Although there had been some skeptical voices in the coalition government of Social Democrats (SPÖ) and conservative People's Party (ÖVP), among them former Finance Minister Maria Fekter (ÖVP), 96 members of the Nationalrat voted for the law and 76 against.
Ratings agencies had said that the law was a dangerous precedent. It should ensure that investors in Hypo – not just taxpayers – help to shoulder the financial burden of winding down a bank that has sucked in €5.5 billion (US$7.5 billion) in public aid so far. Moreover it could drive up borrowing costs for other state-backed firms, including utilities and health agencies.
The opposition parties had always argued in favour of letting the Hypo go bankrupt. Heinz-Christian Strache, the leader of the right-wing Freedom Party (FPÖ), said on Tuesday that "a well-organized bankruptcy" would have been better for the taxpayer.
It was a crime instigated by the Freedom Party and the right-wing Alliance for the Future of Austria (BZÖ) together with former Carinthia province governor Jörg Haider's (FPÖ/BZÖ) gang and several gangsters, Green MP Werner Kogler said. Nevertheless insolvency with the participation of all creditors would have been better for the taxpayer, he added.
The liberal NEOS and the chairwoman of Team Stronach, Kathrin Nachbaur, also would have preferred a bankruptcy. All opposition parties again urged the setting up of an investigation committee on that issue.
However, the government had always denied a bankruptcy as it would have had dramatic effects for the whole of Austria, as the €19 billion (with which Carinthia had underpinned the bank), would have had to be actually paid out.
Finance Minister Michael Spindelegger, the head of the ÖVP, said on Tuesday that this law would save the taxpayer €1.7 billion and a bankruptcy of the Carinthian province was prevented. All other measures as proposed might have entailed unpredictable consequences, he emphasized.
Spindelegger was backed by Kai-Jan Krainer, the SPÖ's finance spokesman, who said that it was right that former Hypo owner Bayern LB of Germany contributed financially.