![]() ![]() Not only did the students build the city brick by brick, they calculated the cost of building it including its schools and transport systems. He says the goal of his group is to end Austria's tolerance for "incompetent politicians." "We wanted to show what could be done with all of those billions" student Lukas Zeilbauer told DW. Built by architecture students from the nearby University of Technology it was dubbed "Hypotopia" and replicated in miniature form a city where more than 100,000 people could live, work and play. In late October a small city in model form appeared on a square in central Vienna. Tougher negotiations with the Bavarian shareholders could have meant they would have had a greater participation in the wind-up costs of Hypo Alpe-Adria and thus reduced the taxpayer burden, she concludes.Īnd those taxpayers are certainly aware of the money that's been wasted. ![]() She says there were alternatives to a state takeover of the bank, including allowing it to become insolvent. Griss says that despite requests no government strategic paper has been provided to her commission. "When it was obvious that BayernLB would not come up with the necessary recapitalization" says the report about the period during the forced nationalization in 2009 "there should have been strategic considerations about the way forward." The independent commission sees failures in Austria's handling of the nationalization. BayernLB says its rights have been ignored in the break-up of the now nationalized bank while the Austrian state is trying to claw back funds from former shareholders and creditors, the largest being BayernLB. In 2007 the German regional bank BayernLB took a majority share in Hypo Alpe-Adria in a deal which, at the time, seemed to suit both sides but which has ended in lawsuits and recriminations. She said auditors regularly reported "major deficiencies" in risk management at the bank but that no consequences followed. ![]() She describes a scenario where the bank was taking risks because it had guarantees from the Carinthian government while Carinthia believed its guarantees would be backed by the government in Vienna. "At the end of 2008 the Austrian National Bank described Hypo's condition as 'not distressed'" said Griss, adding that a chance to restructure the bank was missed. Griss said the Austrian National Bank failed to sound an early warning of the banks dangerously high exposure. The report details how the late governor of the state of Carinthia, the far-right politician Jörg Haider, allowed this relatively small bank to go on a lending spree in south-east Europe while giving government guarantees for large numbers of bad loans.Īt the peak of its profligacy in 2008, Carinthia had given guarantees for loans worth 43.3 billion euros, ($53.9 billion) according to the report.Īustrians taxpayers have already contributed 5.5 billion euros ($6.85 billion) to bailing out Hypo Alpe-Adria through a government initiated state takeover in 2009 and subsequent efforts to wind up its bad debts.Īccording to the Austrian Institute for Economics (WIFO) the total cost could run as high as 19 billion euros ($23.65 billion). ![]() "The events surrounding Hypo are marked by failings and mistakes at both national and state government level," said Griss Tuesday while releasing the results of a year-long investigation. The government appointed body, the so-called Griss commission, led by former judge Irmgard Griss, sets out a litany of failures in the Austrian banking and political system. ![]()
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