Austrian state of Carinthia transfers 450 million euro fund to federal government

The Carinthian state government in Austria has announced a significant financial move, transferring its Compensation Payment Fund (Kärntner Ausgleichszahlungsfonds - KAF) to the federal government. This decision, revealed unexpectedly on Wednesday, will make approximately 450 million euros available, all of which is earmarked for reducing the state's existing debt.

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Around 450 million euros will be made available, all of which will be used to reduce the state's debt.

Governor Daniel Fellner (SPÖ) informed journalists that this transfer marks a pivotal moment. The KAF was established in 2016 as part of the resolution process for the Hypo Alpe Adria bank. Its purpose was to provide a legally sound framework for managing the liabilities of the state of Carinthia stemming from the bank's collapse.

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With the KAF, in 2016, as part of the Hypo settlement, a vehicle was created that enabled a legally secure settlement of the liabilities of the state of Carinthia.

Both Governor Fellner and his deputy, Martin Gruber (ÖVP), along with Finance Minister Gabriele Schaunig (SPÖ), who has been involved with the Hypo issue for two decades, hailed the decision. They collectively referred to it as a "historic day" and declared it a final closing of the chapter concerning Carinthia's "failed bank" crisis.

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Both Fellner and his deputy Martin Gruber (ÖVP) and Finance Minister Gabriele Schaunig (SPÖ) - herself involved in the Hypo issue for 20 years - spoke of a 'historic day' and a closing point to the chapter of the Carinthian failed bank.