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Specific Aspects of Public Debt Management in Austria

Explore the specific aspects of public debt management in Austria, including total debt, financial crisis impacts, risk management, and involvement in the European Stability Mechanism. Learn about debt composition, risk mitigation strategies, and the country's financial stability initiatives.

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Specific Aspects of Public Debt Management in Austria

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  1. Specific Aspects of Public Debt Management in Austria

  2. Overview Austrian Debt Austria still with AAA-rating • 205 billion EUR total debt (72,3 % of GDP) in 2010 (184 billion EUR, 67,1 % of GDP in 2009) • financial debt 187 billion EUR in 2010 (178 in 2009) • interest 2010: 9,9 billion EUR (including SWAPS) • - balance of current accounts 2010: surplus of 3,2 % of GDP (+ 2,3 % in 2009)

  3. Long-term sustainability threatened But: first time since 1996 cashflow negative • federal government in 2009 cashflow negative with 5,3 billion EUR; in 2010 reduced to -3,1 billion EUR • first time since 1996 • meaning: just to support current expenses including interest payments Austria • has to add new debt in such a year • -> consolidation necessary

  4. Financial crisis • Expenses or revenues for the taxpayers ? • 100 billion EUR rescue package (2008) • reduced to 65 billion EUR in 2010 and 15 billion in 2011 • 7,5 billion EUR preferred shares in banks (capital injections) • 22 billion EUR state guarantees • -> still too early to know the total costs of the rescue package • (even a small revenue is still possible)

  5. Total guarantees • +10,6 % due to financial crisis in 2009 • guarantees 2008: 113 billion EUR • guarantees 2009: 124 billion EUR • +10,6 % in federal guarantees • guarantees 2010: 129 billion EUR (+3,7 %)

  6. Debt composition Austrian debt with low FX-risk • 97 % in EUR, 3 % in FX (2009) • aggregated maturity 4,8 years (2010) •  low FX-risk, low roll-over-risk

  7. Risk management Luckily there was a steep learning curve of ÖBFA • after a paradigmatic audit (see WGPD-homepage) in 2009: • introduction of new limit systems for ÖBFA (maximum liquidity, maximum cost of carry) • purchases of SIV‘s were generally banned • the minister of finance led an expert group which drafted • new risk guidelines: • - introduction of stress tests - new watchlist (CDS-Spreads of counterparties)

  8. European Stability Mechanism (ESM) Austria participates in ESM • effective lending capacity of 500 billion EUR in discussion • Permanent stability mechanism after June 2013 (before EFSM/ European Financial Stabilisation Mechanism) • initial capital stock of „500 billion EUR plus buffer“ planned • smaller part paid-in shares, the rest in callable shares • discussions concerning auditing rights for NAOs and ECA

  9. Thank you very much for your attention!

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