Global News Journal

from DealZone:

Haider’s heirs disown troubled Hypo bank

When the late Joerg Haider, the hard-right populist governor of the southern Austrian state of Carinthia, sold most of his government's stake in Hypo Group Alpe Adria in 2007, he said, beaming: "Ladies and Gentlemen, Carinthia is rich."

BayernLB, which like many other German landesbanken appears to have never met a toxic asset it didn't like, had just paid 1.65 billion euros for a 50 percent stake in Hypo. Around half of that went into Haider's government's coffers.

True to his pork-barrel politics, Haider used the funds to, among other things, subsidise Carinthian teenagers' driving licence fees, scrap kindergarten fees, and pay out cash to Carinthian families to "offset inflation" in 2008, conveniently timed shortly before an election.

This worked to cement Haider's image as the generous leader looking after the man on the street. But since his death in a car crash last year, it shows that the basis of this policy was not sustainable. Hypo is now in urgent need of another year-end emergency capital injection of more than 1 billion euros, after it went cap in hand to the Austrian government and BayernLB for 1.6 billion euros last year already.

Hypo's breakneck expansion in the former Yugoslavia is the main reason for its continued losses this year. Haider and his confidante, ex-CEO Wolfgang Kulterer, started and presided over this expansion, which let Hypo's balance sheet balloon to more than four times what it was in 2002. (This is the same Kulterer who pleaded guilty last year of false accounting during his time as Hypo CEO.)

But Haider's heirs in Carinthia, which still owns 12 percent of the bank, refuse to tap into the proceeds from the Hypo sale to help BayernLB prop up the bank's balance sheet. They call for the Austrian federal government to step in.

Austria’s Graf gets grief over “united Tyrol”

Breaking into the summer holiday lull, Austrian politics has gotten into a lather over a far-right populist’s call for a referendum on whether a mainly German-speaking region of northern Italy should rejoin Austria.

No matter how far-fetched, his proposal raised a hue and cry by challenging the taboo of old unreconstructed nationalism in a country restlessly determined to live down its Nazi past.

South Tyrol – Alto Adige in Italian – is an autonomous, Alpine province of Italy bordering Austria. It was annexed by Italy from defeated Austria-Hungary at the end of World War One.

Italy granted increasing self-government to South Tyrol in the decades after World War Two, defusing separatist unrest by Austro-German speakers. It is now among Italy’s richest regions, with an open border to Austria thanks to EU integration.

But Martin Graf, a rightist deputy speaker of Austria’s parliament, declared on Sunday that South Tyrol was actually “part of overall Tyrol”, and only “currently” within Italy.

The universal right of self-determination should apply for all “the German people” in Europe - just as those in old Communist East Germany got their wish to merge into one Germany at the end of the Cold War in 1990. “It’s time to ask the people if there should be one Tyrol,” Graf said.

Graf owes his parliamentary post due to the fact that his far-right Freedom Party replaced the Greens as Austria’s No. 3 party in last year’s parliamentary election.

from Global Investing:

Austrian subprime woes turn into political hot potato

The Austrian government debt agency’s two-year old foray into subprime investments has turned into a political hot potato and sparked an increasingly heated debate between the Social Democrats and conservatives, caught in an uneasy but coalition government without viable alternative.

Austria’s audit court last week revealed that the agency, which in its staid day job issues government bonds and makes sure state coffers are full when they need to be, started to moonlight on money markets in 2002 to earn a little extra money on the side.

Its cash position ballooned from an average 4.5 billion euros in 2002 to a peak of 26.8 billion euros in October 2007. This level “was not only determined by economic necessities, but was also meant to generate additional revenues,” the audit court said in its report.

Sure enough, as much as 10.8 billion euros went into asset-backed commercial paper (ABCP), a class of structured investments that became disreputable when the subprime crisis broke out in 2007. Luckily, the debt agency got away only slightly bruised, with up to 380 million euros in possible losses from those investments.

Even though the loss looks manageable (it equals 0.13 percent of Austria’s GDP), and no rules seem to have broken, two former and the current finance minister – all conservatives – as well as the agency itself find itself at the centre of a debate seeking someone to blame.

The conservatives were caught slightly wrong-footed. Still basking in election successes based on voters’ perception that they, rather than the Social Democrats, were the safe pair of hands to steer the country through the economic crisis, they suddenly faced charges of gambling away taxpayers’ money.

