Austria: Centrist parties form coalition without far right

Austria's center-right People's Party (ÖVP), center-left Social Democrats (SPÖ) and the centrist Neos party agreed to form a government on Thursday, party leaders announced.

"Behind us lies perhaps the most difficult coalition negotiations in our country's history," said ÖVP chief Christian Stocke, standing next to the SPÖ's Andreas Babler and Neos' Beate Meinl-Reisinger. The trio said they understood the "impatience" after Austria's longest period without a government since World War II.

Stocke added however that they were "happy and proud" to present their government's program, saying that "compromise is a great Austrian virtue."

It will be the country's first three-party coalition since the 1940s, and will take office next week provided all three parties sign off on the deal by that time.

There is some concern that members of Neos, the most junior coalition member with only 9% of the vote, might not be that enthused about the deal. Two-thirds of party lawmakers must agree to deal at a summit on Sunday.

The coalition deal sidelines the far-right Freedom Party (FPÖ), who with 28.8% of the vote were the strongest party in September's election. The FPÖ tried to form a government, but coalition talks collapsed earlier this month.

Rent and immigration controls

At their joint press conference, the party leaders presented a raft of policy proposals pulled from both sides of Austrian politics. While they announced measures to alleviate the crush of inflation on consumers, including a moratorium on raising rents, they also said they would create stricter new immigration laws such as tightening restrictions on family unification.

Immigration to Austria should require "integrating into society from day 1," they said.

They also promised to impose a ban on girls younger than 14 wearing hijab. 

Far right decries 'coalition of losers'

FPÖ leader Herbert Kickl called it a "coalition of losers" and called for a snap election. His Russia-friendly, anti-immigration party won 29% of the vote in September but could not make a coalition deal work with the ÖVP.

Austrian political analysts noted that the possible three-way coalition faces several major hurdles on top of a struggling economy. The ÖVP, SPÖ, and Neos already tried to form a coalition once in the fall and failed. Their policy differences represent a major challenge to forming a cohesive government.

It was also clear ahead of the negotiations that the one of the few wishes tying the three together was not having Kickl as chancellor of Austria, which observers noted is not something that could hold them together long-term.

Their biggest issue by far, however, is the budget, as Vienna inches closer to running afoul of European Union regulations about running an excess deficit. To that end, the new coalition announced a raft of measures included new taxes on the nation's biggest banks.

Edited by: Kieran Burke