2023-05-06 08:16:56
Business
The municipality of Matrei in Osttirol is facing bankruptcy, which it can no longer avert on its own – there is a risk of insolvency. That would be an unprecedented case since the beginning of the second republic and might have far-reaching consequences for all communities in Austria.
The mountain of debt in the community of Matrei in Osttirol is huge – it amounts to more than 35 million euros. Previously, some of the heavily indebted community’s creditors had rejected an agreement because they were only supposed to receive 80 percent of their claims. Therefore there is a risk of bankruptcy. Legally, this is also possible without further ado, as confirmed by insolvency expert and lawyer Georg Kodek.
However, such a case has never happened before. This is also because the bankruptcy of a municipality would have far-reaching consequences. Municipalities are considered to be particularly trustworthy, including for banks. A sudden bankruptcy of a municipality might increase the risk for all Austrian municipalities and thus generally lead to more expensive conditions, as bank representative Oswald Wolkenstein explained.
Country wants to help community
As in similar cases, the state will probably intervene with a few million euros in support to prevent Matrei i. O. to prevent. One now wants to ensure that the creditors receive the full sums, said State Office Director Herbert Forster: “It is clear to us that everyone should get 100 percent and not just some 80 percent. Appropriate funds from the community equalization fund will also be needed to be able to support a payment plan,” says Forster.
The country must therefore probably pay several million euros. The municipality of Matrei in Osttirol is to arrange a meeting with more than 100 creditors in May in order to work out a precise plan and thus prevent the impending bankruptcy, according to the plan.
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