It's been more than a year since Austrian neo-fascist leader Jörg Haider was killed in a car crash following a night of drunken debauchery but his ghost haunts the taxpayers of the Free State of Bavaria. The details of the scandal surrounding the ill-fated acquisition of Haider's house bank - the Hypo Group Alpe Aldria (HGAA) by the the Bavarian state-owned bank BayernLB - are just now beginning to become clear. But one thing is already certain: the taxpayers of Bavaria have lost billions of Euros:
(Haider's) legacy however, is now costing billions, tearing holes in the budgets of Carinthia and Germany’s Bavaria. The crisis surrounding the Hypo Group Alpe Adria (HGAA) bank, in which Haider played a central role, is a prime example of the coming together of high finance and right-wing politics.
A week ago, the Austrian government took control of ailing HGAA to prevent the immediate collapse of the sixth-largest banking house in the Alpine republic. In the settlement, the previous owners—Bayerische Landesbank (BayernLB), the province of Carinthia, and Austrian mutual insurer Grazer Wechselseitige—each received one euro. They had collectively pumped in several hundred million euros to try and secure the survival of the bank.
The state-owned BayernLB, which became the majority owner two and a half years ago, must now deal with losses of nearly €4 billion. These will largely fall on the Bavarian state treasury and will be recouped through cuts in public spending. A year ago, the state of Bavaria pumped in €10 billion to protect Germany’s second-largest Landesbank (owned 94 percent by the Bavarian government) from bankruptcy.
The fate of HGAA is closely linked with the rise of Haider’s ultra-right Austrian Freedom Party (FPÖ) and its successor, the Alliance for the Future of Austria (BZÖ). Haider, who served 12 years as governor of Carinthia, used the bank to finance his political projects, enrich his friends in the party, and buy votes.
Under Haider’s charge, the financial institution, founded in 1896, rose from being a provincial bank into a market leader in the Balkans. The bank funded Haider’s money-losing prestige projects in Carinthia, such as the luxurious Schlosshotel Velden and the floating stage on the Wörthersee in Klagenfurt, as well as financing the province’s growing debts.
[...]In the manner of an emperor in ancient Rome, Haider used the cash flow from HGAA to win the support of the voters. He introduced various forms of family benefits, payments for commuters, heating and diesel fuel subsidies, and an inflation relief payment. Under Haider’s successors, young people who acquired a driver’s license were given €1,000. These monetary gifts did little to lessen social inequality; with 76,000 people at risk for poverty, Carinthia is the second poorest of Austria’s provinces—but it ensured that the BZÖ won substantial majorities.In the successor states of Yugoslavia, the HGAA financed a semi-criminal and corrupt elite, which resembled the one surrounding Haider. “In Macedonia, Bosnia or Montenegro, banking geniuses were drawn hypnotically into the wake of Jörg Haider, needy entrepreneurs who could make good use of inexpensive bridge financing for their cash flow,” the Frankfurter Allgemeine commented.
Besides Haider and his corrupt, right-wing friends, who benefited from Bayern LB's overpriced takeover of the failing bank? The list of investors who profited while taxpayers lost everything includes the Flick family - who made its fortune using slave labor during the Third Reich and members of the Piëch family dynasty, who control VW and Porsche.
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