Austria heads for 3-party coalition government

GENEVA

Three Austrian parties have successfully negotiated to form the next government that will exclude the far-right Freedom Party of Austria (FPO), which won the September 29 parliamentary elections.

After several rounds of talks, the Austrian People's Party (OVP), Social Democratic Party of Austria (SPO), and liberal Neos party had a successful first round of negotiations, Austrian Chancellor Karl Nehammer of the OVP announced at a press conference on Monday evening in Vienna.

“I can inform you today that we have completed the exploratory phase and are formally entering into government negotiations with the SPO and Neos,” Nehammer said.

“We are now entering into in-depth government negotiations that touch on many detailed areas. The outcome of these negotiations is still open,” he added.

This would be Austria's first three-party coalition government, also known as the "Candy Coalition," because their names match the colors of their flags: turquoise (OVP), red (SPO), and pink (Neos).

The far-right FPO won the parliamentary elections with 29% of the vote, but none of the three parties were willing to form a coalition with it. Therefore, President Alexander Van der Bellen gave the mandate to the runner-up, Chancellor Nehammer of the center-right OVP, to form a government.

After his press conference, Nehammer told public broadcaster ORF that "it is important to form a government of stability and reason from the center."

“The next government program must be characterized by having a spending brake as the top premise,” the Austrian chancellor continued.

It is now important to “take a close look at spending and use funds efficiently,” he said, referring to the ongoing economic crisis in Austria.

According to Republic of Austria and Statistik Austria data, the country's economy contracted in the first half of the year, contrary to economists' expectations.

The Austrian Institute of Economic Research (Wifo) and the Institute for Advanced Studies (IHS) now expect economic output to fall again in 2024. This would imply that Austria's economic output would contract for the second year in a row, the first time since 1950.