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Banks Leave The Sinking Ship And No-One Cares

By Andreas Unterberger

The Erste Bank is considering: Should they move their headquarters to Prague? This news has been leaked by the Czech president Zeman, a socialist, making it semi-official through his acknowledgement. Since then, however, the media here in Austria still doesn't seem to have the subject on its radar.

But of course those in the know have realised that this move has been something the bank, which has had its headquarters in Vienna for around 195 years, has been considering for some time. What really happens with this plan rests with the government in Vienna. And that means with their tax plans. The regional government, not content with leaving the banks to be hit by the national banking tax also want to add the European banking tax and at the same time reach a new world record in the taxes that the bank is expected to pay. Of course this sort of suggestion is perfectly feasible in the political world, even if no bank in the real world can accept it.

Of course in particular the SPÖ is at the forefront of cashing in on this populist proposal to improve their profile. As far as they're concerned chasing the banks out of the country is in a party political sense completely irrelevant. They have after all completely ruined all the banks that had the misfortune of being linked in with them. Either that or they have driven them out of the country. The only banks remaining are those that are quasi-linked with the citizens rather than politicians.

Of course, opposition from the ÖVP to the move is barely noticeable. They would rather allow a working, major bank to leave the country than be outed as a friend of the bankers. Particularly scandalous is how the future boss of the Wiener Kammer and the Wiener Wirtschaftsbundes reacted. He's not worried about the business location Vienna or the banks – he's more worried about issues dealing with the gay community.

And what about the opposition? Greens and even more so blues (FPÖ) are already active in chasing banks. One hates the ideology of the banks and everything they stand for, the other doesn't have any idea about the economy. As far as the other opposition are concerned – there is nothing to be heard.

The Raiffeisen bank – which has a clearly identifiable and strong connection to the ÖVP – remain in the country, but then again it is right up to its eyeballs in difficulties which stretch all the way from the Ukraine through the "Kurier" to biomass.

It seems that nobody in politics understands exactly how catastrophic the situation is in this country when we don't have any large banks.

But the Chancellor Faymann does not seem to care about that. He thinks that without any problem it's entirely sustainable as infinitum that Austrians banks can happily pay more tax than the banks do for example in Germany. And that's despite the fact that Germany is twice the size of Austria.

It seems as if the Erste boss Treichl has given up any hope that anything like these points will take root in Faymann's head. Politics like this will simply not work. About that there is a 100% guarantee. Even those who do not yet have a school leavers certificate should be able to get their head around it. As for Faymann's coalition partner, they are just hanging beaten in the rigging.

And as a footnote, it's not just the bank taxes and the hostile atmosphere in Austria which is driving away the banks. It is also the individual managers, who can now see how much of their salaries are vanishing in taxes and other costs and how much more money they get to keep even if the salary remains the same if they move to the Czech Republic?

Those individual managers can see that better than most who remain behind because, after all, the bank has been active in the Czech Republic now for many years. And Prague, like Vienna, is a wonderful city.

http://www.andreas-unterberger.at/2014/04/lieber-in-prag-als-in-wien/#sthash.40NXsqJN.dpuf

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