Governments across Europe are adjusting budgets and tax policies as economic pressures and rising public debt force difficult fiscal choices.
In Poland, public debt reached 53.3% of GDP by June, nearing the 55% legal threshold that would trigger automatic austerity measures, including wage freezes for public sector workers and pension adjustments tied to inflation. Analysts at Moody’s and Poland’s Fiscal Council warn the ceiling could be breached by 2027 or 2028, raising the risk of a credit rating downgrade if fiscal rules are loosened instead of debt being curbed .
In the Netherlands, the Cabinet’s proposed tax changes—including a 31.2% increase in the Box 3 asset tax for private landlords—sparked backlash from industry groups, who argue the burden now exceeds rental income for many, accelerating property sales. Lawmakers from the VVD and CDA parties signaled openness to revising the wealth tax threshold to spare small savers, acknowledging funding vulnerabilities in the current plan .
France’s draft 2027 budget, presented on Thursday, faces scrutiny as successive governments have reversed fiscal pledges, with tax hikes increasingly used to service debt. The initial proposal is expected to undergo significant amendments during parliamentary debates starting mid-October .
Spain’s government, meanwhile, shifted the cost of capping regulated gas tariffs to consumers rather than the state, deferring the expense with interest. The measure, introduced this week, prevents a 45% price surge but saddles 3.1 million households with future repayment obligations, underscoring tight budget constraints .
