Liberals' exit from Austria coalition talks opens door to far right

The smallest of three parties in talks to form Austria's next government have unexpectedly quit those negotiations, throwing into disarray an effort to form a centrist ruling coalition without the far-right Freedom Party (FPO).

The shock move by the liberal Neos party raised serious doubts about the future of the coalition talks and buoyed the eurosceptic, Russia-friendly FPO. The FPO has railed against those negotiations since it was shut out despite winning the last parliamentary election in September with 29 percent of the vote.

Although the FPO would have needed a coalition partner to govern and none was forthcoming, opinion polls show its support has only grown since it was sidelined. That increases the pressure to find a solution for the two parties left in the talks - conservative Chancellor Karl Nehammer's People's Party (OVP) and the center-left Social Democrats (SPO).

"We Neos will not continue negotiations on a possible three-party coalition," their leader Beate Meinl-Reisinger told a press conference, accusing the other parties of lacking the courage to take bold decisions, including in their last meeting that ran into Thursday night.

The Neos back tax cuts and structural reforms, including unpopular ideas like raising the retirement age. Having never been in national government, they present themselves as modernizers in contrast to the SPO and OVP, traditional parties of power.

The withdrawal underscored the growing difficulty of forming stable governments in European countries, such as Germany and France, where the far right has been on the rise but many parties are loath to partner with them.

There are no easy paths left in Austria.

"Those involved have the choice between Scylla and Charybdis," political analyst Thomas Hofer said, referring to two sea monsters from Greek mythology who threatened sailors. "They now have to choose between very, very bad options."

Together the SPO and OVP have a majority of just one seat in parliament, widely seen as impractically thin.

Whether the two could reach an agreement is unclear given their differences on issues including taxation. The OVP has pledged not to raise taxes while the SPO's flagship policy is to tax wealth and inheritance, which the OVP rejects.

President demands clarity

For hours the OVP's only reaction was a statement by Secretary-General Christian Stocker blaming "backward-looking forces in the SPO" that he said had recently "gained the upper hand" in the talks and prompted the Neos to quit. Senior SPO officials said the announcement by the Neos surprised them.

By the evening, an OVP spokesman said it and the SPO had agreed to continue the talks later on Friday. President Alexander Van der Bellen confirmed the talks would continue.

"That must happen without delay. I want clarity. Quick and comprehensive clarity," he said in a televised address.

Together the FPO and OVP would have a majority, and a portion of the OVP backs that idea, but Nehammer has ruled out governing with FPO leader Herbert Kickl, who in turn insists he would lead any government involving his party.

The only other party that could join the coalition talks is the Greens – Van der Bellen's party and Nehammer's current coalition partner – but that relationship is fraught.

A snap election is possible but would not be in the interests of the OVP or SPO as polls suggest they would fare worse than before, with the FPO now leading both by more than 10 percentage points.

The FPO wasted no time in attacking Nehammer and likening his talks to the so-called "traffic-light coalition" in neighbouring Germany that recently collapsed.

"The FPO has been warning for months about this political monstrosity of the loser-traffic-light coalition," the FPO said on X. "People have had enough! It's time for you to resign, Mr Nehammer."