Vienna, Austria – Austrian Chancellor Karl Nehammer announced his resignation Saturday, following a second failed attempt to form a new government. Negotiations between the People's Party and the Social Democrats collapsed after the Neos party unexpectedly withdrew.
The People's Party cited "destructive forces" within the Social Democrats as the reason for the breakdown, arguing that the proposed coalition program threatened economic competitiveness. Nehammer stated in a social media post that the talks would not continue.
Social Democrat leader Andreas Babler expressed regret, calling the decision detrimental to Austria. He pointed to disagreements over addressing the country's substantial budget deficit, inherited from the previous administration, as a key stumbling block. Babler urged continued negotiations, emphasizing the need for a swift solution to the economic challenges facing the country.
The upcoming Austrian government faces significant economic hurdles. The EU Commission estimates austerity measures of €18 to €24 billion will be required. Austria has been mired in recession for two years, with rising unemployment and a budget deficit exceeding the EU's 3% limit at 3.7% of GDP.
The current deadlock stems from October's presidential mandate for Nehammer to form a government. This request followed the refusal of other parties to cooperate with the far-right Freedom Party, which secured a historic 29.2% of the vote in September.
