VIENNA, Oct 23 (Reuters) - The Austrian government outlined a three-year budget plan on Saturday, pushing ahead with a bank levy and saying that the deficit would come down faster than previously expected.
Chancellor Werner Faymann's coalition government said it would cut the deficit by some 2.8 billion euros to 3.2 percent of gross domestic product next year, and below the EU limit of 3 percent by 2012, a year earlier than expected.
'This budget guarantees a stable way forward and is balanced from a social perspective,' Faymann said in a statement.
The deficit reduction will come from 1.2 billion euros of extra tax revenue and 1.6 billion of spending cuts.
Austria's deficit is expected to rise to around 4.7 percent this year -- from 3.5 percent in 2009 -- weighed down by the cost of economic stimulus and a fall in revenue due to tax cuts and smaller corporate profits.
Social Democrat Faymann and his conservative Finance Minister Josef Proell also agreed to a planned 'solidarity levy' on banks that is supposed to raise some 500 million euros annually.
The tax would charge banks between 0.04 to 0.08 percent of their total assets as a 'solidarity levy', depending on their size, according to the state Austria Press Agency (APA).
Austria nationalised troubled banks Kommunalkredit and Hypo Group Alpe Adria earlier this year and has injected some 5 billion euros of capital into others.
The country's main banks -- UniCredit's Bank Austria, Erste Group Bank and Raiffeisen Zentralbank -- are also the top three lenders in eastern Europe's emerging economies.
Among other measures, the government also plans to raise tax on petrol and cigarettes.
There will be cuts in family benefit, APA reported, while the interior ministry will cut costs of the national service programme, international development projects and its diplomatic service.
Austria is one of the latest euro zone countries to agree on steps to rein in its budget deficit after Britain's sweeping austerity measures were outlined last week. Heavily-indebted Greece and Portugal agreed strict plans earlier this year.
(Reporting by Sylvia Westall; editing by Patrick Graham) Keywords: AUSTRIA BUDGET/ (sylvia.westall@reuters.com; Vienna Newsroom: +43 153 112 256; Reuters Messaging: sylvia.westall.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Chancellor Werner Faymann's coalition government said it would cut the deficit by some 2.8 billion euros to 3.2 percent of gross domestic product next year, and below the EU limit of 3 percent by 2012, a year earlier than expected.
'This budget guarantees a stable way forward and is balanced from a social perspective,' Faymann said in a statement.
The deficit reduction will come from 1.2 billion euros of extra tax revenue and 1.6 billion of spending cuts.
Austria's deficit is expected to rise to around 4.7 percent this year -- from 3.5 percent in 2009 -- weighed down by the cost of economic stimulus and a fall in revenue due to tax cuts and smaller corporate profits.
Social Democrat Faymann and his conservative Finance Minister Josef Proell also agreed to a planned 'solidarity levy' on banks that is supposed to raise some 500 million euros annually.
The tax would charge banks between 0.04 to 0.08 percent of their total assets as a 'solidarity levy', depending on their size, according to the state Austria Press Agency (APA).
Austria nationalised troubled banks Kommunalkredit and Hypo Group Alpe Adria earlier this year and has injected some 5 billion euros of capital into others.
The country's main banks -- UniCredit's Bank Austria, Erste Group Bank and Raiffeisen Zentralbank -- are also the top three lenders in eastern Europe's emerging economies.
Among other measures, the government also plans to raise tax on petrol and cigarettes.
There will be cuts in family benefit, APA reported, while the interior ministry will cut costs of the national service programme, international development projects and its diplomatic service.
Austria is one of the latest euro zone countries to agree on steps to rein in its budget deficit after Britain's sweeping austerity measures were outlined last week. Heavily-indebted Greece and Portugal agreed strict plans earlier this year.
(Reporting by Sylvia Westall; editing by Patrick Graham) Keywords: AUSTRIA BUDGET/ (sylvia.westall@reuters.com; Vienna Newsroom: +43 153 112 256; Reuters Messaging: sylvia.westall.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.