Karl-Heinz Grasser, under whose reign as finance minister the agency’s side business started, and whose life after politics mainly consisted of modelling and launching an ill-fated joint venture with coffee-roasting heir and banker Julius Meinl, said the losses didn’t happen under him – dodging the question why the side business was started in the first place.

Austrian far-right leader isolated over Israel stance

Senior figures from across Austria’s political spectrum have condemned the head of the far-right Freedom Party, Heinz-Christian Strache, over his party’s European election campaign directed against Israel and Turkey.

In an advertisement in the newspaper Kronen Zeitung, Freedom opposes the accession of Turkey and Israel to the European Union. Although Turkey is in EU accession talks, Israel is not.

Heinz-Christian Strache prepares for a TV discussion in Vienna, Sept. 17, 2008. REUTERS/Heinz-Peter Bader (AUSTRIA)

“What is the most distasteful and despicable is the style,” says Ernst Strasser, the conservatives’ candidate in next month’s elections for the European Parliament, referring to Strache’s campaign. “This style is abusive. He vilifies other religions and ethnicities.”

According to Chancellor Werner Faymann, Strache is “a hate monger, a disgrace”.

“It makes absolutely no sense for Israel to be mentioned. Israel is not a candidate for accession. There isn’t even an accession process. The only reason to mention Israel is to serve anti-Semitic prejudices. It is disgraceful.”

Austria, gas and the big bad Russians

Could an Austrian oil and gas group with more than 41,000 employees, some 25.5 billion euros turnover and a presence in more than 20 countries actually be a secret front for Russian gas giants, extending their tentacles of power into Europe?

It could be if you believe Zsolt Hernadi, the chairman of Hungarian rival MOL, not to mention some scary headlines about Russian gas in the British press.

Earlier this week Austria’s OMV sold a 21 percent stake it held in MOL to Russian oil group Surgutneftegaz for 1.4 billion euros ($1.9 billion), double the amount the stake was worth as stock. The stake was originally bought from … a Russian family Almost half of the stake was originally bought from … a Russian family.

“Suspicion arises … that because the Russian investor bought this stake at exactly the (initial purchase) price, it (OMV) was just a front,” Hernadi told a Hungarian parliament committee.

The sale came just days after OMV’s chief executive said he did not plan to let go of the stake this year, fuelling speculation there was an ulterior motive behind the swift deal, finalised in the middle of the night on Sunday.

“Sometimes the markets offer opportunities you have to take,” OMV’s spokesman said. The sale also came after a miserable takeover attempt by OMV, which was repelled by the Hungarian group at every twist and turn.

The European Commission warned on the deal last year, saying it could create big competition problems and lead to higher prices. OMV eventually withdrew its $23 billion bid. Unofficial talk among EU officials has also highlighted worries about OMV’s Russian connections.

Rising from the dead – Haider presides over Austrian regional election

Some 25,000 people attended his funeral, countless books have been written about him, a bridge was named in his honour and now the spectre of Austrian far-right leader Joerg Haider is dominating a regional election in Austria.

“A campaign with the tragically deceased Haider”; “A dead man is spearheading us”; “And above all, the spectre of Joerg Haider” read newspaper headlines.

Both of Austria’s far-right parties are staking their claim to Haider’s legacy in an election in the Alpine Province of Carinthia where he was governor for more than a decade.

“Carinthia is going HIS way,” proclaim the posters of Haider’s former Freedom Party. Freedom says Haider achieved his greatest successes when heading the party.

“We will look after your Carinthia,” echo the posters of Alliance for Austria’s Future, the splinter party that Haider set up in 2005 after internal disputes within Freedom.

Both parties, which mopped up a third of the vote between them in Austria’s recent parliamentary election, recognise the mileage still to be had out of Haider’s success.

The populist leader, who led the right into a coalition government from 2000-2006, was one of Austria’s rare internationally recognised public figures.

Banana art on the River Nile

    It looked like a perfect picture story, with all the right elements — the Nile, a fountain, 2,000 large inflatable bananas heaped in the shape of a pyramid, all set in a framework of Austrian conceptual art theory. The idea was that when the fountain began to shoot water into the air the bundles of bananas piled up from the base would explode and the bananas would disperse, floating gently down the Nile.

    ”The numerous, individual elements of the floating bananas are not only supposed to change the river’s colour but also, while drifting down the river are expected to develop distinctive dynamics, individually and through mutual interplay,” read the blurb from the Austrian Cultural Forum/Cairo (acf/c), which dreamt up and organised the event.

