Austria’s S&P rating endangered

Austria's S&P rating endangered
Offices of Standard & Poor's in New York, USA. Photo: APA/JUSTIN LANE
Government plans, which would cause major international investors in the ailing nationalised Hypo Alpe Austria bank substantial losses, would harm the country's "good reputation", the US rating agency Standard & Poor's (S&P) warned on Thursday.

On Wednesday, the cabinet passed draft legislation in effect canceling certain of the Hypo's debts to some of its creditors.

S&P said this special law was unique and had never been seen before in Europe. Thomas Fischinger of S&P Frankfurt complained on Austrian national Ö1 radio on Thursday that the cabinet regulation was a sign that there was too little support for the banks from the Austrian government.

S&P raised the possibility of lowering its credit-worthiness ratings of several Austrian institutions. Fischinger said a decision would be taken in July, after the parliament decided on the Hypo regulation. S&P is threatening to lower the rates in Lower Austria, Styria and Burgenland provinces as well as in Vienna.

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