Götterdämmerung

Coalition talks between the ÖVP, SPÖ, and NEOS collapsed at the start of January, handing the far-right FPÖ a path to power

Photo by Jacek Dylag on Unsplash

Servus!

Shortly before the Christmas break, following conversations that dragged on for nine hours, the conservative People’s Party (ÖVP), Social Democratic Party (SPÖ), and liberal NEOS agreed that Austria’s forthcoming budget consolidation would take place over the course of the next seven years. A major hurdle in the way of the three parties forming a government had therefore been overcome, and the parties reported they would now get to work on a two-year budget that would cover both 2025 and 2026. With that, thoughts turned to the holiday season with the expectation that the three parties would finalize a coalition agreement by the end of January. Austria’s tabloid press was excitedly publishing lists of future government ministers.

New year, new crisis. At a hastily arranged press conference at 10:30 on Friday, NEOS leader Beate Meinl-Reisinger announced her party was bailing on negotiations with the ÖVP and SPÖ. In a 30 minute speech that could have been an email, Meinl-Reisinger declared (with the chutzpah of someone whose party had won more than the 9.1 percent of the vote it had actually achieved in September’s election) that it was simply impossible to “achieve a breakthrough” with either party; neither the ÖVP nor the SPÖ amenable to the kind of fundamental, long-term reforms the NEOS champion including the de-politicization of state institutions.

The clash of ideas between the ÖVP, SPÖ, and NEOS came down to how best to consolidate Austria’s budget as to bring the country’s budget deficit back down below 3% of GDP as mandated by the European Union’s Maastricht criteria. The NEOS wanted to gradually raise the retirement age in Austria to 67, a move to which the SPÖ was opposed. The SPÖ was also against the NEOS’s idea of introducing a debt limit, a measure that has severely limited the German government’s room for maneuver as it attempts to resolve its own economic difficulties. The NEOS, for their part, were opposed to the SPÖ’s proposals for new taxes, in particular wealth and inheritance taxes.

With the NEOS out of the picture, President Alexander Van der Bellen pressured the ÖVP and SPÖ to continue negotiations—this time with a view to resurrecting the old grand coalition. The parties’ leaders, Karl Nehammer and Andreas Babler, were, it seems, game to give it a go, and the ÖVP and SPÖ continued talks on Saturday. Alternative forces in the ÖVP, however, weren’t so keen. The SPÖ had the impression, Christian Nusser wrote for Newsflix, that “ÖVP representatives of industry and business”—from the party’s powerful Business Association as well as the Chamber of Commerce and the Confederation of Austrian Industry—“were not negotiating seriously; they wanted to blow up the talks.”

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This chapter in the history of these negotiations was, in the end, more of a footnote, lasting a little over 24 hours. Shortly after 19:00 on Saturday, the APA reported that the ÖVP had unilaterally ended talks with the SPÖ. Cutting into the evening news at the bottom of the hour, Babler reported that the SPÖ were, until the end, “prepared to make compromises because negotiations cannot be a one-way street. Karl Nehammer understood this, and I would like to thank him expressly. The forces that ultimately prevailed,” he said ominously, “didn't want that.”

Per the SPÖ’s account, the party simply could not agree to the kinds of cuts to the budget the ÖVP wanted to make: salary freezes for police officers, care workers, and teachers for two years; pension freezes lasting three years and an increase in the retirement age to 67; and swingeing cuts to the healthcare budget totaling some 20 percent. Nehammer, for his part, might say that recollections may vary. Nusser, meanwhile, reported that the final break in ÖVP-SPÖ negotiations came when the SPÖ proposed implementing a levy on banks’ profits, a measure economic interests in the ÖVP simply could not countenance. Thus, the ÖVP simply walked away.

With his career and political project in utter ruins, Nehammer had no choice but to resign as chancellor and ÖVP leader. The following morning, Sunday, party grandees hastily convened in Vienna to nominate his successor. Entreaties to former chancellor and ÖVP leader Sebastian Kurz having reportedly failed because of his insistence on calling fresh elections right away, the party went safety first and picked as its interim leader party secretary Christian Stocker. The man who had so vehemently opposed making far-right Freedom Party (FPÖ) leader Herbert Kickl chancellor then had to explain to the country that the ÖVP would now try and form a government with Kickl after all. Grim-faced, Stocker and his ÖVP heavies looked like funeral directors who had come to bury the republic.

In resigning, Nehammer returned his mandate to try and form a government to Van der Bellen, a gift the president then bestowed on Kickl on Monday, albeit reluctantly. On Tuesday, Kickl invited the ÖVP to partake in coalition negotiations. If events in Lower Austria in early 2023 and Styria at the end of 2024 are anything to go by, negotiations between the ÖVP and FPÖ are likely to be swift, the result brutal. On Sunday, Salzburg governor Wilfried Haslauer said of the ÖVP that "we will not sell our souls" in forming a government with the FPÖ. That deed, unfortunately, was signed a long time ago.

Bis bald!