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Salzburg Global Seminar board member, Ewald Nowotny, in the news
Nowotny, who is currently the director of the Austrian National Bank, first discovered the Seminar in 1965. Since then, he has attended numerous conferences and events at Schloss Leopoldskron. In 2008 he joined the Seminar's board of directors.
OeNB boss criticises credit rating agency (from www.austrianindependent.com)
The head of the Austrian National Bank (OeNB) has questioned Moody’s decision to lower the outlook on the Austrian economy’s further development.
OeNB Governor Ewald Nowotny said yesterday (Tues) that the government’s 27-billion-Euro budget consolidation package "is a step into the right direction". He said the rating agency may not have considered the coalition’s measures sufficiently before establishing its latest outlook on economic developments in Europe. The former Social Democratic (SPÖ) member of the Austrian parliament (MP) also claimed that Moody’s latest statements had more to do with economic occurrences in Europe than the condition of the Austrian economy.
Moody’s announced on Monday night that it changed the outlook on Austria’s AAA to negative. This means that the country could lose the triple-A, the best possible estimation, within weeks. Only last month, Standard & Poor’s (S&P) downgraded Austria from AAA to AA+ while Fitch failed to make changes to its AAA estimation.
Moody’s highlighted the fragile market confidence and uncertainties regarding the future of the economy in Europe. It also emphasised risks the Austrian banks’ intense engagement in Hungary and other struggling Eastern European (EE) countries were posing to the Austrian budget.
"Austria's debt metrics are weaker today than they were in 2008-2009, the last time that the Austrian government provided support to its banks," Moody’s announced. Other analysts warned that a collapse of one of Austria’s biggest banks could not be avoided with a cash injection by the state due to its empty coffers.
People’s Party (ÖVP) Finance Minister Maria Fekter said ahead of yesterday’s government cabinet meeting that none of Austria’s banks had asked her for additional financial support in the past weeks. The Republic of Austria’s support for its leading banks is 1.4 billion Euros higher than the sum the finance institutes paid back since the transactions started in 2008, according to Eurostat.
Nowotny announced yesterday he still considered the activities of Austria’s banks in EE as a "success story". Andreas Treichl – who heads Austria’s biggest bank, Erste Group Bank AG (Erste Bank) – said last month he was not worried that Hungary may go bust. Treichl added he expected Greece to leave the Eurozone due to its financial troubles. The Erste Bank boss claimed the only open question was when this step would occur.
Austria’s banks but also supermarket chains and other companies are among the biggest investors in Hungary. Erste Bank chief economist Friedrich Mostböck said last week he was certain that the country would manage to solve its problems soon. "There is a political crisis in Hungary, not an economic crisis," he said, adding that Hungary is doing significantly better than many other European countries as far as the federal debt ratio was regarded.
The Eurozone’s economy will stagnate this year, according to the Viennese Institute for Economic Research’s (WIFO) latest outlook. The economic research organisation said in December that the average gross domestic product (GDP) of the 17 members of the Eurozone would fail to grow in 2012. WIFO said the Eurozone might manage to achieve a growth rate of 1.3 per cent in 2013. WIFO also said that it expected Austria’s GDP to rise by 0.4 per cent. Only in September, WIFO predicted a growth rate of 0.8 per cent.
15. 02. 12. - 16:04
Related to Salzburg Global Seminar Session:Financial Regulation: Bridging Global Differences - August 2012
posted on: 29 February, 2012
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