Joerg Haider may be long dead, but the colourful far-right politician who praised Hitler's "orderly" employment policies is coming back to haunt Austria's public finances, potentially with wider reverberations throughout the eurozone.
Haider sent shock waves throughout Europe when his party came second in elections in 1999 and entered the EU member state's government. He died in a drink-driving accident in 2008; today a shrine marks the spot.
But since his death a string of scandals has emerged, with allegations that Haider, on top of questionable comments about the Third Reich and railing against foreigners, engaged in some dodgy dealings and was not the wisest of administrators.
The best example, and the one haunting Austria now, concerns Hypo Alde Adria (HGAA), the local public bank in Carinthia, the picturesque southern Austrian province where Haider was for many years state premier.
Under Haider, Hypo embarked on a breakneck expansion into the Balkans as well as Italy and Germany via acquisitions and risky investments, expanding its balance sheet fourfold to some 40 billion euros ($43 billion).
- Taxpayers to the rescue -
In 2009, with Haider dead and the global financial crisis wreaking havoc, Hypo came close to collapse as economies contracted, and billions of euros in loans and risky investments turned sour. Austria nationalised the bank.
BayernLB, the Bavarian state lender in neighbouring Germany, received a symbolic three euros for a stake that it had bought two years earlier for 1.6 billion euros, and Bavarian and Austrian taxpayers were saddled with billions in losses.
Bavaria is ruing its involvement to this day, with Austria and Bavaria engaging in a war of words and launching multiple lawsuits against each other.
Subsequently Hypo was split up, with the bad debts ring-fenced in a "bad bank" known as Heta Asset Resolution.
But even though Austria is so far already 4.5 billion euros into Heta, this is not the end. Experts in late February filed a report to the government doubling the estimated size of Heta's capital shortfall to 7.6 billion euros.
- Crisis meeting -
Days later, in a Sunday crisis meeting on March 1, Austria's financial regulator decided that enough was enough, and that during a 15-month moratorium no more of Heta's debts to others would be paid.
The move, Chancellor Werner Faymann said, was "unavoidable".
In the meantime, Austria wants to make use of new rules being introduced across the eurozone to "bail in" creditors -- in other words convince them to take voluntary losses on money owed to them, possibly of 50 percent.
Otherwise, the state of Carinthia, which is on the line for an unpayable 10.2 billion euros for guarantees on Heta loans -- more than four times the annual state budget -- faces possible bankruptcy.
Even though such a move would be almost unheard of in Europe -- in the United States the city of Detroit did so in 2013 -- Vienna is refusing to step in and the economy minister has suggested bankruptcy for Carinthia might even be on the cards.
- Greece comparison -
But whether a "bail in" or a Carinthian bankruptcy clearing the slate would be accepted by Heta's creditors remains to be seen, since this might have wider consequences for banks throughout Europe holding Heta debts.
Already banks in other countries, such as Franco-Belgian Dexia and Germany's Deutsche Pfandbriefbank, are warning of losses, with uncertain wider consequences. It could also unleash an avalanche of legal claims.
The situation in Carinthia has been likened by some to that of Greece, which benefitted from a massive restructuring of its debts. But Austrian Finance Minister Hans Joerg Schelling said Tuesday that any such comparison was "completely inappropriate".
Moody's, while downgrading Carinthia's debt, on Friday said that "the steps taken so far are adding higher uncertainty to developments ... Susceptibility to an adverse scenario has increased as a result."