    ”For a few hours ‘Going Bananas’ draws special attention to the daily metamorphosis as the core of our lives, intentionally posing the pivotal questions of life: ‘Why?’ The acf/c’s motto for this year — ‘Everything is in a state of flux’ — thus culminates in its grand conclusion,” the Austrians added.

    The idea, they said, was that boats would follow the bananas down river to the Nile Barrage,  monitoring both their movements and the reactions of the local people. At the barrage they would collect all the bananas, which were about 1.60 metres long, and give them to children’s homes. At the launch ceremony on the terrace of the Grand Hyatt hotel, overlooking the Nile, cultural forum director Clemens Mantl hinted at the bureaucratic hoops he had to jump through to set up the event. The governor of Cairo had agreed to sponsor it and the river police were out on the Nile in force to make sure it all went smoothly. Mantl called the project ‘a masterpiece of bureaucracy’.

    So there we were, sipping our soft drinks in the stiff northerly breeze and awaiting the explosion of bananas. About 10 minutes behind schedule the fountain started up, sending a jet of water maybe 100 feet into the air. But the breeze was so strong that it blew the plume far off to the south and the water fell back into the Nile, leaving the balloons immobile. In the meantime the wind was blowing the odd banana off the basin of the fountain and the police boats were zipping around to pick them up and put them back in the pyramid. But the plume of water stubbornly continued to fall far away from the bananas. Mantl said all should be well when the fountain people turned on spouts around the base of the basin. The spouts did start to spurt water but it was a feeble trickle and the bananas firmly stayed put.

    By this time the spectators had began to drift away, and I went with them. The Austrians said later that they finally dispersed the bananas by hand and boats picked them up well before they reached the barrage. “Obviously it didn’t go as planned, but when all the boats went out to pick them up, the interaction with the people was very nice,” said one of the Austrians.

Austria’s Haider: a hero beyond the grave?

He may have died in a car crash last month whilst drunk, but Austrian rightist Joerg Haider is not gone.

Haider, who was enmeshed in nearly every part of Austrian political life, is now being hailed for his efforts to help two Austrian hostages being held in the Sahara months before his death.

According to a newly-published e-mail, Haider asked the son of Libyan leader Muammar Gaddafi in March for help in freeing Andrea Kloiber and Wolfgang Ebner, who disappeared in February while on holiday in Tunisia. They are believed to have been held by al Qaeda’s North African wing.

The hostages were released last week, several months after Haider wrote to his close friend Saif al-Islam Gaddafi. The Austrian Foreign Ministry said Libya only helped in initial negotiations but not the eventual release.

Whether Haider’s contribution was decisive or not, the news has only added to his image as a “hero of the people”.

The daily Oesterreich, which printed extracts from the e-mail, has already published a DVD of Haider’s life and romantic images of him dressed in traditional Austrian costume, looking out over the mountains of Carinthia, where he was provincial governor. Some 25,000 people attended his memorial service in Klagenfurt last month.

Many did not seem to think his divisive anti-immigrant rhetoric was much of an issue and were fiercely loyal towards Haider, one of Austria’s few internationally recognised figures.

Was rightist Haider gay? Austria doesn’t care

 Now that Austrian far-right leader Joerg Haider is dead, the German, British and U.S. press are eagerly spilling the beans on his “secret double life”, saying that he had a male lover.

 Just when you thought his story couldn’t get more dramatic — he died on Oct. 11 in a high-speed car crash while drunk — we now learn that Haider, who was married with two daughters, was not only a populist who polarised the public with remarks about Nazism and immigrants, but might have been gay too.

 But wait a minute. Speculation about Haider’s sexuality is not at all new, at least not in Austria. Here, his death has not really led to breathless speculation about his private life as it has elsewhere.

 Why not?

 Questions about Haider’s sexuality had been asked in Austria since the 1990s, when the charismatic, folksy leader surrounded himself with a group of young and successful male followers, earning his entourage the nickname “The Boys Posse”.

 Far-right parties have never been especially women-friendly anyway.  Haider never said he was gay, nor denied it and Austrians’ reaction to this is interesting. They don’t really care. Whether true or not, this speculation was largely politely ignored or deemed not newsworthy.

 Overall the Austrian press abides by the unwritten rule that private lives should only be written about when made an issue by the politician themselves, or has an effect on public policy.