincial and municipal level were entitled to conclude a consultation mechanism and a stability pact among each other. Art. 1 (3) of above-quoted law stipulates that the stability pact regulates the obligations of the territorial entities regarding the compliance with the criteria set out in (then) Art. 104c TEC by the public Austrian budgets, especially with regard to the rules of secondary law on budgetary discipline; the pact, which implements the economic pillar of the EMU, has to create a rule for the distribution of burdens among the federal, the provincial and the municipal level. The pact is an agreement concluded between the three levels of government and then, on each level, it is implemented (as federal law, as provincial constitutional law, as municipal law). Without getting too much in depth here, Art. 1(3) of that law has to be interpreted in a way that it allows implementation of EU secondary law without constitutional amendment, even when it completes or amends Austrian budgetary law and even if that amounts to a constitutional amendment.[2] The disputed Austrian principle of “double obligation” of the legislator (according to which the application/implementation of EU law has to be equally conform with EU-law and with the Austrian constitution – that needs to be changed in case of conflict”)[3] does not play a role in the case of that specific law (BGBl I 61/1998).[4] Therefore, the implementation of the Six-Pack does not need any formal constitutional amendment even if its content amends the constitution. This is relevant for the discussion of the ratification of the Fiscal Compact that will be discussed in question IX.3.

Consequently, whereas the Austrian Stability Pact 2011[5] already referred to the crisis and measures necessary for budgetary stability, the Austrian Stability Pact 2012[6] directly refers to the Six-Pack (and also to the Two-Pack). Nota bene that elements of the Six-Pack, the Two-Pack and the Fiscal Compact had already been implemented through amendments of the federal budgetary law through which a deficit ceiling based on the German model had been introduced[7] and through a law on upper limits of federal guaranties.[8] The Austrian Stability Pact 2012 was approved two days after the Fiscal Compact (that will be discussed in section II.6) had been approved by the National Council. The discussion in the National Council relates to the preceding discussion on the Fiscal Compact and simultaneously to the amendment of the “Finanzausgleichsgesetz”, the law on “burden-sharing in financial matters” between the single territorial entities that needs to be amended for the new Austrian Stability Pact.[9] In a nutshell, at least from an observer’s perspective, the discussion on the Six-Pack was more centred on the distribution of the burden between the different territorial entities than on its actual content.

In the negotiations, the governing parties SPÖ and ÖVP favour the Austrian Stability Pact. The entire debate is limited to the issues of the reasonability of the deficit ceiling and on the question how the single territorial entities should comply with it – and share the burden. The Greens who were already opposing the Fiscal Compact now oppose the amendment of the burden-sharing law and are against the approval of the Austrian Stability Pact because they consider a debt limit for all territorial entities, especially municipalities, as contra-productive.

In sum, however, the National Council authorizes the government to conclude the Austrian Stability Pact 2012 with the provinces and the municipalities. The SPÖ and ÖVP vote for, the Greens, the FPÖ and the BZÖ against the approval.[10] The amendment of the burden-sharing law is also approved.[11]

Directive 2011/85/EU       
Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States

Implementation
VII.2
What measures are being taken to implement Directive 2011/85/EU on requirements for budgetary frameworks (required before 31 December 2013, article 15 Directive 2011/85/EU)?

The directive was implemented through the Austrian Stability Pact 2012 explained in question VII.1, particularly its Art. 12, but also Art. 17 regarding information requirements.[12] Overall, the Stability Pact is aimed at budget deficit avoidance and should lead Austria to “zero deficit” in 2016.[13]

Implementation difficulties 
VII.3
What political/legal difficulties
did Austria encounter in the implementation process, in particular in relation to implications of the directive for (budgetary) sovereignty, constitutional law and the budgetary process?

Its implementation was discussed in the framework of the Austrian Stability Pact 2012 and the question of burden-sharing explained in question VII.1.

Macroeconomic and budgetary forecasts     
VII.4
What institution will be responsible for producing macroeconomic and budgetary forecasts (article 4(5) Directive 2011/85/EU)? What institution will conduct an unbiased and comprehensive evaluation of these forecasts (article 4(6) Directive 2011/85/EU)?

