Coalition braced for rocky ride

Date: 12/09/1996

By Thomas Klau

AUSTRIA's ruling coalition is bracing itself for a stinging slap on the wrist as the country's first elections to the European Parliament give disillusioned voters a chance to express their disappointment with EU membership.

Many observers fear the poll on 13 October might result in a triumph for the the far-right Freedom Party (FPÖ) led by populist Jörg Haider.

Chancellor Franz Vranitzky's coalition, in which the Sozialdemokratische Partei Österreichs (SPÖ) shares power with the Österreichische Volkspartei's (ÖVP) Conservatives, has put its popularity at risk in an all-out attempt to bring the spiralling public deficit under control.

The government's overriding priority is to make sure that Austria meets the Maastricht Treaty convergence criteria next year to ensure it is not left behind when others move to monetary union in January 1999. This has forced the coalition to make a number of painful cost-cutting decisions which have hit ordinary Austrians' pockets hard.

“The pain is beginning to feed through,” says Helmut Weixler, a former journalist with Austria's Profil magazine now working as a spokesman for the Green Party in the European Parliament.

Recent opinion polls suggest, however, that the Social Democrats and the Conservatives between them will still receive the support of more than half the electorate, with 27&percent; of the vote each.

The Liberal Party is being credited with 12&percent; of the vote, while the Greens - a political movement which traditionally does well in European elections - look set to recover from

the last national election in December 1995 and garner about 11&percent; of the vote.

But the unofficial winner of the election might well be Haider's FPÖ, which could emerge as the biggest or second biggest vote-getter in Austria.

Haider, who has been waging a vigorous campaign against the political establishment's pro-European policies, looks set to profit from the widespread perception that EU membership has not brought Austrians the benefits they were led to expect.

While Union membership has led to the dismantling of tariff barriers and exposed the country's long-cosseted entrepreneurs to an unprecedented blast of competition from more aggressive EU companies, the tangible benefits held out when voters were being wooed to agree to EU membership, such as lower food prices, have been slow to feed through.

Meanwhile, the onslaught of foreign competition both from within the EU and from Austria's eastern neighbours has resulted in the spectacular failure of a number of high-profile firms.

Others, however, are proving their ability to survive in the new environment, slashing costs by as much as 20&percent; overnight and teaming up with foreign partners.

But the long-delayed revolution in the business environment, widely perceived by analysts as necessary to preserve Austria's competitive position in the 21st century, comes at a high cost to many unskilled and poorly trained Austrians.

Companies in the textile, construction and chemical sectors are reducing their Austrian workforces and moving jobs east, where labour costs amount to as little as a fifth of Austrian wages.

Many fear a resounding success for the FPÖ would do further damage to Austria's standing abroad. The country's growing support for far-right policies, and the dark period of German occupation, have been prominent in the minds of foreign observers ever since former Austrian President Kurt Waldheim was barred from visiting the US, following disclosures about his record as a German army officer in World War II.

Other topics looming large in the electoral campaign are the environment and the future of Austria's cherished post-war neutrality. Again, both issues seem to be putting the ruling parties at a disadvantage.

While integration into the EU has led to the lowering of some environmental standards, the debate about the country's potential NATO membership has revealed that most Austrians remain emotionally attached to a neutrality policy initially forced upon them by the Soviet Union.

The ÖVP and the SPÖ, most of whose leaders are privately convinced that membership of NATO will eventually be inevitable, have responded to the popular mood by playing down the issue. But the Greens are challenging the government to make a clear commitment in favour of neutrality, putting both parties in an awkward position.

Whatever the outcome of the elections, the Vranitzky government is likely to breathe a sigh of relief on the evening of 13 October. For unless the government parties fall out or lose their majority in parliament, next month's Euro-vote will be the last national election until December 1999 - well after the scheduled start of monetary union.