07. 07. 10. - 15:00

Austrian fears as Hungary set to issue bank tax

Austrian banks are considering abandoning some of their activities in Hungary as the government there reveals plans to introduce a bank tax, it has been reported.

Fidesz National Economy Minister György Matolcsy said today (Weds) negotiations with the "Vienna Initiative" – a discussion group formed by Austria’s Erste Bank, Raiffeisen, Italian UniCredit and other institutes – will continue.

Matolcsy revealed the plan was to take 0.45 per cent of the total annual assets of banking institutes operating in the country from next year.

Austrian banks are among the biggest investors in Eastern Europe (EE).

Bank bosses reportedly attacked the Hungarian right-wing government over its plans since Sweden asked banks to hand over just 0.036 per cent of their annual assets.

The Austrian coalition government – formed by the Social Democrats (SPÖ) and the conservative People’s Party (ÖVP) – said recently the plan was to charge 0.07 per cent. SPÖ Chancellor Werner Faymann said he expected an extra 500 million Euros in takings per year when the bank solidarity tax comes into force.

Hungarian Fidesz Prime Minister Viktor Orban tried to calm bank chiefs today by stressing that the final decision will not be made before autumn.

The planned bank tax is part of the new Hungarian government’s recently presented strategic paper which was set up to save the debt-ridden European Union (EU) member state from ruin.