Austria's debt rises with new EU rules
A tightened EU statistics office rulebook for government accounting swelled Austria’s debt to 81.2 percent of GDP in 2013, Statistik Austria announced on Tuesday.
The EU’s statistics office Eurostat told Austria to change the classification of KA Finanz, the wind-down unit for failed Kommunalkredit Austria AG, and revise government statistics for the past five years.
Austria has had to add about €8 billion ($11 billion) liabilities of state-owned KA Finanz AG to its accounts. The new rules also force Austria to add bigger parts of the state railway and other state-owned companies like broadcaster ORF and Vienna’s public transport operator to its debt.
Prior to the revision, public debt stood at 74.5 percent. However it does not have such an influence on Austria’s deficit, which is 1.5 percent of GDP.
The biggest increase in debt is due to the breakup of Hypo Alpe-Adria-Bank International AG.
Hypo Alpe’s bad bank will add as much as 18 billion euros, or 6 percent of GDP, to its debt level in 2014, Statistik Austria’s director Konrad Pesendorfer said.
Finance Minister Hans Jörg Schelling (ÖVP) said that the recalculation would not affect the government’s tax reform plans as “debt has not risen, it’s just been calculated differently”.