editorial staff

Unusual outcome of the search for a decision for loans from the city of Schrems for 3.67 million euros: After intensive debate in the local council and the interruption of the meeting, SPÖ Finance City Councilor Michael Preissl changed his application from models with fixed interest rates to variable loans.

The loans are intended to finance projects from 2023. The lion’s share goes to school renovations (1.6 million euros), sewer and water pipe renovations (1.375 million euros), both with a term of 25 years. There were also loans over ten years for flood protection (300,000 euros), renovation of the business premises at Schulgasse 4 (200,000 euros) and road construction (180,500 euros). Preissl spoke of very different bank offerings, including the interplay between fixed and variable interest rates. One institution took itself out of the game by only offering its conditions for the case in which all five loans were allowed. Preissl finally submitted an application for models with fixed interest rates between 4.05 and 4.85 percent for the individual projects.

Finance city councilor for fixed interest rates as a “rather cautious option”. The city council had still decided on variable interest rates, asked ÖVP parliamentary group leader Tobias Spazierer about the change of heart of the finance city councilor and deputy mayor. Preissl says: The offer was opened at relatively short notice, but upon closer calculation the pivot turned out to be a better option. If the 6-month Euribor recovers, in the best case scenario you will get 80,000 euros cheaper, but given the current interest rate trend, he is “more in favor of the cautious option.”

ÖVP walker: “Don’t just get hit.” He could imagine a fixed interest rate, says Spazierer. “But I would have liked to have discussed this beforehand and not just had it handed to me. We’ll know in 25 years what’s cheaper.” With a fixed interest rate, you’re definitely committing yourself to more than four percent for the entire term; variable interest rates would reflect economic developments and enable significantly better conditions in better times.

Remembrance of the “financial scandal” in Harbach. “I would be careful – otherwise we would get a call from Sven Hergovich,” smiled parliamentary group colleague David Süß. Hergovich, economist and SPÖ-NÖ leader, identified a financial scandal in September in a loan with variable interest rates in the municipality of Moorbad Harbach, which is led by Federal Council Vice President Margit Göll (ÖVP). As reported, a variable-interest loan for 186,500 euros in Harbach was ultimately repaid early as a result of SP criticism.

The mayor of Schrems, Peter Müller (SPÖ), who has worked professionally in the banking sector for decades, also admitted that a fixed interest rate agreement is binding for a very long time: “I think we have done relatively well with variable interest rates in the past.”

Changed my mind during the break. Michael Preissl suggested a ten-minute break in the meeting because he didn’t want to stand in the way of a majority. During that time he finally changed his mind. The finance city council changed its application for variable interest rates with surcharges on the 6-month Euribor – the two million-dollar projects at Bank Austria/Unicredit, the three smaller loans at Hypo NÖ. Decided unanimously.

Will Sven Hergovich call now?