Bulletin: Austrian Coalition Collapse: Implications For Sovereign Ratings

FRANKFURT (S&P Global Ratings) May 20, 2019--S&P Global Ratings today said that the collapse of Austria's two-party coalition highlights potential challenges to consensus-based policymaking already factored into its current sovereign ratings on Austria (see "Austria Affirmed At 'AA+/A-1+'; Outlook Stable," published March 15, 2019). The resignation of the vice-chancellor and the collapse of the ruling two-party coalition has led to the calling of snap elections. We believe that elections for federal parliament will take place this fall, with potentially difficult negotiations necessary for the formation of a new majority federal government. As was the case in previous electoral cycles, there is some likelihood of looser fiscal policies ahead of the snap election. We also believe that some of the previously

...May 20, 2019 FRANKFURT (S&P Global Ratings) May 20, 2019--S&P Global Ratings today said that the collapse of Austria's two-party coalition highlights potential challenges to consensus-based policymaking already factored into its current sovereign ratings on Austria (see "Austria Affirmed At '##+/A-1+'; Outlook Stable," published March 15, 2019). The resignation of the vice-chancellor and the collapse of the ruling two-party coalition has led to the calling of snap elections. We believe that elections for federal parliament will take place this fall, with potentially difficult negotiations necessary for the formation of a new majority federal government. As was the case in previous electoral cycles, there is some likelihood of looser fiscal policies ahead of the snap election. We also believe that some of the previously enounced policy measures, like the enhancement of banking supervision or implementation of the announced tax reform, could be delayed. Although we don't expect this to impact...

Bulletin