Analysis of the deal

How sustainable is the civil servants’ agreement really?

The government is celebrating, but in reality has only made minimal savings, says the expert.(Bild: APA/TOBIAS STEINMAURER)

After just one week, the government has reached an agreement with civil servants on a new pay deal. But how sustainable are the alleged savings really? The "Krone" took a look at the details.

The agreement stipulates that there will be no increase from January 2026 to the end of June 2026, with the original increase of 3.3 percent in the period from July 2026 to July 2027. This will save the government around 310 million euros in the short term for 2026.

Savings fizzle out in the depths
In the long term, however, these savings will fizzle out because the absolute amount will ultimately increase by 3.3 percent and will therefore also have an effect in subsequent years. Accordingly, trade union chief negotiator Eckehard Quin (GÖD/Civil Servants) emphasized that this short-term contribution by civil servants is "not a permanent arrangement".

The government is celebrating, but in reality has only made minimal savings, says the expert.(Bild: APA/TOBIAS STEINMAURER)

Civil servants have won in the long term
Salaries will be increased by one percent from August 2027 to August 2028 and from September to the end of 2028. This means an average increase of 1.5 percent. Civil servants have therefore also saved themselves the threat of zero pay rises. "It could have been worse, but in the long term the civil servants have won," Agenda Austria economist Dénes Kucsera summarizes the government's deal for the "Krone". 

Agenda Austria economist Dénes Kucsera(Bild: Elke Mayr)

This is what it looks like in figures: While six billion euros were originally booked for the years 2026 to 2028, it is now 6.2 billion euros over the period. "Overall, the deal will bring relief for the coming year, but additional costs in the following years," says Kucsera.

Economist warns of the 2029 election year
Originally, zero wage rounds were planned for 2027 and 2028, but salaries will now rise by one percent from August 2027 to August 2028 and from September to the end of 2028. Kucsera: "In the short term, this agreement has only given the state a little leeway in 2026, but in the long term it will put a greater strain on the budget." 

Kucsera also warns of the 2029 election year: "The union can consider it a success that there is a three-year agreement, which means that the zero rounds are off the table. However, it would have been better to include the year 2029 as well. As it is, only a few months after the 2028 adjustment, the election campaign is threatening another pay rise at the taxpayer's expense."