VIENNA (Reuters) – Roman Catholic and Orthodox theologians reported promising progress Friday in talks on overcoming their Great Schism of 1054 and bringing the two largest denominations in Christianity back to full communion.

Experts meeting in Vienna this week agreed the two could eventually become “sister churches” that recognize the Roman pope as their titular head but retain many church structures, liturgy and customs that developed over the past millennium.

The delegation heads stressed unity was still far off, but their upbeat report reflected growing cooperation between Rome and the Orthodox churches traditionally centered in Russia, Greece, Eastern Europe and the Middle East.

“There are no clouds of mistrust between our two churches,” Orthodox Metropolitan John Zizioulas of Pergamon told a news conference. “If we continue like that, God will find a way to overcome all the difficulties that remain.”

Archbishop Kurt Koch, the top Vatican official for Christian unity, said the joint dialogue must continue “intensively” so that “we see each other fully as sister churches.”

The churches split in 1054 over the primacy of the Roman pope, the most senior bishop in early Christianity. The Orthodox in Constantinople, now Istanbul, rejected Roman primacy and developed national churches headed by their own patriarchs.

ADAPTATION NEEDED

VIENNA, Sept 21 (Reuters) – Pressure on bank earnings due to new taxes and regulations is threatening a nascent loan recovery in the former Communist part of Europe and weighing on its economies, one of the region’s biggest banks said on Tuesday.

Austria’s RZB [RZB.UL] (RIBH.VI: Quote, Profile, Research, Stock Buzz) also said in a study on the eastern European banking sector that bad debt levels may go on rising longer than expected in at least some countries as stagnation or contraction persists.

RZB is eastern Europe’s third-biggest lender via its international arm Raiffeisen International.

Bank lending is one of the main avenues for western European capital flowing into central, eastern and southeastern Europe and parts of the former Soviet Union, and is therefore a key determinant of the region’s economic fate.

Despite concerns last year that the region’s dominant, mainly western-owned banks could pull out, RZB said loan books shrank only 1.8 percent in euro terms — and not at all in local currency terms except in Hungary, Russia, Ukraine and Bosnia.

But the moderate growth that RZB researchers have pencilled in for this year and next may be at risk because bank profits are being squeezed by new taxes such as in Hungary and Austria and possibly Poland, the bank said.

“Based on the current expectations for a muted recovery of the economies at varying speeds … our forecasting model … projects a moderate growth of banking loans in 2010 and 2011,” RZB economist Walter Demel said in the study.

VIENNA, Sept 20 (Reuters) – Mortgages in foreign currencies are an acute risk in Hungary, where homeowners borrowed heavily in Swiss francs and are now suffering from the forint’s depreciation, the head of Austria’s central bank warned on Monday.

Governor Ewald Nowotny and his central bank have long been critical of Austrian banks, which collectively are the biggest lenders to Hungarian borrowers and expanded foreign currency lending aggressively during Hungary’s boom years.

“The central bank has long warned of the dangers of foreign currency loans,” Nowotny said in an Internet chat with readers of Austrian daily newspaper Der Standard.

“For Hungary the risks are particularly acute because of the combination of the rise in the Swiss franc CHFHUF= and the fall in the forint,” he added.

A fresh rise in risk aversion has prompted investors to pile money into safe haven currencies, driving the Swiss franc to record highs against the euro in early September and putting pressure on Hungary’s currency and government bonds.

Hungary’s key vulnerabilities — a huge stock of foreign currency debt and poor growth prospects — come under the spotlight when investor sentiment sours. The global crisis in 2008 paralysed its bond market and drove the country to seek IMF aid.

Franc loans make up about half of Hungary’s household debt stock and the Swiss currency’s appreciation means borrowers are being pushed to their limits to meet payments, driving up non-performing loan (NPL) rates.

VIENNA/BUDAPEST, Sept 17 (Reuters) – Hungary needs to rebuild trust with international investors and doing so will help the struggling forint currency, the European Bank for Reconstruction and Development said on Friday.

