The European Union Commissioner for Competition Joaquin Almunia has signaled that he is not inclined to extend the deadline for the restructuring of the nationalized Austrian bank Hypo Alpe Adria.
-More time is not a solution- said Almunia in an interview with the Austrian radio station ORF, broadcast late Tuesday evening. Delaying decisions would be very costly for taxpayers and has not resolved the bank’s problems so far, he added.
In March, Almunia stated that Hypo could be shut down if an appropriate restructuring is not implemented.
The European Commission is demanding that the bank be divided into several parts by the end of the year or return more than two billion euros in state aid it received since 2009.
Last month, a step was taken in the restructuring process after the bank reached an agreement to sell its operations in its home country of Austria to investor Sandživ Kanoria for 65.5 million euros.
Hypo also intends to close its banking branch in Italy and sell its banking network in the Balkans, as well as dispose of assets that do not belong to its core business.
The bank has requested more time for restructuring due to unfavorable market conditions that complicate the sale of parts of the business.
The government in Vienna fears that a hasty sale could harm public finances.
Austrian Chancellor Werner Faymann estimated that shutting down Hypo could cost up to seven billion euros.
