BAWAG

   (Bank for Labor and Economic Development / Bank für Arbeit und Wirtschaft)

   Established in 1922 as the Worker’s Bank (Arbeiterbank) by the Austrian Social Democrat and political leader Karl Renner, the bank was initially capitalized by the Social Democratic Party (SDAP). Liquidated for political reasons in 1934, it was refounded in 1947 and named the BAWAG (Bank for Labor and Economic Development) in 1963. It maintained its identification with the workers’ movement and with the postwar Socialist Party of Austria (SPÖ). In 1995, the Provincial Bank of Bavaria (Bayerische Landesbank) acquired 45 percent of its shares; the Socialist-sponsored supermarket conglomerate Konsum and the Austrian Federation of Trade Unions holding another 45 percent between them.

   By then BAWAG had become a major economic force in Austrian banking, following goals and business strategies firmly rooted in the dynamics of late-20th-century global capitalism. Merger and acquisition maneuvers were a central part of its operations. In 2000, BAWAG took over the venerable Austrian Postal Savings Bank (Österreichische Postsparkasse) to further enlarge its network of branches throughout the country. By 2006, however, dishonest bookkeeping practices hidden in offshore activities, reckless speculation, and unsavory fiscal relationships with the upper echelons of the SPÖ and organized labor, as well as reckless speculators, had badly damaged BAWAG’s fiscal standing and the reputations of its highest management in the international banking community.

   See also Trade Unions.