April 8, 2014 / 10:07 AM / in 3 years

Austria says 2014 deficit won't exceed 3 pct despite Hypo - finance minister

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VIENNA, April 8 (Reuters) - Austria will limit its 2014 budget deficit to no more than 3 percent of gross domestic product (GDP) despite a renewed hit from ailing state lender Hypo Alpe Adria, Finance Minister Michael Spindelegger said on Tuesday.

Austria plans to set up a "bad bank" to wind down Hypo assets, boosting state debt to around 80 percent of GDP and raising the budget deficit close to the 3 percent ceiling allowed under the EU's Maastricht criteria.

Hypo, which has already received 4.8 billion euros in state aid, said last month it needed 1.43 billion more to cope with writedowns and maintain minimum capital levels until it transfers assets to the bad bank in September. (Reporting by Michael Shields; Editing by Hugh Lawson)

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