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Spindelegger: Taxpayers Should Not Carry Whole Load

Published: February 20, 2014; 20:35 · (Vindobona)

Finance Minister Spindelegger declared himself in favor of a haircut of creditors of problem bank Hypo Group.

Spindelegger: Taxpayers Should Not Carry Whole Load / Picture: © Flickr / The Austrian Foreign Ministry

Finance Minister Michael Spindelegger has now declared himself in favor of a haircut of bondholders and investors in the downsizing costs in spite of Klaus Liebscher’s, head of Hypo Group’s task force, warnings. According to Spindelegger, the decision to let investors participate was a political question. “This exceeds the possibilities of a task force,” he told “Puls 4” in an interview on Thursday.

Instead, Spindelegger pointed out that it was a fundamental decision that only the policy-makers had to make. According to the Finance Minister, a decision about the downsizing of Hypo Group will be made at the end of next month. In order to make the right choice, an external, international group of experts should be assigned, also for the examination of the possibility of a financial participation of investors. According to Spindelegger, one must not burden the taxpayers with the whole load. But those, who have benefitted and are not worthy of protection should make a contribution.

According to a spokesman of the Finance Ministry, an internationally operating consultancy enterprise will be assigned for the examination and arrangement of the financial participation of investors. Moreover, the question of how much the province of Carinthia and former owner Bayern LB can contribute. The contracts have not been signed yet. However, negotiations are at an advanced state and have started before the bank’s task force raised criticism against the government.

According to the pre-text of Puls 4, Spindelegger expressed his hope that the group of expert will “help us avoid mistakes. This is why I do not want to want to set up any artificial barriers.” Moreover, the Finance Minister did not exclude a new austerity package to finance the downsizing of Hypo Group. “I cannot exclude or imply anything,” he said and stressed he neither could give the all-clear nor could he say there is no necessity in an austerity package since the economic situation cannot be predicted.