Bloomberg News

Austria Revises 2010 Deficit Down to 4.4% on Hypo Writedown

October 21, 2011

(Updates with comment from Finance Ministry starting in second paragraph.)

Oct. 21 (Bloomberg) -- Austria revised down its 2010 deficit to 4.4 percent of gross domestic product after the European statistics office told it to book a writedown on a nationalized bank this year rather than last.

Austria booked a 700 million-euro ($1 billion) writedown on its stake in Hypo Alpe-Adria-Bank International AG last year as the lender prepared for a capital decrease it announced May 30. The government was told by Luxembourg-based Eurostat to rebook the charge in this year’s budget because the measure was executed in 2011, Harald Waiglein, a Finance Ministry spokesman, said in a telephone interview today.

While the revision will increase this year’s deficit, Austria will still beat its plan to report a deficit of 3.9 percent of GDP, Waiglein said. Based on current trends, the deficit will probably stand at 3.6 percent at the end of this year including the Hypo Alpe charge, he said.

Hypo Alpe reduced its capital to wipe out 814.6 million euros of accumulated losses, it said in May. The measure canceled 69 percent of Hypo Alpe’s share capital and of non- voting participation capital injected in 2008 and 2009, causing a loss of about 700 million euros for the Austrian government as well as losses for the non-voting capital owned by former shareholders including BayernLB.

--Editor: Alan Crawford, Andrew Atkinson

To contact the reporters on this story: Jonathan Tirone in Vienna at jtirone@bloomberg.net; Boris Groendahl in Vienna at bgroendahl@bloomberg.net

To contact the editors responsible for this story: James Hertling at jhertling@bloomberg.net; Angela Cullen at acullen8@bloomberg.net


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