VZCZCXYZ0002
PP RUEHWEB

DE RUEHVI #2082/01 2191158
ZNR UUUUU ZZH
P 071158Z AUG 07
FM AMEMBASSY VIENNA
TO RUEHC/SECSTATE WASHDC PRIORITY 8274
RUEKJCS/OSD WASHDC PRIORITY
RHEHAAA/WHITEHOUSE WASHDC PRIORITY

UNCLAS VIENNA 002082 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EUR/AGS, INR/EU, AND EUR/PPD FOR YVETTE SAINT-ANDRE 
 
OSD FOR COMMANDER CHAFFEE 
 
WHITEHOUSE FOR NSC/WEUROPE 
 
 
E.O. 12958: N/A 
TAGS: OPRC KPAO AU
 
SUBJECT: AUSTRIAN MEDIA HIGHLIGHTS: August 7, 2007 
 
 
Bawag Trial Continues 
 
¶1. All Austrian median continue to report on the trial of nine 
former managers of bank Bawag, which has entered its fourth week. 
The key question is why the bank under CEO Helmut Elsner gave 
co-defendant and former investment banker Wolfgang Floettl hundreds 
of millions of dollars in additional funds in the fall of 1998, 
following earlier disastrous losses from currency speculation. On 
Monday the presiding judge announced that the trial would be 
extended at least until the middle of November, says semi-official 
daily Wiener Zeitung. Centrist daily Die Presse, mass-circulation 
tabloid Kronen Zeitung and liberal daily Der Standard meanwhile 
focus on the fact that Guenter Weninger, a former president of the 
bank's board of directors, has accused former Union Federation 
(OeGB) boss Fritz Verzetnitsch, claiming he had been informed since 
1998 about the huge losses the bank incurred because of Floettl's 
speculation deals." According to the Presse, Verzetnitsch could even 
be facing a prison term, should it turn out his statement before the 
parliamentary investigative committee was a lie that he had only 
been informed about the disastrous deals in December 2000. 
 
 
Experts Oppose Early Tax Reform 
 
¶2. Austrian financial experts have now joined in the debate over tax 
reform, warning such measures should not simply be brought forward, 
as the money needed to finance reform "must be earned first," ORF 
online news writes. The current positive economic trends could just 
as easily turn into an economic lull, which is why the budget would 
also have to be adapted. Furthermore, they argue that what is 
required is not just a "hasty" reduction of the tax burden, but 
general structural reform of the entire tax system. 
 
 
The Shiites Are Gaining Ground 
 
¶3. A feature article in semi-official daily Wiener Zeitung suggests 
that with Iran's growing influence, Shiites are experiencing a 
"renaissance." In Iraq in particular, Tehran appears to have become 
more influential than the United States, the daily says. Iran has 
clearly profited from the civil-war-like situation and the 
increasingly aggressive dispute between Sunnis and Shiites in Iraq, 
and as a result the Shiites' power in the region is growing. Even 
Washington has had to recognize the fact that Iran, in its role as a 
regional power, has been acting far more skillfully and gained much 
more support in Iraq than the US. It is therefore not only the 
Sunnis, who are deeply concerned about the possibility of Tehran 
emerging as the hub of a Shiite-controlled Middle East, says the 
Wiener Zeitung. 
 
 
190,000 Weapons from the US Have Disappeared 
 
¶4. ...headlines centrist daily Die Presse. The daily's Washington 
correspondent Norbert Rief reports that arms provided by the United 
States for the buildup and use of Iraq's military, police and 
security forces have most likely ended up in the hands of Iraqi 
rebels. Sourcing the Washington Post, Rief explains that about 30 
percent of all handguns and semi-automatic rifles the US has 
delivered to Iraq since 2004 have disappeared without a trace. 
Presumably, Iraqi soldiers or police have been selling these weapons 
individually, and some units are even believed to have offered 
entire shipments of guns on the black market. It is therefore 
conceivable that Iraqi insurgents are fighting US troops with just 
those weapons designed to increase security and stability in the 
country, Rief says. The correspondent quotes an analyst from the 
Center for Defense Information as saying that Washington "has no 
clue where those guns are now," and adds that it appears the US is 
unwittingly supporting the Iraqi resistance with its own weapons. 
 
 
Interview with Shimon Peres 
 
¶5. In an interview with mass-circulation daily Kurier, Israel's new 
President Shimon Peres discusses his country's stance on Hamas and 
Iran, and Israel's image. Hamas, he says "does not want to talk to 
us! We removed the settlers and the soldiers from Gaza, but they 
continue with their attacks. If Hamas wants to talk, all they have 
to do is stop firing at us." The question of whether talks without 
Hamas are possible "is a decision that depends on the Palestinians. 
We'll negotiate with President Abbas. He was elected by 60 percent 
(of the voters) and represents all Palestinians." Abbas "can launch 
a political debate immediately, as early as today in Jericho. At the 
same time, economic progress is necessary. Today, political changes 
are triggered by economic development. Politics creates boundaries, 
while the economy governs relationships. Within this context, Hamas 
will be left behind isolated, and lose all support." Iran, says 
Peres, is "definitively" a threat to Israel: "President Ahmadinejad 
worships terror more than he does Allah. The destruction of Israel 
is more important to him than Iranian interests. This, however, 
boosts his opponents inside Iran. The banking boycott is having an 
impact already. That is why concerted action between the US, Russia 
and the EU is more important these days than their dialogue with 
Iran." 
Kilner