Graz imposes budget freeze and suspends subsidies due to liquidity crisis

The city of Graz has implemented an immediate budget freeze and suspended the processing of new subsidies to ensure liquidity. The measures, announced by Finance Councilor Manfred Eber, include a general ordering freeze until September 10, after which only essential expenditures for legal obligations and internal services will be permitted subject to strict review.

The financial crisis is attributed to a negative liquidity trend for the remainder of 2026 and unexpected costs, including approximately 35 million euros in additional requirements for disability assistance. Eber noted that the city faces a structural need to save at least 65 million euros, compounded by losses of 30 to 35 million euros in annual revenue due to federal tax reforms.

Opposition leaders have criticized the move, calling it a ‘financial alarm signal’ and demanding greater transparency regarding the city's current liquidity and the impact on affected organizations.