Gusenbauer doubts Faymann’s crisis concept

Former Social Democratic (SPÖ) Chancellor Alfred Gusenbauer has dismissed a suggestion by his successor on how Europe’s politicians could get the continent’s volatile economic situation under control.

SPÖ head and Chancellor Werner Faymann said the federal government and state leaders of the 27 European Union (EU) member countries should meet more often to debate how to react to developments on the financial markets to improve the condition of the economy.

Now Gusenbauer expressed scepticism about the idea. “They gather quite often anyway. A few times more will make no difference. Apart from that, they are only federally politically legitimated, not at European level,” he told magazine News.

Gusenbauer explained he was in support of the introduction of a council for economic issues in the EU as suggested by French President Nicolas Sarkozy and German Chancellor Angela Merkel. He said people should elect a leader of such a commission, adding that another option could be letting the European Parliament (EP) decide.

The ex-SPÖ boss also spoke out in favour of a tax on financial transactions, a measure Faymann and SPÖ State Secretary Andreas Schieder called for on European level. Gusenbauer said the creation of a European credit rating agency would also be a good idea. Some experts think the foundation of such an institution would reduce the strong influence of US American rating agencies. Erste Group Bank AG (Erste Bank) chief Andreas Treichl said such proposals were “childish” since it would take decades until a European rating agency established itself.

Asked for his opinion on political leaders’ decision-making considering reckless stock market speculations, Gusenbauer appealed: “Politics had to rescue the system because there has been too much of a deregulation. And still, nothing has happened considering stricter regulation. (…) Weak politics will lead to a madhouse situation on the financial markets.”

He added: “Believing in the happening of an automatic process of self-restriction is an illusion.”

Gusenbauer warned a separation of the Eurozone – the 17 EU members which use the Euro – would be the “beginning of the end.” Some economists – including Hans-Werner Sinn, who heads the German Institute for Economic Research (IFO) – suggested the Eurozone should be split into a group of northern countries which are seen as more stable and a faction of struggling southern states. “The Euro must be defended and fought for, but not like that,” Gusenbauer said speaking to News.

Gusenbauer warned that a decrease of prosperity in Europe and the United States compared to other regions was likely. “It will be hard to keep our standard of living as it has never been higher,” the ex-chancellor explained.

Gusenbauer has abstained from commenting on the decision of former government colleagues and current political leaders in Austria after he had been replaced by Faymann as SPÖ boss and chancellor in 2008. Gusenbauer’s term as chancellor and head of a coalition between his party and the People’s Party (ÖVP) lasted only one and a half years. The era was dominated by public feuds between the chancellor and ÖVP Vice Chancellor and Finance Minister Wilhelm Molterer and other members of the government.

Josef Pröll followed Molterer as party leader and finance minister shortly after both the conservative party and the SPÖ suffered immense losses in a general election. The ballot took place earlier than scheduled after Molterer had announced the end of the ÖVP’s partnership with the Social Democrats.

Pröll stepped down last April. Foreign Minister Michael Spindelegger took over as vice chancellor and party leader while ex-Interior Minister Maria Fekter became new finance minister.

Gusenbauer lectures at several universities in the USA and is part of the supervisory councils of various companies including real estate firm Signa Holding. He has been criticised for agreeing to work as advisor for Nursultan Nazarbayev, the autocratic president of Kazakhstan.