April 27, 2020 / 7:26 AM / a month ago

Austrian 2020 budget deficit could reach 10% - finance minister

FILE PHOTO: Austrian Finance Minister Gernot Bluemel attends a news conference during the coronavirus disease (COVID-19) outbreak in Vienna, Austria, April 20, 2020. Roland Schlager/Pool via REUTERS

VIENNA (Reuters) - Austria’s 2020 budget deficit could reach 10% and its state debt could hit 80%, Finance Minister Gernot Bluemel said in an interview published on Monday but added that it was too early for concrete figures.

The government is ready to increase its 38 billion euros ($41 billion) aid package if needed, Bluemel also told German daily Frankfurter Allgemeine Zeitung.

“If more is needed, there will be more,” the conservative politician said.

In return for financial support for Lufthansa’s (LHAG.DE) Austrian unit AUA, the government will require guarantees such as keeping Vienna as a transfer hub, he said.

Asked whether taking a stake in Lufthansa was an option, he said: “I am not ruling out or prejudging anything at this stage.”

Lufthansa aims to finalise a state aid rescue package this week worth up to 10 billion euros, people close to the matter told Reuters last week.

The sources said it is likely to consist of equity from Germany’s new Economic Stabilisation Fund, state-guaranteed loans from Germany and debt supplied by Austria, Switzerland and Belgium.

Bluemel reconfirmed Austria’s stance that the European Union’s planned recovery fund should mainly provide repayable loans and not grants as demanded by Italy.

Reporting by Kirsti Knolle; editing by Jason Neely

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