Austria: Government formation debacle

We hereby publish an unofficial translation of an article by Rote Fahne, Austria:

Government formation debacle shows the hypocrisy of election campaigns and the basic principles of an upcoming austerity government

The domestic political events of the last few days are an expression of the political crisis and instability in which those in power in Austria find themselves. While bourgeois political analysts have already spoken of an “impending state crisis”, this only shows how serious the representatives of capital are with their plans for an austerity government against the interests of the population. This has been made abundantly clear in recent days: Election campaigns and their numerous promises have nothing to do with so-called “real-policies” – but are primarily played out as a spectacle for the voters. The upheavals in the political party landscape in Austria will now most likely also be cemented in government constellations.

”Sugar-coalition” collapsed: New colors for future austerity government

The election campaign for the National Council elections at the end of September 2024 was launched with the goal and promise of “stability”. The Rote Fahne stated: “Within these conditions, the rulers in Austria are trying to stabilize the political and economic development as much as possible with the upcoming National Council elections: this means a situation that is as stable as possible in order to be able to continue to pursue the course of EU armament, NATO integration and the dismantling of democracy and social welfare. The ÖVP, SPÖ, Greens and NEOS are mainly showing themselves to be willing defenders of this course (…).”(1) Knowing full well that the ÖVP [Translator’s note: Austrian Party of the People], as the FPÖ’s [Translator’s note: Freedom Party of Austria] junior partner, would continue on its course of decline, Nehammer tried to form a government with the SPÖ [Translator’s note: Social-democratic Party of Austria] and NEOS [Translator’s note: Party New Austria and Liberal Forum]. It is not true that the Federation of Austrian Industries was against such a government from the outset, as some are now claiming, because the Federation wants to see its plans implemented above all and the SPÖ was prepared to drop its most central election campaign demands in favor of government participation anyway. In this respect, it is also significant that the NEOS were the first to pull out of the negotiations and not the SPÖ – the latter obviously wanted to be part of the future government of cuts against the people. At the end of December 2024, the President of the industrial bosses, Georg Knill said that overall he didn’t care about “color games”, “as long as it is recognized that there is fire under the roof” and that this means that “courageous, not always popular measures” are now needed.(2) We already outlined the direction these “unpopular measures” should take in our December issue of Rote Fahne with regard to industry and the working class: “Deindustrialization of Austria?”. Now the FPÖ is making its move and with it, most likely, an EU deficit procedure.

New FPÖ-ÖVP coalition starts with EU deficit proceedings?

In the course of ORF’s [Translator’s note: Austrian public broadcaster] reporting over the last few days, there has been little talk about the actual reasons for the failure of the “Sugar” coalition in hour-long special broadcasts, but one thing has been sufficiently emphasized: “it’s about the money” and what would be threatened by an EU deficit procedure. If you look at the numerous EU deficit procedures over the last few decades (Austria already had one that started in 2009), it is clear that they are not always as hotly served as they are cooked – especially when it comes to the leading countries in the EU, such as Germany. At the end of 2024, excessive deficit procedures were initiated against six EU countries, including France. At the same time, it is a certain instrument to keep the respective member states “on track” and, if necessary, to enforce measures in the interests of the hegemonic forces in the EU. The fact that the “spectre” of the deficit procedure has been drummed up particularly strongly in recent days is an indication that the formation of the new government is also taking place under certain premises – and is therefore primarily aimed at the FPÖ leaders. The President of the Fiscal Council, Christoph Badelt, said in a ZIB [Translator’s note: ORF’s news program] Special that “it will have to be a restructuring coalition”. On ZIB on January 5, he also said: “In the first year alone, six billion euros would have to be saved if we want to avoid the deficit procedure (…) and that’s pretty brutal.” With regard to election campaign promises, he said: “I think you have to be fair: If you only judge the parties by what they said before the elections, then they could never put together any kind of budget. The Freedomly Party is no different and, of course, from their opposition role they have either made irrelevant demands or demands that go in the opposite direction.” In plain language, this means that if the new government does not agree on proper austerity plans in the service of capital in the next two weeks, then the EU Commission will come and show the right way forward: “By the way: because the old partners [note: ÖVP-SPÖ-NEOS] have agreed on the seven years, I find that a bit funny, because they can’t agree on anything, because they can only agree on the seven years with the European Commission. And if they do that and if the Commission agrees, then that means that they also have to decide on binding reform measures outside of the budget restructuring, the implementation of which the European Commission monitors, and nobody has talked about that yet”(3), according to Badelt.

Although there has not yet been a day of negotiations between the FPÖ and ÖVP, it has already been made relatively clear in which direction a new federal government must go. The population, and in particular the workers, toilers and small self-employed, will continue to face high prices, harsh cuts and attacks – and those initiatives and associations that are already defending the democratic rights of the people and opposing imperialist armament and social cuts must be strengthened and supported!

(1) Die Rote Fahne, No. 31, “Are the elections a perspective? Plea for an active election boycott.”

(2) diepresse.com; “IV-President Knill: EU deficit procedure would be tantamount to self-abandonment”

(3) ZIB2 January 5, 2025; Christoph Badelt, President of the Fiscal Council