After Downgrade of Vienna: No Consequences Expected

After Downgrade of Vienna: No Consequences Expected / Picture: © Flickr

On Monday, the U.S. rating agency lowered the rating for the province and municipality of Vienna. The rating was reduced from “AAA” to “AA+”. S&P justified its decision with the downgrade of the Austrian federation, which has been announced on January 13. The creditworthiness of Vienna is not affected, S&P states. Besides Vienna, the last “AAA”-provinces of Austria, Tyrol and Upper Austria were downgraded too.

For Renate Brauner, there are no “direct impacts” to fear. At the moment, negotiations with financial partners and creditors would take place. “They know about Vienna´s high solvency.”, Brauner said. The financial senator argued that Vienna will pursue its “intelligent budget consolidation”, which should be closely linked to the local government´s “growth offensive”.

The opposition parties did not believe Brauner´s statements. Vienna´s finance would clearly face a higher burden, the largest opposition party FPÖ said. ÖVP emphasized that Brauner´s optimism is not “comprehensible”.

In 2011, Vienna´s new indebtedness amounted to € 402m. By the end of 2011, the debt burden totaled € 3.99bn. According to Brauner, interest expenditure amounts to € 20m. Last year, revenues amounted to € 11.43bn (+€ 615.3m), expenditures totaled 11.83bn (+€ 395.5m).