Enjoy unlimited access: just £1 for 12 weeks

Subscribe now

In an exclusive interview with the Antiques Trade Gazette on March 2, Ressler suggested that Austria's current political situation recalled the appointment of Kurt Waldheim as state chancellor in 1986. “That year American collectors didn't bid. I'm sure they will not bid this year.” He fears that sales of modern art, and especially Jugendstil, will be hit this year. “Many of my (American) customers are Jewish, people who came from Europe. Feelings are running very high.” He believes reaction will be less emphatic from European buyers as “their attitude is different”.

Such is Ressler's hostility to the new Austrian government that Wiener Kunst took the extraordinary step of organising an auction to finance the massive anti-Haider demonstration in Vienna on February 19. The sale, organised on February 17 (at short notice and without a catalogue), comprised 97 works donated by contemporary Austrian artists. The hammer total of Asch1.24m (£55,000) was exclusively used, says Ressler, to finance policing and a sound-system for the political rally two days later, attended by over 200,000 people.

Although Ressler admits that some of the firm's clients “don't understand” his political stance, he is no mood to compromise, stating bluntly: “The government is a problem. We hope it will fall soon. There will be economic problems if it stays.”

Reaction to the new government is more circumspect across town at Austria's leading auction firm, the Dorotheum. Managing director Alfred Karny says it is “too early to tell” if auction activity will suffer from the new political situation, reserving judgment until the major Spring sales of late March. He stresses that “the Dorotheum is totally unpolitical, even though we belong to the State”.

Not for much longer: although no date has been set, the privatisation of Dorotheum is imminent. The transaction will be handled by Österreichische Industrie Holding (ÖIAG), the State-appointed holding company overseeing Austria's privatisation programme. Although Karny feels Dorotheum is not the ÖIAG's immediate priority, he calls the holding company “a very good partner, who knows our business” and will “want a good price”. He says the sale could go through “maybe this year” but reports that the “official procedure is not yet underway”. Contrary to initial indications, the State will retain no stake in Dorotheum after privatisation.

Karny refuses to comment on rumours that Phillips' owner Bernard Arnault may be interested in buying Dorotheum, but dismisses the prospect of Phillips' joining Etude Tajan, acquired by Arnault last month, as part of the I.A. (International Auctioneers) grouping, of which Dorotheum are founder members. “I'm sure Phillips won't come in. Many of our members wouldn't accept that. We're all regionally based. We don't know Phillips' strategy, but they'll probably want to be present throughout Europe.”

Karny also reveals that Jacques Tajan had assured fellow I.A. members that he would retain his independence for at least the next three years. “It's important he stays,” adds Karny. “The French market is becoming very important for all Europe, perhaps even more so than the UK.”

• Wiener Kunst moved last summer from the Ringstrasse to the first floor of the Palais Kinsky in the heart of Vienna. The Palais, designed by Johann Lucas von Hildebrandt in 1713, is a classic example of exuberant Viennese Baroque and, with its parquet floors, stuccoed ceilings and crystal chandeliers, provides one of the world's most opulent auction venues. Ressler says he “searched for a very long time” before finding his new base, and had to overcome “a number of problems regarding security, structural alterations and planning permission” before completing the move, which he hopes will lead to “more and bigger auctions”. Wiener Kunst's floor space has doubled from 700 sq m to 1400 sq m and the increased room height (now 16ft) will be a “boost for furniture sales”.

The Dorotheum recorded turnover of ASch1.47bn (£65m) in 1999. Under one-third of that figure – ASch470m (£21m) – came from auction sales. Pawnbroking yielded ASch350m (£15.6m), while ASch640m (£28.4m) came from retail sales, the firm's “most profitable” sector of activity and major contributor to annual profits of ASch30m (£1.3m). “We can be more profitable,” insists Alfred Karny, who aims for profits of ASch50m (£2.2m) in 2000.