The Bundesanstalt Statistik Austria (Federal Austrian Institute for Statistics) is charged with providing the necessary information, data, and decision making basis to comply with all obligations of the Austrian Stability Pact 2012.[14]  

Fiscal Council  
VII.5
Does Austria have in place an independent Fiscal Council (article 6(1) Directive 2011/85/EU: ‘independent bodies or bodies endowed with functional autonomy vis-à-vis the fiscal authorities of the Member States’)? What are its main characteristics? Does Austria have to create (or adapt) a Fiscal Council in order to implement Directive 2011/85/EU?

The predecessor of the Austrian Fiscal Advisory Council established implementing Directive 2011/85/EU was the state debt committee (“Staatsschuldenausschuss”) that had existed since 1970. The Austrian Fiscal Advisory Council’s statute, tasks and reports can be found (in English) at http://www.fiskalrat.at/en/. Its members are not bound by instructions. Inter alia, their tasks are assessing the current fiscal situation with an outlook for the future against the backdrop of Austria’s fiscal policy objectives and development trends in the money and capital markets; analysing economic effects of financial operations in connection with the indebtedness of all public authorities on the basis of their research activities; analysing the sustainability and the quality of budgetary policies of all public authorities; providing written recommendations on the fiscal policies of the public authorities in Austria, taking economic conditions into consideration; preparing an annual report on the recommendations made to the Federal Minister of Finance, including the results of studies and their analyses; and tasks according to Article 3 TSCG; Article 6 of Directive 2011/85/EU; and according to Article 5 of Regulation (EU) No 473/2013 (“Two-Pack”); such tasks specifically include providing recommendations on the medium-term budget objectives according to EU Regulation 1466/97; providing recommendations on the adjustment path to reach medium-term budget objectives; monitoring rule compliance under Article 5 of EU Regulation 1466/97 as amended by EU Regulation 1175/2011 in a timely fashion; observing circumstances and submitting recommendations that activate, extend or end corrective measures according to Article 7 Federal Law Gazette I No. 30/2013.

Regulation No 1176/2011 on the prevention and correction of macroeconomic imbalances 
(
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32011R1176:EN:NOT)

MEIP difficulties     
VII.6
What political/legal difficulties
did Austria encounter and what debates have arisen, in particular about implications of the regulation for (budgetary) sovereignty, constitutional law, socio-economic fundamental rights, and the budgetary process?

The new framework is perceived as stricter because the two Maastricht criteria Austria has always struggled with are debt and deficit. The method EU method of calculating the objectives was not undisputed but overall accepted as part of the new legal framework one had to comply with.  

Regulation No 1175/2011 on strengthening budgetary surveillance positions    
(
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1997R1466:20111213:EN:PDF)

MTO procedure
VII.7
What changes to the rules on the budgetary process are made to accommodate the amended Medium-term Budgetary Objective (MTO) Procedure?

The budgetary process had been changed in two steps, once already in 2009 and then in 2013. The 2009 version of the budgetary law was already in conformity with the amended MTO procedure (see also question II.2).[15]

European semester 
VII.8
What changes have to be made to the rules and practices on the national budgetary timeline to implement the new rules on a European Semester for economic policy coordination (section 1-A, article 2-a consolidated Regulation 1466/97)?

In compliance with consolidated regulation 1466/97, Austria sends every year a Stability Program together with a national reform program to the commission and the council. The stability program is decided in conformity with the Austrian Stability Pact (and the national budget coordination laid out therein).

MTO difficulties         
VII.9
What political/legal difficulties
did Austria encounter and what debates have arisen, in particular about implications of the regulation for (budgetary) sovereignty, constitutional law and the budgetary process?

Nothing specific on this issue.

Respect MTO     
VII.10
How is respect of the Medium-term Budgetary Objective included in the national budgetary framework (section 1A, article 2a consolidated Regulation 1466/97)?

There is a federal law on a deficit ceiling plus the Austrian Stability Pact (question VII.1) that stipulate the objective. In a nutshell, the law lays out the framework while the Austrian Stability Pact specifies in particular how the burden is distributed between the different territorial entities.  

Current MTO    
VII.11
What is Austria current Medium-term Budgetary Objective (section 1A, article 2a consolidated Regulation 1466/97)? When will it be revised?

In the Austrian Stability Pact of 2012, it was agreed that a structural deficit of 0.45% of the GDP should be achieved by 2017. However, based on Art. 3 (1) b TSCG, the Council suggested upon recommendation of the Commission in May 2013 that Austria should achieve this objective already in 2015. Measures were therefore taken in the planning of the budget for 2014.[16]

Adoption MTO  
VII.12
By what institution and through what procedure is Austria’s Medium-term Budgetary Objective adopted and incorporated in the stability programme (Eurozone, article 3(2)(a) consolidated Regulation 1466/97)?

