This past weekend’s Austrian parliamentary elections, which saw the right-wing Freedom Party of Austria (FPÖ) gain the most votes (29.2%), is likely to lead to difficult discussions over the formation of a new government, which comes at a “particularly bad time” for the country, according to ING.
ING Germany economist Franziska Biehl was commenting in the wake of the 29 September elections, which saw some five million people go to the polls.
Voter turnout stood at 78.5%, up from 75.6% in 2019, with the current coalition government experiencing the biggest losses – the Austrian People’s Party (ÖVP) saw support from from 37.5% in 2019 to 26.5% today, while the Greens saw their share of votes decrease from 13% five years ago to 7.4%.
‘Not on the cards’
“While it is still unclear what the new Austrian government will look like, one thing is for sure: a continuation of the current coalition between the ÖVP and the Greens is not on the cards,” Biehl commented.
“The two parties currently hold a combined total of only 67 seats. To form a governing majority, 92 seats are required. This would only be possible in a two-party coalition if the ÖVP and FPÖ were to reunite. Alternatively, the ÖVP and the Social Democratic Party of Austria (SPÖ) could also achieve the necessary majority together, but with just 93 seats, it would be a very fragile coalition.”
A three-party coalition is also a possibility, with the ÖVP and FPÖ potentially teaming up with the Greens or liberal Neos party, however both eventualities would likely involve “prolonged negotiations and numerous compromises”, according to Biehl.
As for the FPÖ, as well as being an anti-immigration party, its main economic policies include tax cuts and a reduction in non-wage labour costs, however financing such plans would also require some outside-the-box thinking by any coalition government.
‘Political uncertainty’
“In any case, the formation of a new government will not be an easy task, fraught with the potential for political uncertainty and deadlock, both during coalition negotiations and in governance,” commented Biehl.
“Given Austria’s current need for targeted measures to address structural challenges and improve competitiveness, this situation arises at a particularly bad time.”
