Vienna: Cautious optimism surrounds ongoing negotiations to form Austria’s first-ever three-party coalition government. Led by the conservative People’s Party, the coalition seeks to unite with the Socialist and Liberal parties following the National Council (Parliament) elections held in late September.
According to Emirates News Agency, these elections saw the far-right Freedom Party emerge as the largest party, but all parliamentary factions have declined to ally with it due to its policies. President Alexander Van der Bellen tasked Karl Nehammer, Austria’s Chancellor and leader of the People’s Party, with forming the new government. Nehammer’s party secured second place, and both the People’s Party and the Socialist Party, which ranked second and third respectively, rejected forming an alliance with the far-right party.
Negotiations for the new coalition, known as the “Traffic Light Coalition” due to the colours of the three participating parties, commenced approximately seven weeks after the elections.
This alliance marks the first tripartite government in Austria’s Second Republic.
Leaders of the three parties acknowledged the difficulties of the task since the start of the negotiations. They cited challenges stemming from their ideological differences, representing Socialist, Liberal, and bourgeois streams, and their diverse approaches to addressing Austria’s pressing issues. These include tackling economic recession and reducing the country’s significant budget deficit, which the European Commission recently warned about. Austria revised its 2024 deficit forecast to 3.3 percent of GDP, exceeding the EU’s Maastricht Treaty limit of 3 percent annually.
Austria’s Fiscal Council, which advises the government, has projected a 4.1 percent deficit of GDP in 2025. The forecast attributes the worsening deficit to the economic downturn, sluggish recovery, and the financial impact of recent devastating floods in Lower Austria.
Despite these challenges, leaders of the three parties have described the negotiations
as constructive, particularly within the subgroups addressing key issues. They affirmed their shared determination to confront urgent challenges and emphasised the need to intensify dialogue to achieve their common goal of forming a stable, future-oriented government.