EU says unnamed Austrian bank may face closure
* EU competition chief warns of possible liquidation of bank
* EU Commission says Hypo Alpe Adria sole Austrian case
* Almunia says bank needs bigger restructuring
BRUSSELS, March 8 (Reuters) - An Austrian bank is facing possible closure for failing to restructure, Europe's competition chief said without naming the bank, but a commission spokesman said Hypo Alpe Adria was the country's only bank negotiating a revamp.
"No other restructuring decision is outstanding except HGAA," a European Commission spokesman said on Friday, referring to Hypo Group Alpe Adria, a nationalised bank that was once one of the most important lenders in central and eastern Europe.
The spokesman did not go as far as confirming that the EU Competition Commissioner, Joaquin Almunia, was referring to Hypo Alpe when he said on Friday Austrian authorities had failed to make a convincing case to restructure one of the country's banks.
"This bank started receiving public support in 2008 and still the Austrian authorities have not been able to present to us a final decision or a sensible restructuring plan for this bank," Almunia said, speaking at an event in Brussels organised by think tank Bruegel.
"There should be a bigger restructuring, an orderly liquidation or an orderly resolution plan. We are still discussing," he added.
As the guardian of EU state-aid rules, Almunia has the power to close banks, and his comments could spell the end for Hypo Alpe, which currently ranks as the seventh largest Austrian bank by assets and has a workforce of 7,650.
Hypo Alpe has already received 1.5 billion euros in emergency capital from the Austrian government, and a further 700 million euros has been earmarked for the lender.
The European Commission approved Hypo's recapitalisation last December, but made it conditional on the management presenting a thorough plan to overhaul the group.
A spokesman for the Austrian finance ministry, which effectively runs Hypo Alpe, said it submitted a restructuring plan to the Commission on Feb. 5.
"There are now talks at the expert level," the ministry spokesman said when asked for a reaction to Almunia's comments.
Hypo Alpe's chairman, Johannes Ditz, has said the bank would like more time to sell assets in the bank, which had a balance sheet worth 33.7 billion euros ($43.75 billion) at mid-2012.
Vienna took over the bank in 2009 to avoid a collapse that would have sent shockwaves through central and eastern Europe.
In 2007, two thirds of the bank was sold to Germany's BayernLB for 1.7 billion euros, only for BayernLB to later allege that it was duped into buying the lender. It sold the bank to the Austrian government for 1 euro.
Over the past five years, the European Commission has forced scores of banks in the 27-country bloc to revamp their operations, including shutting down branches and halting dividend and coupon payments in return for emergency state aid.
Several rescued lenders, among them Germany's WestLB, Greek ATEbank, and Ireland's Anglo Irish have been forced to close down. ($1 = 0.7703 euros)
(Additional reporting by John O'Donnell and Michael Shields in Vienna; Editing by Luke Baker and Clelia Oziel)