Also municipalities and states can now invest in federal treasury
If federal states, municipalities, as well as universities or state-owned companies like ÖBB have savings, they will in the future have the opportunity to invest them directly in government bonds without having to go through a bank.
Federal Treasury for Municipalities and States: Up to 30 Billion Euros Could Additionally Flow into Government Bonds
The public entities can now invest in papers with maturities of 1, 3, 6, and 12 months. Unlike for private individuals, there is also the option to buy federal treasury securities that are due daily. "For the public bodies, it is an interest-bearing investment of liquidity, for the state as a whole it means that the overall state debt is also dampened," Marterbauer promoted the new opportunity. "We (the federal government; note) then have to take on less capital if we receive the liquid funds from the other levels," added Finance State Secretary Barbara Eibinger-Miedl (ÖVP).
The head of the Federal Financing Agency OeBFA, Markus Stix, estimated the liquid funds that public entities currently have as deposits with banks at just under 30 billion euros. If these were fully invested in federal treasury papers, the federal government could reduce its debt by up to seven percent. According to EU debt rules (Maastricht criteria), debts between state sectors would not be considered for the calculation of the national debt ratio, Stix said.
Hoping for Better Credit Rating for Austria
Marterbauer also admitted that it is not to be expected that the approximately 30 billion euros will be fully invested in the federal treasury. He did not want to make predictions about how much additional funds the federal government can raise through the measure, but hopes for a better credit rating for Austria on the financial markets due to a lower debt ratio, which in turn could lead to lower interest rates.
So far, around 110,000 private investors have invested about four billion euros in the federal treasury. These were revived just over a year ago. Marterbauer stated on Monday that he has invested the majority of his private savings in the federal treasury. The federal treasuries were previously offered - from 2002 to 2020 - but were then discontinued due to the low-interest environment at the time.
"Even if municipalities currently do not have vast amounts of free financial resources available, we welcome the fundamental opportunity to now invest money directly in federal government bonds for reserve formation," said Municipal Association President Johannes Pressl in a statement. "This would allow municipalities, for example, to save money through the federal treasury for the construction of schools, water pipelines, sewer constructions, or personnel reserves."
(APA/Red)
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