On 27 February, the conservative People’s Party (ÖVP) Executive Federal Party Chairman and likely future chancellor, Christian Stocker, announced a deal to form a coalition government with the Social Democrats (SPÖ) and the liberal Neos party. However, the liberals still need to hold an inter-party vote on Sunday. It will be Austria’s first three-way governing coalition since it became independent in 1955.
A big win in this deal is that the pro-Kremlin, far-right Austrian Freedom Party (FPÖ), which many view as a security threat, won’t be part of the new government. This coalition is considered a solid option for keeping the country stable, primarily since the alternative could have meant a snap election. Yet, polls show that the far-right party is still gaining traction with voters.
The three parties shared a chunky 200-page government programme, which aims to reduce the budget deficit to within the EU limit of 3% of economic output and keep Brussels out of the country’s business. The plan includes ideas from the centre-right, liberal, and centre-left groups, such as raising taxes on banks and energy companies, cutting spending, and tightening immigration rules.
Some of the main proposals include increasing taxes on banks, extending taxes on companies making big profits from fossil fuels, and scrapping environmental perks like the tax break for solar panels. They’re also looking at trimming spending through pension reforms and stopping family reunification visas for the immediate relatives of refugees.
Previous attempts for a coalition
On 23 October 2024, Austria’s President Alexander Van der Bellen asked Chancellor Karl Nehammer to create a new government. The plan was to create a stable government and avoid partnerships with the far-right FPÖ, which got 29% of the vote. To have a majority in the 183-seat National Council, you need 92 seats, but other parties have ruled out teaming up with the FPÖ.
Chancellor Nehammer started talks with the Social Democrats (SPÖ) – the two parties securing 92 seats. This meant they needed a third party to have a more secure majority, so Nehammer invited the liberal NEOS party, which scored 9.1% and won 18 seats, to join the discussions.
On 12 November, at a news conference with SPÖ leader Andreas Babler, Nehammer shared that NEOS was on board with the coalition talks. By 18 November, the discussions among the Conservatives, Social Democrats, and Liberals wrapped up, and they started talking about minister positions.
Eventually, NEOS disagreed with the coalition’s economic plans and backed out. This led the ÖVP and FPÖ to try negotiating, but the FPÖ presented a programme that could threaten Austria’s democracy and security. So, that effort fell apart, too.
Efforts for a stable government
While the three parties have yet to name ministers, Christian Stocker posted some names on his X account. The People’s Party will take responsibility for a total of 6 ministries. In addition, the party will nominate three state secretaries to support the government team. Stocker’s ÖVP secures the defence and interior ministries. The SPÖ would control the finance ministry, long an ÖVP preserve, for the first time in 25 years, as well as the justice ministry. The Neos would run education and the foreign ministry.
Gerhard Karner will remain Interior Minister, while former Secretary General Alexander Proell will accompany the Chancellor to the Federal Chancellery and will be responsible as State Secretary for digitalisation, the constitution, the public service, the fight against antisemitism and government coordination. Claudia Plakolm will be Minister of the Federal Chancellery and responsible for the EU, integration, and family.
In the SPÖ-led Ministry of Finance, Barbara Eibinger-Miedl will serve as State Secretary. Norbert Totschnig will remain as Minister of Agriculture and will additionally take on the environmental and climate agendas.
The national defence, including the Federal Army, will stay in Klaudia Tanner‘s hands. Stocker wrote that as the first woman at the head of the Defence Ministry, she has proven in recent years that she tackles challenges decisively and positions the Federal Army well for the future, especially in times of geopolitical uncertainties. Wolfgang Hattmannsdorfer will be the state secretary of the Ministry of Economic Affairs in energy and tourism.
“Yes, we can all be glad that we have been spared a right-wing extremist chancellor. But we have not only prevented worse outcomes. Today, we can record social democratic successes that will make our country better and more socially just,” SPÖ Federal Party Chairman Andi Babler posted on X.
“As promised: Thanks to the SPÖ, we are restructuring the budget socially justly. Banks, energy companies, real estate firms, and private foundations are contributing their fair share to the budget restructuring. The bank levy alone will bring us 500 million € each in the next two years,” added the Socialdemocratic leader.
“After long nights of negotiations, it’s finally done: Our work programme! I am optimistic that our members will approve this work program on Sunday. Then we can jointly implement the necessary reforms for Austria,” the Federal chairwoman of NEOS and club chairwoman in the Austrian National Council, Beate Meinl-Reisinger, declared.
The three-party government is expected to take office on Monday, as Stocker said. FPÖ’s leader, Herbert Kickl, once again described the coalition as a “coalition of losers” and called for a snap election.
