18. 01. 12. - 16:20

All-round acclaim for financial transaction tax

A vast majority of Austrians want a tax on financial transactions.

The Social Democrats (SPÖ) claim that Chancellor and party leader Werner Faymann was the first political leader to suggest the introduction of such a levy a few years ago. Social Democrats and Socialists across Europe are in favour of the idea.

High-ranking representatives of conservative parties in several countries threw their doubts about a worsening of the economic climate such a tax could cause overboard in the meantime.

French President Nicolas Sarkozy said earlier this month that his country may "go it on its own" if some members of the European Union (EU) and the Eurozone kept refusing setting up such a charge too.

Now a poll revealed that almost nine in 10 Austrians support the idea that financial transactions could be charged. Public opinion research group Oekonsult said yesterday (Tues) that 89.1 per cent of residents of the country spoke out in favour of the idea.

Faymann said it must not happen that workers and employees had to bear the brunt of the crisis while speculators got away with it. The Austrian chancellor said a tax on financial transactions could be an important piece of the puzzle. Faymann called for stricter regulations of the world’s financial markets. He can be certain of left-wingers’ support across the continent for his appeals.

The European Commission (EC) is campaigning in favour of the idea of a tax on financial transactions as well in the meantime. Some financial market experts claim that such a levy would not change anything for the better as it may tempt traders to look for further loopholes allowing high-risk deals. Companies and banks may relocate their assets if the tax comes into effect all over Europe or in the 17 EU member states which use the Euro, according to conservative columnists.

Oekonsult interviewed around 1,100 people for its latest poll which also showed that only 33.9 per cent of Austrians "were surprised" by Standard & Poor’s (S&P) decision to reduce Austria’s credit rating.

The country’s solvency and financial trustworthiness is rated at AA+ by S&P as of last Friday, down one notch from the best possible ranking (AAA). The US American credit rating agency lowered the ratings of eight other EU countries on the same day.

Oekonsult said that 70.4 per cent of Austrians said that the Austrian government coalition of Social Democrats and the People’s Party (ÖVP) "proves sense of responsibility and problem-solving competence" in the current crisis.

Nestle manager Peter Brabeck-Lemathe said on Monday that AA+ "is a fantastic rating". The Austrian businessman identified the early age many Austrians retired at as one of the country’s biggest problems these days. Statistics show that the average pension age is 58 despite laws ordering men to work until 65. Women employed in Austria must not retire before turning 60 except in cases of serious illness.

S&P expressed concerns considering the intense business activities of Austria’s biggest banks in Hungary. Experts think that the Republic of Austria may not be financially strong enough to rescue the finance institutes from bankruptcy if the economic situation in Hungary worsened.

Austrian National Bank (OeNB) Governor Ewald Nowotny said S&P "acted politically motivated" while Austrian President Heinz Fischer announced he would have appreciated had the rating agency decided to await the outcome of the government’s ongoing budget talks.

SPÖ and ÖVP want to reduce the state debt in the coming years but are at odds over whether new taxes should be set up to create immediate effect. Various reforms could positively influence Austria’s budget deficit and the country’s sky-high debt only with some delay.