Austrian Chancellor Karl Nehammer has announced that he will resign soon after coalition talks failed for the second time. Negotiations between the People’s Party and the Social Democrats ended following a surprise withdrawal by the liberal Neos party.
Breakdown of negotiations
Nehammer, from the conservative People’s Party, shared the news on social media. He stated, “Unfortunately, I must inform you that the negotiations have ended and will not continue.” He added that “destructive forces” within the Social Democrats had taken charge. As a result, his party could not agree to a programme that would harm economic competitiveness.
Andreas Babler, leader of the Social Democrats, expressed his disappointment. He said, “This is not a good decision for our country.” According to Babler, the main issue during discussions was how to manage the large deficit left by the previous government.
Additionally, Babler offered to continue talks and urged Nehammer not to abandon the process.
Financial challenges for the next government
The incoming government will face tough financial decisions. The EU Commission estimates that Austria must save between 18 and 24 billion euros. The country has been in a recession for two years, and unemployment is rising. Its budget deficit is currently 3.7 percent of GDP, which exceeds the EU’s 3 percent limit.
Since October, Chancellor Nehammer has been tasked with forming a new government. However, all other parties refused to cooperate with the far-right Freedom Party, which won 29.2 percent of the vote in the September elections.
