The Austrian city of Graz is heading toward insolvency, and a coalition of Communists, Greens, and Social Democrats is to blame. This ultra-left-wing ruling faction deposed the moderately right-wing coalition of ÖVP and the FPÖ during the election in September 2021. Now, 14 months later, the city is facing financial collapse, according to a report by the director of the City Audit Office, Hans-Georg Windhaber. He warns that the city council may be disempowered leaving leadership in the hands of a government commissary. New elections may be pending for 2023.
Windhaber has chosen to counteract government failure by denying permits to projects exceeding €2.4 million. The financial counselor of Graz, Manfred Eber of the Communist Party, admitted there had been budgetary problems, but expressed “surprise” that Windhaber would release such a report, since a new medium-term plan was scheduled to be released soon. Eber preferred to blame the previous council for the disastrous financial situation, under whose rule per-capita debt rose from €3,561 in 2017 to €4,783 in 2021.
His predecessor, Günter Riegler of the ÖVP, rejected this accusation and instead blamed the Communist-led city council for the empty coffers of Graz. He pointed to inefficient crisis management, “expensive social measures,” and several investment projects valued in the millions that had been passed as recently as October.
Mayor Elke Kahr of the Communists tried to smooth the waves in a statement shared on her party’s website by denouncing the crisis as rumor:
We are not facing ‘bankruptcy,’ nor are we facing ‘new elections,’” said Kahr. “The budget is secured for this year and next year. Important projects will continue to be implemented for the benefit of the people of Graz. It is no secret that we have inherited considerable burdens from the previous government. In addition, of course, the current cost increases in the energy and construction sectors, rising interest rates and the necessary personnel costs are putting the city under pressure, as is currently the case with every municipality in Austria.
State Governor Christopher Drexler of the ÖVP confirmed that a ‘disempowerment’ is “not a realistic scenario yet;” such a drastic measure would only be taken if no other measures were successful. Drexler stressed, however, that he was “worried about the apparent developments” and emphasized that the same rules for developing a budget applied to the city of Graz, as to all other cities and towns in the state of Styria.
