Carinthia given €343 million lifeline
The Local · 20 May 2015, 10:17
Published: 20 May 2015 10:17 GMT+02:00
- Carinthia asks Vienna for financial support (27 Apr 15)
- Hypo investigation 'not open and transparent' (13 Apr 15)
- Austria 'could face years of legal battles' over Heta (24 Mar 15)
- Why Jörg Haider haunts Austria's finances (11 Mar 15)
Schelling said he wouldn't give any details about the loan until it had been approved by the Carinthian government, but added that Carinthia urgently needed structural and budget reforms. The loan will be provided by the Austrian Treasury at “relatively good” conditions, he said.
“This is about securing Carinthia’s operations and public institutions like kindergartens, schools and hospitals,” Schelling said. “This isn’t about Carinthia’s debt.”
Carinthian governor Peter Kaiser (SPÖ) said on Tuesday that the province is willing to make drastic spending cuts. It was feared that the state would run out of money within weeks if no deal was reached.
Carinthia's finances have been hit hard by the Hypo Bank disaster. The Austrian province lost market access when Moody’s Investors Service cut its credit rating in March.
The move followed Austria’s decision to wind down and impose a debt moratorium on former state-owned lender Heta Asset Resolution AG, which has €10.2 billion of its liabilities guaranteed by Carinthia.