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AUSTRIA: Pres. Holds Talks w/Moderate Party Leaders After Coalition Talks Fail

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President Alexander van der Bellen has been holding meetings with the leaders of the conservative Austrian People's Party (ÖVP) and the centre-left Social Democrats (SPÖ)  following the collapse of coalition talks involving the two parties and the liberal NEOS earlier today (see 'AUSTRIA: Liberal NEOS Leave Coalition Talks Saying 'No Progress Possible" 1006GMT). 

  • The four options on the table now appear to be:
    1. ÖVP-SPÖ coalition: two-party gov't would be simpler than tripartite agreement, but one-seat majority would risk individual lawmakers derailing policy.
    2. ÖVP-SPÖ-Green coalition: initially the ÖVP and SPÖ opted to work w/NEOS rather than environmentalist Greens. Green leader Werner Kogler has demanded answers on why they were left out of initial talks, and why negotiations w/NEOS collapsed. Greens and SPÖ are close, but ÖVP-Green links strained after 5 years in gov't.
    3. FPÖ-ÖVP coalition: Previously ÖVP refused to work with the largest party in parliament, the far-right Freedom Party (FPÖ) under leader Herbert Kickl. In order for this gov't to work it would need either Kickl or ÖVP chair, Chancellor Karl Nehammer, to be replaced.  
    4. New elections: If absolutely no majority gov't is possible, the process to start new elections could get underway. This would prolong political paralysis, with a caretaker gov't remaining in place. Opinion polling also shows the FPÖ to make gains at the next election even compared to its record-breaking seat total in 2024. 

Chart 1. Federal Election Opinion Polling, % and 2-Poll Moving Average

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President Alexander van der Bellen has been holding meetings with the leaders of the conservative Austrian People's Party (ÖVP) and the centre-left Social Democrats (SPÖ)  following the collapse of coalition talks involving the two parties and the liberal NEOS earlier today (see 'AUSTRIA: Liberal NEOS Leave Coalition Talks Saying 'No Progress Possible" 1006GMT). 

  • The four options on the table now appear to be:
    1. ÖVP-SPÖ coalition: two-party gov't would be simpler than tripartite agreement, but one-seat majority would risk individual lawmakers derailing policy.
    2. ÖVP-SPÖ-Green coalition: initially the ÖVP and SPÖ opted to work w/NEOS rather than environmentalist Greens. Green leader Werner Kogler has demanded answers on why they were left out of initial talks, and why negotiations w/NEOS collapsed. Greens and SPÖ are close, but ÖVP-Green links strained after 5 years in gov't.
    3. FPÖ-ÖVP coalition: Previously ÖVP refused to work with the largest party in parliament, the far-right Freedom Party (FPÖ) under leader Herbert Kickl. In order for this gov't to work it would need either Kickl or ÖVP chair, Chancellor Karl Nehammer, to be replaced.  
    4. New elections: If absolutely no majority gov't is possible, the process to start new elections could get underway. This would prolong political paralysis, with a caretaker gov't remaining in place. Opinion polling also shows the FPÖ to make gains at the next election even compared to its record-breaking seat total in 2024. 

Chart 1. Federal Election Opinion Polling, % and 2-Poll Moving Average

Keep reading...Show less