On October 1, 2006, the Social Democrats scored a surprise victory in Austria’s general election. Running on pledges to improve social justice, SPO leader Alfred Gusenbauer narrowly won with just over 35 percent of the vote, slightly ahead of incumbent conservative chancellor Wolfgang Schuessel.
Schuessel accepted defeat and stepped down after six years of power-sharing with the far-right. However, the SPO didn’t gain enough votes to form a government, and Social Democrat president Heinz Fischer urged Gusenbauer to open talks with the conservatives to find some coalition agreement.
So-called “grand coalitions” are a common feature of Austrian post-war politics. Talks repeatedly stumbled on mutual accusations of bad faith and sabotage. But growing public discontent over delays prompted Gusenbauer and Schuessel to set a deadline to reach a deal by January 8th.
A deal was reached – the Social Democrats bowed to conservative demands on budget issues, watering down plans for a minimum income of 800 euros a month. They only gained a small rise in minimum welfare and state pension levels. Gusenbauer also agreed to delay a three-billion euro tax cut for middle incomes – one of his key campaign pledges. Other concessions include softening promises to abolish tuition fees introduced by the incumbent government.
One of the major sticking points was the Social Democrats’ opposition to plans by the previous government to purchase 18 Eurofighter jets from aircraft builder EADS. The SPO argues that a country like Austria which enjoys a neutral position doesn’t need to spend two billion euros on fighter jets, and should be investing money in other areas like education and social care. It has been agreed the future minister of defence will negotiate a change of contract with EADS. Cabinet appointments for the new grand coalition will be decided on Tuesday before the government is sworn in on Thursday.