Austria announces coronavirus aid package, ditches deficit target

Austria is making 4 billion euros ($4.4 billion) immediately available to deal with the economic fallout from the coronavirus pandemic, the conservative-led government said on Saturday as it ditched a central pledge to balance its budget.

Austria has closed its borders to most arrivals from neighbouring Switzerland and Italy because of the coronavirus outbreaks there and is in the process of scaling back daily life to slow the disease's spread, shutting schools and most shops other than those selling food and medicine.

"A balanced budget is always important, but Austrians' health, jobs and a stable economy is more important," Finance Minister Gernot Bluemel told a government news conference, referring to his and fellow conservative Chancellor Sebastian Kurz's top economic target.

The initial 4 billion euro "corona crisis fund" would cover items such as bridge loans and credit guarantees to shore up businesses' liquidity, Kurz said. Help with shortening working hours for staff and deferring taxes would also be provided.

"It will not be the last measure that we take in this area, but it is the first quick, necessary measure to react immediately," Kurz said.

Bluemel is due to give a budget speech on Wednesday. He said that instead of focusing as usual on reducing public spending and balancing the books his budget would spell out "the bitter truth of this crisis", and would be aimed primarily at helping the country overcome it. ($1 = 0.9005 euros)