Bloomberg News

Austria Abandons Plans for Hypo Alpe Bad Company, Standard Says

July 09, 2012

Austria has probably abandoned plans to transfer as many as 15 billion euros ($18 billion) of Hypo Alpe-Adria-Bank International AG assets into a separate company as this would widen the state’s deficit, Der Standard newspaper reported, without saying where it got the information.

Austria had mulled avoiding a 1.5 billion-euro capital injection into Hypo Alpe by transferring bad assets into a company without a banking license, which therefore wouldn’t have had to meet special capital requirements for lenders, the Vienna-based newspaper said. Such a move would have boosted the country’s deficit to 76 percent of gross domestic product from 73.5 percent at the end of the first quarter, which was “out of the question” for the Finance Ministry, Standard said.

To contact the editor responsible for this story: Zoe Schneeweiss at zschneeweiss@bloomberg.net


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