Reform at a stately pace
Spurred by the prospect of economic and monetary union (Emu), Austria is opening its markets to European investors, reforming its stock exchange and leading the charge into eastern Europe.
Elegant Viennese may still stroll beside the Opera House on summer evenings to the sound of Strauss waltzes. But that is one of the few certainties that remains in a society facing three challenges: preparing for the euro, coping with further deregulation particularly in the banking sector, and exploiting the opportunities in eastern Europe.
"[All these developments] are important for Austria. But the most important is eastern Europe, which is making an important contribution to [banks'] consolidated profits," says Gottfried Halbwidl, senior vice president of treasury-capital markets at Österreichische Postsparkasse (PSK), the state-owned post office bank which is to be partly privatized (49%) before the end of the year.
Emu has big implications for managers of debt in small European states, and Austria has been one of the countries quickest to position itself for the impending pan-European government bond market. According to Helmut Eder, manager director of the Austrian Federal Financing Agency, the key to keeping investors loyal is to issue bonds that can become fungible with larger, euro-denominated issues.