Austria: Chancellor to resign after coalition talks collapse
January 4, 2025
Austrian Chancellor Karl Nehammer has announced he will resign in the coming days after coalition talks between his Austrian People's Party (ÖVP) and the Social Democrats (SPÖ) collapsed.
"I will stand down as chancellor and as leader of the People's Party in the coming days and enable an orderly transition," Nehammer said in a video statement on social media.
The conservative ÖVP and center-left SPÖ had been engaged in negotiations aimed at forming a coalition government without the far-right Freedom Party (FPÖ).
The liberal NEOS party had already withdrawn from talks on Friday.
"We have negotiated long and hard [but] an agreement with the SPÖ on key points is not possible," said Nehammer, who became chancellor in December 2021.
"The People's Party is sticking to its promises: We will not agree to economically damaging, anti-growth policies or new taxes," he insisted, accusing the Social Democrats of being too radical.
"It is evident that the destructive forces within the SPÖ have gained the upper hand," he claimed. "It is my deep conviction that radicals do not offer a solution to a single problem. Therefore we shall not be continuing negotiations with the SPÖ."
SPÖ boss Adreas Babler accused the ÖVP of playing tactical political games.
"We know what threatens to happen now," Babler said. "An FPÖ-ÖVP government with a right-wing extremist chancellor that will endanger our democracy on many points."
Austria: What happens next?
The far-right FPÖ, a party of pro-Russian euroskeptics, emerged from parliamentary elections in September as the largest party with 29% of the vote. But it has been unable to form a government since no other parties would enter a coalition with them.
Following Nehammer's resignation, however, the neoliberal pro-business wing of the ÖVP may consider a coalition with the FPÖ. But much will depend on who the party elects as its new leader.
New elections are another possibility, but the FPÖ could extend its lead even further after the breakdown of what the far-right party dubbed a "coalition of losers."
Whichever party leads the next Austrian government, it will face several challenges, including an economy in recession, rising unemployment and a budget deficit of 3.7% of GDP — above the European Union's limit of 3%.
The European Commission has said Vienna must save between €18 billion to €24 billion ($18.56 billion to $24.75 billion).
mf/sms (dpa, AP, Reuters)