Austria sues German state bank for €3.5bn

GMT 12:05 2014 Friday ,19 December

Arab Today, arab today Austria sues German state bank for €3.5bn

Hypo Group Alpe Adria bank
Vienna - AFP

A long-running legal tussle between Austria and Bavaria took a new twist Friday as Vienna sued the southern German region's state bank for 3.5 billion euros ($4.3 billion).
"Today is no day for jokes," Austrian Foreign Minister Hans Joerg Schelling told reporters in Vienna. "We have studied all the alternatives for months. We owe it to the taxpayers."
The case centres on bank Hypo Group Alpe Adria (HGAA), which had to be nationalised by Austria during the 2009 financial crisis, costing taxpayers in Austria and Bavaria billions of euros in the subsequent winding-down.
At the time HGAA was majority-owned by Bavaria's Bayerische Landesbank (BayernLB), which Austria says failed to provide a complete picture of HGAA's dire financial position.
BayernLB, which also claims it was misled when it bought into HGAA in 2007, this week filed a lawsuit in Vienna claiming back 2.4 billion euros in loans made to HGAA.
Austrian finance minister Schelling said Friday that he remains open to an out-of-court settlement, saying he was "still ready to talk".
HGAA's collapse has also led to numerous other legal cases, including former top executives of BayernLB going on trial in the state capital Munich over the disastrous 2007 purchase.


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