Faymann fears Greek exit costs

Social Democratic (SPÖ) Chancellor Werner Faymann has warned from a Greek Eurozone exit.

Faymann said such a scenario would be “very risky” and include “many yet unknown aspects”. Faymann said: “No one can predict where this would lead. The only thing that can be said with certainty is that it would all be very expensive for all those involved.”

Greece is experiencing the fifth year in recession in a row. The country – which has one of the highest jobless rates in Europe – is challenged by high debts and an immense gross domestic product (GDP). Its financial struggle caused the once prospering tourism industry to dwindle last year. Predictions of how the Greek tourism sector will perform this summer are not encouraging.

Austria’s leading tourism agency, the Verkehrsbüro Group, said last month the number of bookings of trips to Greece dropped by 21.6 per cent compared to figures registered at the same time last year. A survey shows that more than four in 10 Austrians are certain about taking a holiday this summer but Peter Zellmann – who organised the poll – emphasised that 27 per cent were still undecided. Asked for his opinion on the situation in Greece, Zellmann said: “The prospect of taxi drivers on strike and cancelled ferry services is not very tempting.”

The Austrian economy will do comparably well in the coming months, according to experts. The Organisation for Economic Co-operation and Development (OECD) said that Austria’s GDP would rise by 0.8 per cent this year. The organisation, which is based in French capital Paris, also said that the Greek GDP would decrease by 5.3 per cent at the same time. The economy in the Eurozone, the group of 17 European Union (EU) member states which use the Euro, will edge down by 0.1 per cent from 2011 to 2012, according to the OECD study.

Austrian People’s Party (ÖVP) Foreign Minister Michael Spindelegger underlined that the EU was interested in continuing to help Greece in restructuring its public sector and rebuild the shattered economy – if the country’s next government promises to stick to the agreed consolidation path.

Spindelegger added he was against the introduction of Eurobonds “in the next three to five years” while Austrian Economy Chamber (WKO) President Christoph Leitl spoke out in favour of the creation of such financial market products. Leitl also appealed on EU leaders to start offering project bonds. Andreas Schieder, the finance secretary of the SPÖ, wants a quick introduction of project bonds as well to help Greece and other struggling EU members.

Greece’s public debts resembled around 160 per cent of the state’s GDP last year. Austria’s debts were as high as 74 per cent of its GDP. A recent survey – for which 300 members of international firms’ top-tier managements were interviews – identified Austria as one of the most promising regions of the continent. Austria made fifth place in the poll which aimed at determining Europe’s relevant locations for doing business in the future. German made first place ahead of Sweden, Switzerland and the Netherlands.