Blue explosives

Coalition: Kickl wants a bank levy

Kickl tests his power.

(Bild: AFP/Alex HALADA)

There is a certain irony here: the negotiations on the "Zuckerl" coalition were ended because of the SPÖ's demand for new taxes. Since then, the Reds have accused the ÖVP of preferring to make Herbert Kickl chancellor rather than asking the banks to pay. Now Kickl himself is putting pressure on the ÖVP for a bank levy.

The SPÖ had proposed an increase in the bank levy as an alternative to inheritance and wealth taxes to the ÖVP and NEOS during the three-party coalition negotiations. Specifically, this involves a temporary "special levy" on excess profits, which could be used to siphon off up to seven billion euros from the profits of financial institutions for the duration of the seven-year budget consolidation.

Banks make billions in profits

In 2023, banks in Austria made a profit of 14 billion euros, and the sum is likely to have been similar in the previous year. In the first half of 2024, profits amounted to seven billion euros. That is considerably more than in previous years. In 2022 it was ten billion euros.

The ÖVP and NEOS reject the SPÖ's plans, while the Pinken speak of "retro-socialism". The Social Democrats, on the other hand, are accusing the People's Party of preferring a Chancellor Kickl to a bank levy. If it were up to the Freedom Party, both would come: Kickl and the bank levy.

The FPÖ is of the opinion that a bank levy would be compensatory justice towards the Austrians, who for their part supported the banks during the 2008 financial crisis. This bank restructuring caused costs amounting to ten to eleven billion euros. Austria helped the banks out here.

Reminding banks of the support provided in 2008
Now - in this financially tense situation, which was not caused by the FPÖ - the Blue Party expects the banks to remember this. The ÖVP is also called upon to exert appropriate influence on the banks in order to ensure their participation in the budget restructuring. This is particularly important to Herbert Kickl, according to negotiating circles. "Spare pensioners, but involve the banks" is the FPÖ's motto.

The bank levy

Following the 2008 financial crisis, in which financial institutions worldwide were supported with taxpayers' money, a bank levy was introduced in most European countries in order to offset the costs for the states. In 2010, the EU recommended this step to the member states. It was introduced in Austria in 2011 and initially amounted to EUR 500 million per year.

In 2014, it was tightened up again and the special contribution was increased from 25% to 45%. This brought in an additional 90 million euros. In 2016, the revenue already amounted to 640 million euros per year.

From 2017, the levy was reduced to a total volume of just 100 million euros.

Are banks and the ÖVP facing a blue storm?

(Bild: Krone KREATIV, stock.adobe.com)

The fact that the ÖVP is so vehemently opposed to the banks contributing to the budget restructuring is explained by their proximity to Raiffeisen. For example, the ÖVP's statement of accounts for 2023 includes a membership fee of 100,000 euros from the Austrian Raiffeisen Association.