The leader of the far-right Freedom party (FPOe) Herbert Kickl leaves after talks with Austria’s … [+] President on January 6, 2025 at the presidential Hofburg Palace in Vienna, Austria. Austria’s conservatives of the People’s Party (OeVP) said on January 5, 2025 they were ready to start negotiations with the far-right Freedom party (FPOe) to form a new government, a policy U-turn after coalition talks with two centrist parties failed. (Photo by Joe Klamar / AFP) (Photo by JOE KLAMAR/AFP via Getty Images)
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Austrian politics has taken a turn, potentially to the far-right, that could usher the far-right Freedom Party (FPO) (with unashamed pro-Russia tendencies) into the seat of power of a developed European country. It would be the first time since the Second World War that such a party has been in government in Austria.
The lack of progress of coalition talks to form a government following the general election at the end of last September (the far-right FPO got 29% with the centre right OVP on much the same) and the resignation recently of Karl Nehammer as leader of the OVP have opened up the political stage to the FPO’s role in government with the OVP (as per the current OVP chief Christian Stocker).
The FPO’s leader, the highly controversial Herbert Kickl has now been tasked by the president with forming a government – very likely with the OVP with whom the FPO shares views on immigration and fiscal policy.
Kickl would be a controversial chancellor – when he was interior minister under Sebastian Kurz he had police raid the Austrian secret service (who will be far less trusted by neighbours). He is well known for having made a series of controversial statements, and this might make a government that he leads very hard to operate. In addition, this might ultimately be too much for some members of the pro-EU OVP, and we cant rule out that the other parties in the centre are now catalysed to form a coalition.
If the coalition talks between the OVP and FPO fail, an election is the next likely step (and the FPO currently poll at 36% (from 29%) while the OVP are down to 21% (from 28%). As such, there appears to be popular support for the FPO to form a government.
This development warrants attention for four reasons. Austria could become the first developed, ‘quiet’ European with a controversial far-right party at the centre of government. Second, the FPO could launch controversial policies such as mass deportation. Thirdly, there is a risk that they coordinate with other pro-Russia/far-right governments (notably Hungary and Slovakia) to undermine the EU and set a more controversial tone. Finally, Austria might become a portal for Russian interference in Europe.
Large EU nations and the EC will regard this as a retrograde development. Austria will likely not face fines in the manner of Hungary, but security cooperation will diminish. There is no sign of any spillover to Germany where we continue to expect that Fredrich Merz will be the next chancellor (CDU polling at 30%, SDP at 17% and AfD at 19%).
From a business point of view this development is not welcome. Austria has a high budget deficit and could be targeted by the EU for this. A Kickl led government makes such a confrontation more likely. In addition, foreign investors in countries like Germany, Switzerland and other European countries may hold off investing in Austria given the uncertainty that an FPO led coalition government might generate.
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Publish date : 2025-01-09 09:36:00
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