Austria’s coalition government is under fire over its management of a banking crisis in which it agreed to nationalise the Hypo Alpe Adria bank in a move that has saddled the country with an estimated 18 billion euros in debt.
The Carinthian Hypo Alpe Adria was a bank that had expanded too quickly with heavy investments in particular in the Balkans where its activities were backed by Austrian local government guarantees. At the time Carinthia was ruled by the now deceased far right Freedom party leader Jörg Haider, who in exchange for guaranteeing the bank used it like his own personal piggy bank to fund voter winning ideas.
But before the banks serious problems became apparent Haider had managed to sell it to a German bank owned by the Bavarian government and he famously told people in his southern Austrian province: “Now we are rich.”
Yet in a move not yet properly explained Austria’s coalition government of the left-leaning social Social Democrats (SPÖ) and the conservative People’s party the ÖVP decided to buy the bank back for a nominal fee of one euro, freeing the German bank and the German regional government from the eventual disaster that the bank was to become.
The Hypo disaster has been a stick that the government has used to criticise the far right Freedom party of the FPÖ, at least until recently where the scale of the debt has become apparent, and Austrians are now asking exactly why it was that Austria had bought the bank back? Voters are also reportedly fed up at the way each new day seems to bring fresh revelations about government mismanagement of the project of people increasingly asking why is it even now so many years later that there is still no solution.
The matter was brought into sharp focus with the decision by Haider’s daughter Ulrika to enter politics as a candidate for her fathers breakaway political party the BZÖ in the upcoming European Parliamentary election.
She said: “The reality is that my father sold the bank at a profit to the Austrian taxpayer. The question is, why did the Austrian government then buy it back?”
The question seems to be one that voters are asking themselves. The ÖVP is already lying at a 20% voter share with the SPÖ at between 23 and 25%.
The far right Freedom party of Heinz Christian Strache in contrast is estimated at being between 25 and 27%.
The Green party that for too long has been seen as uncritical of the social Democrats with many local coalitions in operation has also suffered as a result losing ground against the new liberal NEOS with the two parties now battling it out for fourth and fifth place.