Austria far-right nears historic rule with path to form Cabinet

Marton Eder and Jonathan Tirone, Bloomberg News on Jan 6, 2025

By clicking submit, I authorize Arcamax and its affiliates to: (1) use, sell, and share my information for marketing purposes, including cross-context behavioral advertising, as described in our Privacy Policy , (2) add to information that I provide with other information like interests inferred from web page views, or data lawfully obtained from data brokers, such as past purchase or location data, or publicly available data, (3) contact me or enable others to contact me by email or other means with offers for different types of goods and services, and (4) retain my information while I am engaging with marketing messages that I receive and for a reasonable amount of time thereafter. I understand I can opt out at any time through an email that I receive, or by clicking here

Austria’s far-right leader Herbert Kickl received a mandate from President Alexander Van der Bellen to form a government, putting the Freedom Party chief one step closer to becoming chancellor.

“I have not taken this step lightly,” Van der Bellen told reporters on Monday. “I will continue to ensure that the principles and rules of our constitution will be upheld.”

Despite previously pledging that they would not work with Kickl, members of the conservative People’s Party reversed course on Sunday after Chancellor Karl Nehammer failed to form a centrist coalition and resigned. The 56-year-old Kickl met with Van der Bellen in Vienna on Monday to discuss forming a government as about 500 people gathered nearby to protest.

Austria’s ATX stock index rose 0.7% on Monday, a public holiday in Austria. Ten-year bond yields were little changed at 2.85%, in line with German notes.

Should Kickl take power, it would mark the first time a far-right party has led Austria since the end of the Second World War. It would also add to a nationalist surge in Europe. With two weeks to go until Donald Trump takes the U.S. presidency, Germany is readying for elections in February in which the far-right is expected to gain ground, and France has grappled with electoral gridlock since a leftist alliance and Marine Le Pen’s far-right National Rally outperformed rivals in elections last June.

The Freedom Party campaigned on a pro-Russian, anti-immigrant and climate-skeptic platform. Kickl, a divisive figure in the nation of about nine million, polled as one of the country’s least-liked politicians while at the same time leading his party to the cusp of power. He aggressively opposed a vaccine mandate during the pandemic, and supported far-right activists promoting the mass deportation of immigrants. He has also vowed to cooperate with Viktor Orban, the controversial prime minister in neighboring Hungary.

The People’s Party for decades sought to keep the Freedom Party at bay, either by forming coalitions with rival parties or by only including it as a junior government partner — a means of exerting dominance. Yet that strategy began to unravel after the country’s September election, in which the Freedom Party won 57 seats, up from 26 in 2019, and its overall share of the vote jumped almost 13 points. The People’s Party claimed only 51 seats, a 20-seat loss.

While Austria’s other parties attempted to close ranks after the election to keep the Freedom Party out of government — what the party’s leader dubbed a “Kickl prevention strategy” — Nehammer’s resignation on Saturday brought that to an end. After failing to nail down a coalition with the Social Democrats and the liberal NEOS, Nehammer’s interim successor, People’s Party secretary Christian Stocker, quickly said he was ready to discuss a coalition with the Freedom Party.

The change is an admission of the party’s dwindling public support, as well as Nehammer’s failure to lure voters after taking over from one-time political prodigy Sebastian Kurz in 2021. Powerful provincial leaders and a faction of industrialists affiliated with the People’s Party had also pushed for aligning with the far right.

“Since yesterday, the situation looks different,” Stocker, until recently a sharp critic of the Freedom Party, said on Sunday. “This country needs a stable government right now and we cannot keep losing time in election campaigns.”

The chances of a Freedom Party-People’s Party coalition have increased significantly, but aren’t a foregone conclusion, said Marcus How, a geopolitical risk analyst at VE Insight in Vienna.

“Kickl holds most of the cards, and can therefore afford to be maximalist in his negotiating stance,” How said. “If the negotiations fail, he can simply lean back and fight an election which the polls indicate would bring further landslide gains” for the Freedom Party.

Unlike younger far-right groups in Europe, the Freedom Party has been active in Austria for decades. In the past, Kickl has publicly referred to Van der Bellen, 80, as a “senile mummy.” When he served as interior minister, some foreign intelligence agencies mistrusted him enough to stop sharing sensitive information with Austria.

To become chancellor, Kickl will need to reconcile his political views with the conservatives, who continue to hold powerful positions across Austria’s economy and society.

Austria’s new leaders also need to confront serious headwinds for the nation’s industrial producers following years of high wage growth and rising energy prices that hurt competitiveness. And after two years of economic contraction, Austria also needs to approve billions in budget consolidating measures to avoid incurring penalties from the European Union.

In a statement on Sunday, Kickl said he would prioritize affordable living, justice, security, freedom and peace.

“We bear no responsibility for wasted time, chaotic conditions and the enormous erosion of trust,” Kickl said Sunday on Facebook. “Clearly, the Freedom Party has been and is the only stable point in Austrian politics.”