The MTO is formulated in the Stability Program that is prepared by the government (notably Ministry of Finance) in accordance with internal coordination rules (the Austrian Stability Pact).

Regulation No 1177/2011 on the excessive deficit procedure
(
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1997R1467:20111213:EN:PDF)

EDP difficulties
VII.13
What political/legal difficulties
did Austria encounter and what debates have arisen, in particular about implications of the regulation for (budgetary) sovereignty, constitutional law and the budgetary process?

Nothing specific.

Regulation No 1173/2011 on effective enforcement of budgetary surveillance     
(
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32011R1173:EN:NOT)
Sanctions
VII.14
What political/legal difficulties
did Austria encounter and what debates have arisen, in particular about implications of the regulation for (budgetary) sovereignty, constitutional law and the budgetary process?

Nothing specific.

General changes     
VII.15
What further changes have to be made to the rules on the budgetary process in order to comply with the Six-Pack rules?

None that have not been mentioned in the previous questions.

Miscellaneous
VII.16
What other information is relevant with regard to Austria and the Six-Pack?

None.[17]

[1]              BGBl I 61/1998, at http://www.ris.bka.gv.at/Dokumente/BgblPdf/1998_61_1/1998_61_1.pdf

[2]              Griller, S., Zur verfassungsrechtlichen Bedeutung des Fiskalpaktes, Journal für Rechtspolitik, 20, 177-194 (2012), p. 184

[3]              Öhlinger, Verfassungsrecht, 2009, p. 109-111.

[4]              Supra note 1.

[5]              Details on the Austrian Stability Pact 2011 and all the necessary materials can be found and downloaded here: http://www.parlament.gv.at/PAKT/VHG/XXIV/I/I_01206/

[6]              Details on the Austrian Stability Pact 2012 and all the necessary materials can be found and downloaded here: http://www.parlament.gv.at/PAKT/VHG/XXIV/I/I_01792/

[7]              Deficit ceiling” introduced on December 29, 2011, BGBl 150/2011, http://www.ris.bka.gv.at/Dokumente/BgblAuth/BGBLA_2011_I_150/BGBLA_2011_I_150.pdf

[8]              Upper limit on federal guarantees from December 29, 2011, BGBL I 149/2011, http://www.ris.bka.gv.at/Dokumente/BgblAuth/BGBLA_2011_I_149/BGBLA_2011_I_149.pdf

[9]              Stenographic Protocol, Session No. 167 of the National Council, XXIV Legislative Period, pp. 120-151, at http://www.parlament.gv.at/PAKT/VHG/XXIV/NRSITZ/NRSITZ_00167/fname_276574.pdf

[10]             Vote on “Finanzausgleichsgesetz” amendment, Stenographic Prot. 167 (see section V, footnote 8), p. 151.

[11]             Vote on approval of Austrian Stability Pact 2012, Stenographic Prot. 167 (see section V, footnote 8), 151.

[12]             Full text of the Austrian Stability Pact 2012 available at http://www.parlament.gv.at/PAKT/VHG/XXIV/BNR/BNR_00587/fname_259966.pdf

[13] See European Commission, Interim Progress Report on the implementation of Council Directive 2011/85/EU on requirements for budgetary frameworks of the Member States, occasional paper 128, February 2013, p. 68.

[14]             Explanation of the government given to the National Council on the proposed legislation introducing the Austrian Stability Pact 2012, http://www.parlament.gv.at/PAKT/VHG/XXIV/I/I_01792/fname_254607.pdf , in particular p. 4.

[15]             Austrian Stability Program (Österreichisches Stabilitätsprogramm 2012-2017) in compliance with MTO procedure at https://www.bmf.gv.at/wirtschaftspolitik/in-oesterreich/StaPro_2012-2017.pdf?3vtn20, p. 36-37.

[16] Übersicht über die österreichische Haushaltsplanung 2014, Ministry of Finance, at http://www.parlament.gv.at/PAKT/VHG/XXV/III/III_00028/imfname_330245.pdf

[17]             For the academic debate on the new economic governance and the six-pack, see Fisahn A., Autoritäre Krisenlösung – der neue Weg der Europäischen Union, juridikum 2011, 445