Editions:  Austria · Denmark · France · Germany · Italy · Norway · Spain · Sweden · Switzerland

Standard & Poor's downgrades Austrian provinces

Share this article

Standard & Poor's downgrades Austrian provinces
Offices of Standard & Poor's in New York, USA. Photo: APA/JUSTIN LANE
09:20 CEST+02:00
The US rating agency Standard & Poor's, in a new move causing consternation, said on Tuesday it has downgraded the creditworthiness of the Austrian provinces of Vienna, Lower Austria, Styria and Burgenland.

The four provinces lost their previous "AA+" rating and have been downgraded to "AA" with a negative outlook. The provinces of Tyrol and Upper Austria kept their "AA+" rating with a stable outlook. The provinces of Carinthia, Salzburg and Vorarlberg had not been rated by S&P.

The rating agency said the downgrade was due to the fact that it was still uncertain whether the federal government would pass a law that included modifications of the fiscal equalisation scheme between the federal state and the provinces.

In July S&P had complained that the government's support of banks was not good enough. This was when the government announced that it wanted to wipe out Hypo Alpe Adria creditors.

S&P warned already in June that Austrian 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."

S&P said this special law was unique and never before seen in Europe. Thomas Fischinger of S&P Frankfurt complained on Austrian national radio Ö1 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 had said a decision would be taken in July, after the parliament decided on the Hypo regulation. 

Get notified about breaking news on The Local

Share this article

Advertisement

From our sponsors

Change the world with a master's degree from Sweden's Linköping University

Master's students at world-leading Linköping University (LiU) aren't there simply to study. They solve real-world problems alongside experts in fields that can create a better tomorrow. Do you have what it takes to join them?

Advertisement