Prime Minister Viktor Orban’s centre-right government has confounded markets since sweeping to a huge victory in an April election, shutting down talks with the International Monetary Fund to reclaim what he calls Hungary’s “economic sovereignty”.

Further comments eschewing austerity and first suggesting it could overshoot next year’s budget target agreed with Brussels, and then backtracking to say the goal will be met, have left investors wary, hitting the forint and pushing up debt yields.

European Bank for Reconstruction and Development Thomas Mirow urged Budapest to repair the damage.

“What would help Hungary most is to rebuild trust with international investors,” he told Reuters Insider television on the sidelines of a conference in Vienna. “That would also sustain the value of the forint.”

Some analysts say Orban could be posturing ahead of local elections next month in which his party hopes to consolidate power by distancing itself of the IMF- and EU-backed cost cutting measures undertaken by Hungary’s last Socialist government headed by a technocrat prime minister.

But they are unwilling to bet heavily on Hungary until he presents details of the 2011 budget, and particularly how he plans to cut the deficit to the agreed level of below 3 percent of gross domestic product, from a planned 3.8 percent this year.

VIENNA (Reuters) – The financial crisis is not over and governments have more to do to pull banks off state support, although no euro zone country should default on its debt, European Central Bank officials said on Friday.

ECB Governing Council member Ewald Nowotny told reporters at a trade union conference that government action was needed to wean banks off the emergency supply of cheap cash the bank has provided since the crisis erupted in late 2008.

That added to the impression that the fate of some euro zone banks — particularly in Ireland and Portugal — is now back at the forefront of investors’ and policymakers’ concerns, even after the agreeing of new stricter rules on capital last week.

Axel Weber, the head of Germany’s Bundesbank and another ECB council member, said there was still work to be done on making sure no banks were so big they could not be allowed to fail in future and said regulation would have to renewed regularly.

“The financial crisis is still with us. We are not in year one after the crisis, we are in year four of the crisis,” Weber said in a speech at the European Business School.

“Moral hazard is present in the financial system… I want to get to a situation where the term ‘too big to fail does not exist’. Banks have to be able to fail, but it must be able to happen in an orderly way.”

A cloudier global growth outlook has also reignited worries about the sustainability of the economic recovery.

VIENNA, Sept 16 (Reuters) – The Austrian Mint, which makes the popular Philharmonic gold bullion coin, said on Thursday a spike in sales it has seen in May due to worries about Europe’s economic future has abated considerably since June.

Sales of the coin, one of the best-selling worldwide, dropped 41 percent to 468,507 ounces in the year to end-August compared to the same period in the “exceptional” year 2009, the mint’s Kerry Tattersall told Reuters.

“Sales were fulminant in April and May when many people were unsettled in Europe because of the euro,” Tattersall said. “Since June the market has calmed down quite a bit, and of course we also have a summer lull.

“At the moment, sales are quiet, there is no huge demand.”

The Austrian Mint had sold more gold in the two weeks from April 26 than in the entire first quarter of the year because of soaring demand in Europe. [ID:nLDE64B22L]

Tattersall said he expected the level of sales to remain at the current level some 40 percent below last year’s unless there was a new bout of uncertainty pushing customers into gold again.

“I think we will probably remain at the 40 percent drop in sales in the full year,” he said. “We had this rate of decline throughout the year with the exception of May.”

VIENNA (Reuters) – The depth of the European Union crisis triggered by Greece’s debt woes and the risk it presented for the bloc will force even notorious naysayers to agree to a stronger EU role, Austria’s finance minister said on Wednesday.

“While the crisis was so deep and the potential threat to the euro so severe, it was still such a struggle to create the right structures to make decisions, and to make the right decisions,” Josef Proell told Reuters in an interview.

“That has to teach us a lesson, including those who are always critical of stronger European rules,” he said. “It has to force us into better European processes.”

Proell did not say which euro sceptical nations he had in mind but cited as an example last week’s agreement to overhaul how the EU is policing its financial industry, which had long been opposed by London.

