Economic news

Austrian liberals quit coalition talks, throw process in turmoil

2025.01.03 08:02

By Francois Murphy

VIENNA (Reuters) – A small liberal party on Friday unexpectedly quit coalition talks on forming a new Austrian government, throwing into disarray negotiations that had sidelined the far-right Freedom Party (FPO) even though it won September’s national election.

The shock move by the Neos party raises serious doubts about the process of forming the next government, and buoyed the eurosceptic, Russia-friendly FPO, which has been waiting in the wings since being shut out of the coalition talks.

Opinion polls show FPO support has grown since it secured roughly 29% of the vote in the Sept. 29 election. It has slammed the talks between the second, third and fourth-placed parties as an undemocratic attempt to create a “coalition of losers”.

“We, Neos, will not continue negotiations on a possible three-party coalition,” its leader, Beate Meinl-Reisinger, told a hastily convened news conference in which she accused her interlocutors of lacking the courage to take tough decisions.

She said the talks with Chancellor Karl Nehammer’s conservative People’s Party (OVP) and the Social Democrats (SPO) had not made enough progress to be worth pursuing. Neos has pressed for lower taxes and structural reforms, including unpopular ideas like raising the retirement age.

The rise of the far right has made it harder to form stable governments in several countries, including Germany and France. Austria has not had a three-party government since 1949.

FRAGILE TWO-PARTY GOVERNMENT?

Meinl-Reisinger said her party was still prepared to throw its support in parliament behind measures already agreed on in the coalition talks, hinting at the possibility that the SPO and OVP could form what would be a fragile two-way coalition.

Together the two parties have a one-seat majority in the lower house. Without some extra backing, the tiny margin is widely seen as impractical because a single lawmaker’s absence could tip the balance.

“We’re not saying no to responsibility for Austria. We’re not saying no to reforms. We’re not saying no to the compromises that have already been reached,” said Meinl-Reisinger.

Spokespeople for the OVP and SPO were not immediately available for comment on how the talks might now proceed.

While some in the OVP support working with the FPO, Nehammer has ruled out governing with FPO leader Herbert Kickl, who in turn insists he should lead any government involving his party.

The only other party in parliament which could join the coalition talks is the Greens, Nehammer’s current coalition partner, but the two parties have had a fraught relationship.

A snap election is possible but is not in the interests of the OVP or SPO as polls suggest they would fare worse than before, with the FPO now leading both by more than 10 percentage points.

© Reuters. FILE PHOTO: Head of NEOS party Beate Meinl-Reisinger speaks with journalists after coalition talks in Vienna, Austria, December 20, 2024. REUTERS/Elisabeth Mandl/File Photo

The FPO wasted no time in attacking Nehammer and comparing his talks with the so-called “traffic-light coalition” in neighbouring Germany that recently collapsed.

“The FPO has been warning for months about this political monstrosity of the loser-traffic-light coalition based on the German model,” the FPO said on X. “People have had enough! It’s time for you to resign, Mr Nehammer.”



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