Friday, 31. October 2014 - 04:10
13. 12. 12. - 13:00
Austria's Mozart region of Salzburg is facing a major financial crisis after an alleged rogue trader gambled away an incredible three billion euros on risky ventures on the international financial markets.
Alleged rogue trader Monika R, 45, was hired in 2001 to speculate with taxpayers money and made massive losses in 2006 after she bought Icelandic sovereign bonds.
The law graduate covered the losses by getting one of her staff to sign them off - then forged his signature after that - and used a complicated system to cover her tracks until 15 October, 2012, when the scandal first came to light.
Salzburg refers to the region of the same name that is one of nine federal provinces that make up modern Austria. The city of Salzburg is the capital of the province. The region is famous as the location for the Sound of Music film, as the birthplace of Mozart and for the Salzburg Festival that is attended by Europe's elite including royals like Prince Charles. It is the province of Salzburg that has lost the money.
The Salzburg province financial director (SPÖ) David Brenner learned about the scandal on 15 October, but instead of going public with the fact that there were 253 undeclared derivative ventures in addition to the 43 on the books - it was kept secret for six weeks.
In that time they hired an investigator who Austrian media has now revealed was a former business partner of hers at a German bank that had earned around 30 million euros on the speculative deals and who - they allege - spent that time covering her tracks.
The existence of 253 illegal, secret derivative investments in addition to the 43 on the city's books was only discovered when Rathmayer, who had not taken a holiday for six years, was forced to go on leave so that irregularities could be checked.
She objected so strongly that colleagues suspected she was suffering from burn-out.
Salzburg's governor Gabi Burgstaller has already made a tearful apology to the people of the city, and has not ruled out stepping down.
She said: "I would like to express my sincerest and deepest regret and to apologise to the people of Salzburg for the impression that now exists that we, the regional government, have left Salzburg in grave turmoil.
"We have bought turbulence to what is one of the most wonderful regions of the world.
"I promise that I will do whatever I can to prevent damage to the province, and if it turns out that I did something politically wrong or that I misjudged the situation, I am prepared to step down."
When police arrived to question her mother-of-one she reportedly said: "Don't take my baby away," and claimed she had only wanted to help the city - but since then her position has hardened and through her lawyer she claims that all of the deals were sanctioned by her superiors.
Her lawyer Herbert Huebel said not only is she innocent of any wrong doing but that her employers knew what she was doing.
He said: "It is always easy to accuse, buy my client is innocent of the charges - of that I am positive. She had complete authority for the business transactions both from her superiors and politically. That authority included complete freedom for the type of business that nobody complained about for years when it all seemed to be going well.
"The Federal Province of Salzburg wanted to get involved in this type of business, and my client carried it out. She did not operate alone, she reported to her managers and political masters. And she never pocketed a single cent - it was all for Salzburg. She has been questioned and has handed over the documents that prove her role, the truth will now come out.
"She herself feels herself 100 per cent not guilty. I believe that she will not be charged as she did not do anything wrong. "
The scandal comes at a bad time, there are early elections taking place. It may be that the real situation only emerges after that. When it was first announced the loss was put at 340 million, today Austrian media have put it at between 1 and 3 billion euros.
It was also warned that Salzburg might be the tip of the iceberg - and that other local authorities might be covering similar bad debts from risky investments.
Consultant Gert Edlinger from HLC Communications estimates a potential figure of 8 billion euros in local government losses due to speculation in structured financial products gone wrong in Austria.
Rare Bald Ibis Makes Microlight Flight To Italy
The project to introduce an extinct bird back to Europe is hailing success after successfully negotiating a new route over the Alps and training 14 Northern Bald Ibises how to fly south to winter feeding grounds in southern Tuscany.
Brit Soldier Rescued After Climbing Mountain In T Shirt
A British soldier who tackled the frozen Austrian Alps wearing just shorts and a T-shirt has been rapped by officials after he had to be rescued from the snowy peak.
Jobless Footballers Join Dole Rangers To Showcase Their Talent
Austria's job centres are entering the big league - by creating a football team to allow jobless footballers to showcase their talent and get work.
Good manners guide for Arabs dropped by Salzburg tourism officials
Tourism chiefs in Salzburg have been forced to withdraw a controversial etiquette guide for Arabs that aimed to stop them trying to haggle over prices, cooking in their rooms, and dumping their litter around the region.
Strongman pulls worlds largest twinjet plane out of hanger
A strong man known as the "Austrian Rock" has notched up his 16th endurance world record, this time by pulling a Boeing 777 plane from its hangar at the Vienna International Airport in Schwechat.
Austria receives record visitors from UAE
Austria received a record amount of visitors from the United Arab Emirates in 2013, according to the Austrian National Tourist Office.
Cheetah enclosure rebuilt after run of escapes
After a run of great escapes from the cheetah residents of Salzburg Zoo, the big cat enclosure has been rebuilt in an effort to prevent further breakouts.
Hosting Eurovision 2015 in Austria already complicated
The search for a suitable location for next year's Eurovision Song Contest taking place in Austria is already hitting complications with still 11 months to go until the event.
FIFA extend Taboga ban worldwide
The life time football ban imposed upon player Dominique Taboga by the Austrian Football Association (Ã–FB) in February for match-fixing has been extended by FIFA today to include worldwide activities.
Possible move to Newcastle for Soriano
Football player for Salzburg Jonathan Soriano has been linked to a move to Newcastle United, according to reports in Austrian media.
The most popular stories –
last 7 days