Austria’s centre-right ÖVP, centre-left SPÖ, and liberal NEOS have reached an agreement to form a three-party coalition government after a second round of negotiations.
The parties announced the agreement early on Thursday, with the government programme set to be presented in parliament at 11 a.m. The coalition’s main priorities include a seven-year budget consolidation, significant tightening of asylum laws, and measures to improve conditions for tenants.
Pragmatism and Consensus as Key Principles
The coalition agreement, detailed in a 200-page document titled “Jetzt das Richtige tun. Für Österreich” (“Now Do the Right Thing. For Austria”), emphasises pragmatism and consensus as the foundation of the new government’s approach. The document, seen as a draft by APA, states that Austria’s progress has always been rooted in cooperation and confidence.
It also addresses the failed negotiations between the ÖVP and the far-right FPÖ, criticising those who “refuse cooperation and evade responsibility.” Instead, the coalition claims to be prioritising national interests over party politics, stating that governance is about “all of us, about Austria, about nine million people in our country.”
Stricter Asylum Policies and Social Reforms
The government’s programme outlines a series of stringent asylum measures. Notably, family reunifications for asylum seekers will be suspended with immediate effect, at least temporarily. Additionally, a headscarf ban for minors is being considered.
Beyond immigration policies, the coalition plans reforms in housing. The minimum duration for fixed-term rental agreements is set to increase to five years, aimed at providing more security for tenants.
Other policy measures include maintaining Austria’s military modernisation plans and continued participation in the European Sky Shield defence initiative. The state broadcaster ORF’s licence fee will remain unchanged until at least 2029. In the education sector, children in childcare facilities will receive free, healthy meals. Furthermore, women’s hygiene products and contraceptives will be exempt from VAT.
Budget Consolidation to Prevent EU Deficit Procedure
The coalition plans to consolidate Austria’s budget in line with EU fiscal regulations to avoid an excessive deficit procedure. Recognising current economic challenges, the government intends to balance the budget over the next seven years. The plan includes the swift adoption of a double budget and a new federal financial framework.
The government’s financial projections include a €6.3 billion package for 2025 and an €8.7 billion package for 2026. These measures are intended to stabilise Austria’s economy and address long-term fiscal sustainability.
Coalition Structure and Ministerial Appointments
The new Austrian government will be structured with the ÖVP and SPÖ each holding six ministries, while NEOS will take two. Additionally, seven state secretaries are expected to be appointed.
A key point of negotiation has been the finance ministry, which will be controlled by the SPÖ for the first time in 25 years. However, the party has yet to finalise its choice for the role. Vienna City Councillor Peter Hanke was initially considered a frontrunner, but internal discussions continue.
The ÖVP has largely settled its appointments. Christian Stocker is confirmed as chancellor, while key ministers from the previous government—Interior Minister Gerhard Karner, Defence Minister Klaudia Tanner, and Agriculture Minister Norbert Totschnig—are expected to remain in their positions.
For NEOS, Christoph Wiederkehr is expected to take over the education ministry, while party leader Beate Meinl-Reisinger is likely to be appointed foreign minister. NEOS MP Josef Schellhorn has confirmed he will become state secretary for deregulation.
Coalition Approval Process and Potential Inauguration
If the coalition agreement is approved by party committees, the new government could be sworn in as early as Monday.
The most significant challenge remains within the NEOS, where final approval depends on a membership assembly on Sunday. A two-thirds majority is required for the coalition deal to be ratified.
If the agreement is endorsed, Austria will see its first-ever three-party coalition between the ÖVP, SPÖ, and NEOS, marking a shift in the country’s political landscape.
Image source: FB Christian Stocker
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