Sanader arrest overshadows Faymann – Kosor meeting

Austrian Social Democratic (SPÖ) Chancellor Werner Faymann has met with Croatian Democratic Union (HDZ) Prime Minister Jadranka Kosor just three days after her predecessor was arrested in Austria.A spokesman for Kosor claimed that today’s (Mon) meeting was agreed upon “a long time ago”, and dismissed it had anything to do with the arrest of ex-HDZ boss Ivo Sanader. The former Croatian prime minister is currently in custody in Salzburg and expected to be extradited to his homeland.Croatian prosecutors issued an international arrest warrant on the former politician. Sanader, who is accused of being entangled in corrupt business deals, was stopped on the A10 Tauern motorway in the Austrian province of Salzburg on Friday.A lawyer for Sanader, who set up a company called Prima Consulting GmbH in the Austrian city of Innsbruck earlier this year, stressed his client was not on the run but on a business trip.Faymann and Kosor went for lunch in a restaurant at the Haas Haus in the city centre of Vienna. Reports have it that the Austrian chancellor took the opportunity to speak to Kosor about Croatia’s ongoing European Union (EU) accession negotiations.The chancellor previously praised Croatia as a “role model for the whole (Balkan) region”. Austria is considered as one of the most outspoken supporters of a possible Croatian accession among the EU’s 27 member states.Faymann said in July: “Croatia has always been an important trading partner for Austria. The economic ties between Croatia and Austria are so strong that I’m convinced both will recover from the blow handed out by the crisis.”Austria was number one investor in Croatia for many years, but dropped to second in 2009, spending 420 million Euros. The Netherlands came out top with around one billion Euros spent on businesses in the country.Yet the chancellor also stressed that Croatia must increase its efforts in fighting corruption in the country. “The legal system must be adapted to EU standards. I’ve heard many complaints from Austrian businessmen,” he announced earlier this year.Both Faymann and Kosor refused to make a statement after their meeting today.Meanwhile, Austrian People’s Party (ÖVP) Foreign Minister Michael Spindelegger said he expected Sanader to be handed over to Croatian authorities. Spindelegger said it was of “great importance” that authorities clarify whether the under-fire ex-prime minister broke the law or not. He, however, also stressed that Sanader did a lot in getting Croatia closer to joining the EU. Sanader faces up to 15 years in jail if found guilty of bribery, according to Croatian media. His former party HDZ has close ties with the ÖVP.Sanader, who graduated at Innsbruck University and speaks fluent German, has always rubbished accusations he was involved in any kind of fraudulent business activities since his sensational resignation in July 2009.Business magazines have suggested Sanader could have cooperated with Hypo Group Alpe Adria (HGAA) over investing in Croatia. The former Carinthian provincial bank was acquired by the Republic of Austria for a symbolic takeover price of three Euros last year when it was considered to be on the brink of bankruptcy.Lax policies in lending in Croatia and other southern European countries have been identified as the main reason for HGAA’s troubles which faced annual losses of 1.6 billion Euros before the Austrian SPÖ-ÖVP stepped in last December.Some magazines and newspapers claimed HGAA managers financed armament operations and controversial construction deals in Croatia for many years.Prosecutors in Klagenfurt, Vienna and Munich, Germany, are investigating against dozens of businessmen and political decision-makers in connection with HGAA’s near collapse. Germany’s Bayerische Landesbank (BayernLB) suffered an overall loss of 3.7 billion Euros by taking over HGAA in 2007.New HGAA CEO Gottwald Kranebitter stressed the plan was to get the struggling bank’s finances in order in time for a sale in 2012. The banker also vowed to ensure HGAA will repay the hundreds of millions of Euros of state aid it received during the past few years.Kranebitter’s ambitions suffered a blow when estimation by the European Commission (EC) recently expressed doubt as to whether the bank would ever be profitable again considering its debts and credit responsibilities. HGAA’s reported net losses of 449 million Euros for the first half of this year.