The ratings on the Republic of Austria are based on Standard&Poor's Ratings Services' view of the resilience of its competitive economy and our expectation that a clearly defined fiscal consolidation strategy will be finalized in late 2010 and subsequently implemented. The extremely strong capacity of Austria's federal government to service its financial obligations is in our view underpinned by its wealthy, modern, and competitive economy; flexible labor and goods markets; and moderate wage policies that support growth, competitiveness, and employment. It is also based on our expectation that following the cyclical deterioration of public finances, which have been aggravated by discretionary fiscal loosening, the authorities will finalize a coherent and credible fiscal consolidation strategy in late 2010 and
