Consensus builder

The Austrian MEP has reinvented himself as a banking guru.

Two years ago, Othmar Karas seemed on track to become Austria’s foreign minister. Fellow party members had already begun to congratulate him on his new post. But then, only hours before the official nomination, Karas learnt that the position was to be given to Michael Spindelegger instead.

To add insult to injury, the Austrian People’s Party (ÖVP) then decided to demote Karas, the leader of its delegation in the European Parliament, to second on its party list for the European elections in 2009. In the party’s headquarters in Vienna, it was generally acknowledged that Karas, who was and remains a vice-president of the European People’s Party, had been a top-notch leader in the Parliament. But while giving him credit for his expertise and dedication, they were looking for someone more extrovert and given to sound-bites than the low-key, soft-spoken Karas. They gave top billing to Ernst Strasser, who had served as interior minister in 2000-04.

For a while, it looked as if a battle was brewing: Karas announced he would challenge Strasser for the leadership of the Austrian conservatives in the European Parliament. Ultimately, Karas opted not to, a decision for which some observers criticise him. Instead, he tried to turn the humiliation into a source of satisfaction, winning more than 100,000 preference votes – a clear sign, in his view, of approval by the electorate. (It was also higher than Strasser’s tally.) And now, in his third term as an MEP, he is steering through the Parliament one of the most important responses to the financial crisis, legislation on banks’ liquidity. “He has made the very best of a difficult situation,” argues Hannes Swoboda, an Austrian Socialist MEP.

Karas has politics in his DNA. Going back as far as his great-grandfather, his family, by tradition teachers, has been active in politics. Karas, now 52, took up politics at a young age. Aged 23, he beca-me leader of the ÖVP’s youth wing. Two years later, he became the youngest person ever elected to Austria’s parliament.

The border between politics and his personal life was again blurred when he married. He met his wife Christa, an artist and designer, while he was campaigning for her father, Kurt Waldheim, in his successful bid for the Austrian presidency in 1986.

The rapidity of Karas’s rise in politics might cast doubt on his claim that he abhors power-grabbing. But Karas’s experience and style lend credence to the idea that advancing his career has not been his main preoccupation.

The aggressive and personal nature of the attacks on Waldheim remains deeply imprinted on Karas’s memory. When Waldheim, a former UN secretary-general, campaigned for the Austrian presidency, the opposition began a campaign that brought to the fore his Nazi past and suggested he may have been implicated in war crimes. An independent commission later cleared him, though it concluded that Waldheim had been untruthful.

Four years later, Karas left frontline politics, moving into finance and insurance and then, in the mid-1990s, he returned to university to pick up two master’s degrees, in political science and law. When he did re-enter politics, it was in the European Parliament.

Fact File

Curriculum Vitae

1957: Born, Ybbs an der Donau
1976-79: President, student wing of the Austrian People’s Party (Union Höherer Schüler)
1981-90: President, youth wing of the Austrian People’s Party (Junge ÖVP)
1981-90: Vice-president, Young European Christian Democrats
1981-95: Employee of various banks and insurance companies
1983-90: Member of Austria’s parliament
1996: Master’s degree in political science, Vienna University
1997: Master’s degree in business law, University of St Gallen
1999-: Member of the European Parliament
2004-: Vice-president, European People’s Party group in the Parliament

Fellow MEPs depict a man who prefers the substance of politics over politicking and political gain, a preference reflected in his style. Karas “does not see denigration as a political instrument”, observes Swoboda, who collaborated closely with him to help the directive on services in the internal market pass through the Parliament in 2006. Rather, “he is an upright consensus-builder”, says Swoboda. Karas says he primarily wants to get things done. Very honest, trustworthy, respectful are other aspects of his style that fellow MEPs highlight.

The plaudits for his work, his European experience and his contacts were among the reasons why Karas was considered for the post of foreign minister. Karas, though, developed an interest in foreign affairs far earlier, partly because he hails from Lower Austria, a region that used to border the Iron Curtain. At 23, he became vice-president of the Young European Christian Democrats (as it then was), a post he held for nine years. He prides himself on having submitted the first motion in the Austrian parliament demanding the country’s entry to the EU. He felt that it was his generation’s duty to build a Europe without frontiers, just as his parents’ generation had rebuilt their country after the war.

In the European Parliament, Karas has become one of the centre-right’s most accomplished experts on financial regulation. As the rapporteur for the capital-requirements directive, he is now playing a crucial role in ushering through the Parliament implementation of capital requirements agreed – in the Basel III accords – by the governors of the world’s most powerful central banks. To mould the Parliament’s stance, he has written an own-initiative report on the directive; it was accepted without a dissenting vote by the economic and monetary affairs committee.

Industry representatives commend Karas’s knowledge of financial markets and his willingness to listen. But despite his contacts in Austrian finance, Karas does not shy away from imposing new rules on the industry. “He believes in a social market economy” says Sven Giegold, a German Green MEP. “He does not believe that markets can be left to themselves.”

That may be so, but he refused to join a cross-party group of MEPs when they signed a call for NGOs specialising in financial markets to counterbalance the financial lobby just as environmental NGOs counterbalance industry. Karas felt that the call was a sign of political weakness. Rather than complain about lobbyists, he seeks to shape financial regulation. He does so wherever he can: when he found out that the European Commission was about to set up a 42-member Group of Experts in Banking Issues this year, he applied to be an observer – the only MEP to do so.

Karas says he now feels much more at home in the European Parliament than in a national parliament, as the tone is less abrasive. “My political style is more suited to the European Parliament,” he admits.

It is a comment that suggests Karas could remain one of the most influential voices in Brussels and Strasbourg for many years to come. But if national politics does not tug him back, there is another tug. He spends his spare moments with his wife and ten-year-old son Gabriel in Vienna and, when away from home, makes a point of ringing his son every morning at 6.45am. “We get up together every day.” The way Karas instantly remembers the date he first met his wife suggests that politics is not the only thing that counts in his life.

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