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Austria's S&P rating endangered

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Offices of Standard & Poor's in New York, USA. Photo: APA/JUSTIN LANE
14:42 CEST+02:00
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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