Fekter: This decision is a yellow card for Austria
The Austrian government will have to get even more serious about the budget consolidation measures it has been planning
Press Release, 16 January 2012
“Our debts are a millstone around our necks, because they will make us more and more dependent on the capital markets”, Austrian Finance Minister Dr. Maria Fekter warned, upon learning that American ratings agency Standard & Poor had downgraded Austria from its triple A rating, the highest given by S&P.
“There is a debt crisis here in the EU, but the world is still waiting for reforms by the EU countries in question," Dr. Fekter went on to say. “In Austria, state debt will become a risk if it continues to grow. This downgrade is a very clear signal that we need to do more than we have been doing in order to pay that debt down”, the Finance Minister emphasised. “My hope is that this will now prompt the opposition parties to wake up and embrace the idea that we have to enshrine a debt brake in the Austrian constitution, as well”, Dr. Fekter stated.
At the same time, Finance Minister Fekter pointed out that the two other big ratings agencies (Moody’s and Fitch) had taken account of Austria’s buoyant economy and the steps towards budget consolidation it had already taken, and on that basis had once again awarded Austria a triple A rating. “The fundamentals of the Austrian economy are really very sound. 2011 was a much better year for the domestic budget than we had anticipated. Nevertheless, Austria has to aim for a zero deficit in order to be in a position to drastically cut its debt over the long-term. We cannot put ourselves in the position of having to borrow even more in order to pay interest on old debt. We have to consolidate our national budget no matter how international ratings agencies rate our creditworthiness”, Finance Minister Dr. Fekter stated.
“We must not allow others to make us jittery at this point. What we must now do is to energetically continue with the austerity measures and reforms we have been planning”, Dr. Fekter stated in closing.