‘Austria’s Hypo credit risk’

Both Standard & Poors and Moody’s are threatening to downgrade their rating of Austria “if the debt of the Austrian state rises above the record level of 80 per cent of GDP,” announces Die Presse.

This threshold may be exceeded because of problems with the Hypo Alpe Adria banking group, “which has toxic assets that could result in a €18bn bill” to the state. Worse still, the daily explains that only part of this sum is currently included in the calculation of the country’s public debt. The newspaper adds that the longer it takes the politicians to wind up the bank “the more likely the scenario of a downgrade [of Austria’s rating].” Die Presse continues —

... some five years ago, the former regional bank of Carinthia was the first to benefit from taxpayers’ money. However, a recovery strategy for the institution has yet to be established. [...] The European statistics institute Eurostat is closely monitoring all the details of this process.