“The opportunity to execute such measures is there now, we have seen that with the implementation of the new European supervisory structure,” he said.

Proell, a member of the EU’s task force charged with coming up with proposals on how to better monitor member countries’ budget deficits, said he was hopeful the group could come up with a proposal in time for next month’s EU summit.

He said it was also a good idea to make the rules and institutions like the European emergency loan fund EFSF a permanent feature of EU policy.

VIENNA, Aug 27 (Reuters) – Austrian nationalised bank Hypo Group Alpe Adria lost almost half a billion euros in the first half of 2010 as its asset clean-up and the economic crisis in the Balkans made charges for bad loans nearly double.

The scandal-ridden bank, whose former boss was arrested two weeks ago on suspicion he diverted bank funds, said on Friday its net loss tripled to 499 million euros ($634 million) and reiterated it would return to profit only next year.

The group will lose less in the second half of the year, so will probably not need another state capital injection, Chief Executive Gottwald Kranebitter told journalists in Vienna.

“Seen from today we have a sufficient capital base and that will also be the case at the end of the year,” he said.

Kranebitter, a former KPMG auditor appointed in April by the Austrian government after it took over the bank last year, is cleaning up and downsizing Hypo to knock it into shape so it can be sold again in three to five years.

Hypo, Austria’s sixth-largest bank, will sell or wind down its franchises in Italy, Montenegro and other countries but aims to keep its Slovenian, Croatian, Serbian and Bosnian business pending European Union approval for its state bailout.

Kranebitter said bad debt charges would reach around 1 billion euros this year — after 667 million by end-June – partly because of a review of Hypo’s loan portfolio but also due to the adverse economic environment in Croatia and Serbia.

VIENNA, Aug 20 (Reuters) – Austria is to give whistleblowers reduced penalties and create special prosecuting units to try to stem a tide of white-collar crime and corruption, much of it linked to politicians.

Investigations into the near-collapses of a bank close to the late rightist leader Joerg Haider and of real estate groups with links to politics have threatened to overwhelm understaffed and underqualified prosecutors, and put the spotlight on Justice Minister Claudia Bandion-Ortner.

The minister on Friday told reporters: “Corporate crime is getting ever more complex. We need to rearm in the fight against white collar crimes and corruption.”

Bandion-Ortner, a judge who presided over the court that handled the highly political BAWAG banking scandal three years ago, said whistleblowers would in the future get away with a fine rather than prison if they helped to secure a conviction.

The rule mirrors a provision in Austrian antitrust law, where 90 percent of all cases are discovered because members of a cartel come clean to authorities.

Critics say a system where prosecutors must report cases to the Justice Ministry, which can tell them to halt investigations, leads to prosecutors taking it easy on former politicians or people close to them.

But Bandion-Ortner said the system was necessary to ensure that prosecutors worked to uniform standards.

VIENNA (Reuters) – Austrian internet bookmaker bwin (BWIN.VI: Quote, Profile, Research), which is merging with Britain’s PartyGaming (PRTY.L: Quote, Profile, Research), said its second-quarter loss was due to one-off startup and marketing costs and would not recur in the rest of the year.

Bwin, Europe’s biggest online sport betting operator, posted second-quarter core earnings that were only half of what analysts had expected and turned into a loss on the bottom line, mainly due to costs for starting a French betting site.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the June quarter fell 27 percent to 11 million euros (9 million pounds), as marketing costs for the Soccer World Cup also weighed. Analysts in a Reuters poll had on average expected 20 million euros.

“What the market has underestimated was the costs for the French startup,” said UniCredit analyst Katharina Kastenberger. “On the cost side, the second half of the year is going to be much better.”

Bwin won a licence in June to offer online sport bets in France and has spent money on software and marketing for the new websites.

Bwin shares initially fell on Thursday, extending a drop that started last week, but turned positive when the company gave a full-year outlook that analysts said showed the disappointing results were a one-off.

Bwin said it expected its EBITDA margin to reach 25 percent of net gaming revenue in the full year, which UniCredit’s Kastenberger said was in line with market expectations.