AUSTRIA | New Coalition of Social Democrats, Conservatives and Liberals Plans Cuts

On September 29 in 2024 parliamentary elections took place in Austria. But it was not until March 2025 that a new government was formed. It took three separate negotiating attempts before it could be formed: First between the conservative people’s party (ÖVP), social democrat SPÖ and liberal Neos, then between the right-wing populist freedom party (FPÖ), led by Herbert Kickl, and ÖVP and finally ÖVP-SPÖ-Neos again.

If ÖVP and FPÖ had reached an agreement, it would have been the first government headed by a FPÖ Chancellor – but these negotiations failed. On the surface it failed because of the question of who would receive which ministries. But in fact this was just an expression of deeper underlying issues. Fundamentally the ÖVP and the majority of the ruling class mistrust the FPÖ and feared losing control to them on sensitive issues. Even those industrialists who had been advocators of the FPÖ leading the government had become uneasy, as the FPÖ, leading the polls and further increasing its support (and riding the Trump wave), had become more confident and wanted to implement more of its ideological cornerstones than in the FPÖ’s previous government participations in 2000 and 2017.

The ruling class had no problem with aggressively attacking immigrants, a further deepening of the culture wars and nibbling away at bourgeois democratic rules. Their main focus were the costs of labour. They wanted measures that reduced the unit labour costs of companies. In their view, the problem though was that with Herbert Kickl as chancellor and the FPÖ as the leading party the government would have been openly critical of the EU as well as pro-Russia and would have been very vocal in Brussels. This was a problem for them, as seventy percent of Austria’s exports go to the EU and the Balkans is the number one target region for Austrian capital. This is why the negotiations ultimately failed and the previous negotiations between ÖVP, SPÖ and Neos were taken up again, leading to the formation of a new government including SPÖ-Chair and supposed left-winger Andreas Babler as vice chancellor.

Budget Consolidation

The global economy is struggling, the European economy is weakening and Austria is in its third year of recession. The outlook is bleak. This is the background to the formation of a new government. For the ruling class the central tasks of the new government are stability and cost reductions for companies – this is what the new coalition government of SPÖ/ÖVP/Neos now signed up for. The task of the social democrats is to help prevent protests via their control over the Austrian Trade Union Federation ÖGB through the union leadership. The second will be achieved through cuts in non-wage labour costs and a deregulation department in the new government, among other measures. The government package does contain some positive announcements, for example regarding rents, but most of them are subject to “budget provisos”. In contrast, the measures that are going to be implemented without such provisos include billions for rearmament and 6,4 billion Euros in cuts. Yet, there is no shortage of money: in total, the dividends of ATX (Austrian stock exchange index) companies alone were higher in 2024 than the cuts planned for 2025.

Staying Silent and Playing Along Strengthens the FPÖ

Andreas Babler has moved miles away from the left-wing announcements (such as demanding a shortening of the working week to 32 hours with full pay compensation) that made him leader of the SPÖ two years ago. What remains is “responsible” rhetoric. Babler has disappointed all hopes. Many criticize this, but at the same time see no alternative to this coalition in order to prevent a Chancellor Kickl. The concept of accepting cuts and whatever it takes in order to forge a government against Kickl sounds reasonable at first. But the result is a severe austerity package that strengthens the FPÖ all the more as it will continue its hypocritical populist criticism of the ‘establishment’ parties. The government agreement includes numerous FPÖ demands on “migration” and “asylum”. The living standards of ordinary working class people will continue to deteriorate. Dissatisfaction will increase – rightly so. The instability of governments is a symptom of the general crisis of capitalism – this new government will be no exception. As long as there is no militant left and socialist alternative, the right will benefit!

Organising resistance – now!

The electoral successes of the Communist Party (KPÖ) in recent years (for example taking up to 30% of the vote in mayoral elections in Graz and Salzburg in 2022 and 2023), as well as the (now coming to an end) support for Babler when he was elected chair in 2023, show how great the desire for a genuine alternative in the interests of working people is. Building such an alternative to this coalition government starts with a militant programme for the funding of education, health and social services, with job guarantees in the event of company closures, for affordable housing and equal rights for everyone who lives here – financed by the profits of the corporations and the assets of the super-rich. Campaigning on such a programme could draw behind it initial Babler supporters, shop stewards and union activists, KPÖ activists as well activists around the KPÖ and, above all, workers inspired by these demands. Together, a campaign and movement could be built. This could be the starting point for a political alternative, a new party for workers and young people. However such a party would need a socialist programme that breaks with capitalism in order to put an end to cuts and the far right – once and for all!

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