Government ‘to set up advisory council’

The Austrian government plans to ask high-profile businessmen to join an advisory committee after a leading banker called politicians “stupid and coward.”

Erste Group Bank AG (Erste Bank) boss Andreas Treichl’s attack kicked off an intense debate about the relationship of politicians and entrepreneurs last month. The banker – who nearly became federal finance minister in the cabinet of the People’s Party (ÖVP) in the 1990s – said at a platform discussion: “The next crisis will come and it will be worse than the current one. (…) Austria will suffer (…) and we will fall behind compared to other countries.”

Treichl explained he strongly opposed plans to set up stricter rules considering banks’ lending activities as part of the international Basel III regulations – which were agreed upon by bankers, not politicians. The planned guidelines would enforce banks to have higher equity ratios than before if they want to provide small and medium-sized enterprises (SME) with credits.

Some experts have criticised that Basel III features no effective measures against high-risk speculative deals and reckless stock market actions. Treichl called Basel III “a disgrace and a big mistake.” He also said: “Our politicians are too stupid and cowardly to understand that because they have no idea of the economy.”

Now the federal coalition of Social Democrats and the conservative ÖVP want to set up an economic council consisting of leading businessmen, according to a Viennese newspaper. The Kurier reports today (Thurs) that the parties plan to invite Voestalpine chief Wolfgang Eder, OMV AG boss Gerhard Roiss, Raiffeisenzentralbank (RZB) head Walter Rothensteiner among others to join the panel. Voestalpine is a leading steel-manufacturing company based in Linz. OMV is one of Europe’s busiest oil and gas providers. Erste Bank and RZB are among Central and Eastern Europe’s (CEE) most powerful financial institutes.

Treichl will also be approached to become a member of the committee, according to the report. The Erste Bank chief apologised for his emotional attack and the harsh words he chose a few days after making his controversial statements. However, the banker did not make a U-turn on his general points of view. Surveys have shown that a majority of Austrians agreed with his claim that some of the country’s political leaders were acting stupid and cowardly.

The installation of an advisory committee considering economic aspects is regarded as the SPÖ-ÖVP administration’s latest attempt to stop the Freedom Party (FPÖ) from becoming more popular. The right-wing opposition faction performed strongly in most of the recent elections. The FPÖ criticised the government for supporting debt-stricken Eurozone members like Greece and suggested the coalition should spend the lent money within the country to support Austrians plagued by soaring prices and other effects of the economic downturn.

The FPÖ could come on top when Austrians are asked to the poll later this year, according to some surveys. The right-wing party garnered 17.5 per cent in the most recent federal ballot in 2008. The SPÖ’s share decreased by six per cent to 29.3 per cent in the vote.

Wilhelm Molterer resigned as head of the ÖVP after the party bagged only 26 per cent, down from 34.3 per cent in 2006. Josef Pröll took over from Molterer before stepping down due to health reasons in April. Foreign Minister Michael Spindelegger bagged 95.5 per cent of delegates’ votes to become the ÖVP’s new chairman in a summit in Innsbruck some weeks ago. Some ÖVP officials openly criticised the new leader about his alleged reluctance from speaking out more clearly what he stands for considering immigration issues, labour market aspects and other crucial topics many people are worrying about.