Battle over the bank levy: Who will pay the bill in the end?

Battle over the bank levy: Who will pay the bill in the end?

The new Austrian federal government, sworn in on Monday, is introducing a controversial bank levy aimed at generating 500 million euros each of the next two years for the crisis-hit budget. This measure is seen as compensating for the banks' significant profits in recent years. There were months of heated discussions about this levy during coalition negotiations, with banks and business representatives vehemently resisting it, while the Chamber of Labor and unions advocated for the measure, as the business magazine Eco reported.

Financial implications and expert opinions

The introduction of the bank levy could further impact already restrictive lending, warned Gunter Deuber, head of Raiffeisen Research. Despite stable capital resources, Austrian banks are already adapting to rising risks and falling interest rates and are expecting lower returns. Experts like Thomas Url from WIFO see the tax for a specific industry as a threat to Austria as a business location, which could deter potential investors. Does the industry really need a special tax that could reduce its equity and further restrict lending?

On the other hand, numerous economic experts such as the current National Bank Governor Robert Holzmann support the levy as a sensible contribution to budget restructuring. They see the need to hold crisis winners accountable. The Momentum Institute calculated that a bank levy could bring the state up to 850 million euros annually. AK President Renate Anderl emphasizes that it is high time to demand that the banks that benefited from the crisis do their fair share of the country's financial stability, ORF reported.