A Greek insolvency would cost Austria around 1
billion euros (1.3 billion dollars) in bailout money for
Kommunalkredit, one of its banks most exposed to Greek debt, dpa quoted Finance
Minister Maria Fekter as saying Saturday.
Her comments followed a decision by US rating agency Moody's to
revise its evaluation of Greek sovereign debt to default status.
There is a possibility that Greece might become insolvent and
Austria would have to make good on its loan guarantees, the minister
told radio Oe1.
'Then this bank would suddenly need a lot of money,' she said.
Kommunalkredit, which specializes in the financing of
infrastructure projects, was nationalized in 2008 following the
global financial crisis, with its risky assets split off into a
As of the middle of 2011, both units had 1.2 billion euros of
outstanding Greek debt on their books, mostly in the form of
government bonds and credit default swaps.
Earlier this week, Fekter announced that the government would
spend more than 1 billion euros to partly nationalize
Oesterreichische Volksbanken, the third Austrian financial
institution to be nationalized since 2008.