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HYPO

Carinthia asks Vienna for financial support

Negotiations are continuing on Monday between the government of Carinthia - the home province of defunct lender Hypo Alpe Adria - and ministers in Vienna.

Published: 27 April 2015 12:17 CEST
Carinthia asks Vienna for financial support
Klagenfurt Landhaus. Photo: Johann Jaritz/Wikimedia

Carinthia is asking Vienna for financial support, saying it will run out of money by the beginning of June without help.

Carinthia provided debt guarantees to fuel Hypo's expansion before the practice was stopped in 2007, but the last ones do not expire until around 2017.

With an annual budget of €2.2 billion ($2.36 billion), Carinthian officials have said the province cannot honour nearly €11 billion of backing for Hypo debt that creditors could demand.

Ratings agency Moody's downgraded Carinthia last month to one notch above junk grade, making it more difficult to borrow in the open markets.

Carinthia needs €340 million this financial year and is hoping for loans from the capital, a spokeswoman for the province said after meetings last week.  

She added that Carinthia would run out of money in June without help, confirming local media reports.

Austrian Finance Minister Hans Jörg Schelling (ÖVP) has indicated that Vienna could help out, providing certain conditions are set such as a risk premium on interest rates, and Carinthia agreeing to carry out further financial reforms.

Speaking before negotiations on Monday Carinthian Governor Peter Kaiser (SPÖ) said: "All provinces are funded by the Federal Financing Agency, and so far, Carinthia has always repaid everything on time. There is, in my view, no reason not to grant such financing. "

No Austrian province has ever gone bankrupt and there is no legislation on how to handle such an event.

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WORLD WAR

The image that captured an Austrian region’s fateful choice

In the southern Austrian region of Carinthia, the anniversary of the end of World War I stirs memories of how borders shifted after the conflict, changing the lives of its inhabitants.

Published: 12 October 2018 09:24 CEST
The image that captured an Austrian region's fateful choice
Carmen Kuster, poses with an image showing a family in traditional costume casting its vote into a ballot box emblazoned with Carinthia's coat of arms. Photo: AFP

As Carmen Kuster thinks back to her childhood in the village of Gallizien, close to the Slovenian border in the foothills of the Alps, one image stands out above all: an engraving “hanging in all schools and colleges” representing the plebiscite through which the region had to decide which country it would belong to.

In it, a family in traditional costume casts its vote into a ballot box emblazoned with Carinthia's coat of arms.

The end of the war brought about the collapse of the multi-ethnic Austro-Hungarian Empire, which had up until then held together large parts of central Europe and the Balkans under the banner of its Habsburg rulers.

The Empire's constituent nations began to form states — but the question of drawing borders between them was anything but straightforward.

“It had to be decided whether the region where I was born was to carry on being part of Austria or whether it would join the new Kingdom of Serbs, Croats and Slovenes,” says 42-year-old Kuster, using the name for the predecessor state to Yugoslavia.

In southern Carinthia, with its mix of German and Slovene speakers, the border question was hotly debated.

“My great-grandfather was a supporter of staying within Austria, he was active in that movement,” Kuster says.

'Nationalist' distortion

The Treaty of Saint-Germain between the victorious Allies and Austria provided for a referendum to settle southern Carinthia's status, which duly took place on 10 October 1920.

Fifty-nine percent of voters chose to remain within Austria. 

“October 10 is a holiday in Carinthia. It's a big celebration,” she says.

“The night before there are fires lit on the mountains to mark it.”

Now living in Vienna but still very much attached to her native region, Kuster complains that the holiday has now been distorted “in a very nationalist way by the right”.

The numbers of people identifying as Slovenian in Carinthia have fallen from tens of thousands at the time of the vote to just a few thousand today.

The minority enjoys rights guaranteed by the constitution and 164 districts in the region use bilingual road signs.