Austrian Chancellor Karl Nehammer has announced his intention to resign in the coming days following the collapse of coalition talks to form a new government.
The decision comes after negotiations between the Conservative People’s Party and the Social Democrats broke down for a second time.
The talks, which resumed after the liberal Neos Party abruptly withdrew from discussions, failed to yield an agreement.
“Unfortunately, I have to tell you today that the negotiations have ended and will not be continued by the People’s Party,” Nehammer stated on social media.
He attributed the breakdown to “destructive forces” within the Social Democratic Party, claiming they had “gained the upper hand” and that the People’s Party could not endorse a programme that undermined economic competitiveness.
Social Democratic leader Andreas Babler expressed disappointment at the People’s Party’s decision to walk away from the talks, describing it as “not a good decision for our country.”
Babler pointed to disagreements over addressing the “record deficit” left by the previous government as a key sticking point.
“I have offered to Karl Nehammer and the People’s Party to continue negotiating and called on them not to get up,” Babler told reporters.
Austria’s next government faces daunting economic challenges, including the need to save between €18 billion and €24 billion, as estimated by the EU Commission.
The country is also grappling with a two-year recession, rising unemployment, and a budget deficit of 3.7% of GDP, exceeding the EU’s 3% limit.
The coalition talks began in October after President Alexander Van der Bellen tasked Nehammer with forming a government. This followed the refusal of all other parties to cooperate with the far-right Freedom Party, which emerged victorious in September’s national election with 29.2% of the vote.
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