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Salzburg Says Finances Safe Despite Trading Scandal

Thursday, 17 Jan 2013 | 2:50 AM ET
River Salzach and Salzburg skyline
Allan Baxter | Digital Vision | Getty Images
River Salzach and Salzburg skyline

The Austrian province of Salzburg did not lose money as feared from covert trades by a civil servant, but actually made money from its financial management, the province said on Wednesday.

Salzburg officials have said they were duped by the bureaucrat identified only as Monika R., who has denied any wrongdoing and insisted her superiors knew what she was up to.

Outside experts hired by the state have now concluded that taxpayers face no harm from the episode because the province's financial management arm had a surplus of 74 million euros ($98 million) at the end of 2012. Salzburg officials had feared a book loss of 340 million.

Austrian Finance Minister Maria Fekter and state officials have agreed that Austria should amend its constitution to rule out high-risk public financing such as currency speculation or entering derivative contracts for anything other than hedging.

Details now need to be worked out by mid-year.

Austrian states have 8.2 billion euros of debt, about 8 percent of the country's public debt.

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