- POSTED: 12 Dec 2013 23:50
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Austria's two main centrist parties agreed on Thursday a re-run of their unloved "grand coalition" government after scraping a majority in their worst postwar election result on September 29.
VIENNA: Austria's two main centrist parties agreed on Thursday a re-run of their unloved "grand coalition" government after scraping a majority in their worst postwar election result on September 29.
"We know that the result that we have achieved together will mean that... Austria will stay on its successful course," Chancellor Werner Faymann of the Social Democrats (SPOe) said in Vienna.
"We don't have to re-invent the successful country that is Austria. We are an example in Europe for economic power and social stability... for people," the 53-year-old told a news conference.
"We have developed a comprehensive and very detailed programme."
The two parties have dominated politics since 1945, including the last government, but their popularity has been sliding for years, due in part to the rise of the far-right Freedom Party (FPOe), which came third in the election.
This is despite Austria, which has a population of eight million and escaped largely unscathed from the eurozone debt crisis, enjoying the lowest unemployment rate in the 28-nation European Union.
The SPOe won 27 per cent of the vote, down from 29 per cent at the last election in 2008, while the OeVP secured 24 per cent.
The anti-immigration and eurosceptic FPOe of Heinz-Christian Strache came in third place, with 20.5 per cent of support, an improved showing compared with 2008.
This, however, was short of former far-right leader Joerg Haider's record 27 per cent in 1999 when he formed a coalition with the OeVP, sending shockwaves through Europe.
The new coalition, likely to be led again by Faymann but with a new finance minister and possibly a 27-year-old foreign minister in the shape of Sebastian Kurz, was due to announce details of its plans on Friday.
After the election, the finance ministry revealed a sizeable hole in the country's finances, and it is unclear what mix of spending cuts and/or tax rises the new coalition has in mind.
Faymann said that "considerable changes" would be needed to cut government spending to free up money to invest in education, health care and infrastructure.
"I said before the election that we want to achieve a great deal on the spending side... you will see that when it comes to spending we have agreed a lot of serious steps, including with structural measures," he said.
He said that there would be "tax changes" but "nothing comparable to increases in value-added tax that we have seen in almost every other European country".
Michael Spindelegger, head of junior coalition partners the conservative People's Party (OeVP), was more downbeat, saying Austria had a "large need" to cut spending in order to achieve a balanced structural deficit by 2016.
He said that there would be a "pact for growth" and privatisations, "ensuring that by 2018 we come out of the crisis".