Austrian chancellor to resign as coalition talks collapse

VIENNA — Austrian Chancellor Karl Nehammer said on Saturday he will resign in the coming days after breaking off coalition talks with the Social Democrats over disagreements on key issues.

The announcement came just one day after the liberal Neos party withdrew from the three-party coalition talks to form a centrist government.

"Unfortunately I have to tell you today that the negotiations have ended and will not be continued by the People's Party," said Nehammer, the conservative party's leader, in a statement on social media.

He said "destructive forces" in the Social Democratic Party have "gained the upper hand" and that the People's Party will not sign on to a program that it considers to be against economic competitiveness.

Social Democratic leader Andreas Babler said he regretted the People's Party decision to end the talks. "This is not a good decision for our country."

Babler said one of the main stumbling blocks had to do with how to repair the "record deficit" left by the previous government.

He blamed the People's Party for seeking to skimp on pensions and salaries for teachers and police officers, while Nehammer blamed the Social Democrats for insisting on taxing wealth and inheritance, the latter's flagship campaign policy.

The coalition talks' collapse three months after September's parliamentary election underscores the growing difficulty of forming stable governments in European countries, such as Germany and France, where the far right is on the rise but many parties are loath to partner with them.

The next government in Austria faces the challenge of having to save between 18 and 24 billion euros ($18.6 and $24.7 billion), according to the European Commission. In addition, Austria has been in a recession for the past two years, is experiencing rising unemployment, and its budget deficit is at 3.7 percent of GDP — above the European Union's limit of 3 percent.

Austrian news agency APA reported on Sunday that the People's Party has nominated its General Secretary Christian Stocker to succeed Nehammer as party leader.

Stocker, a lawyer and member of the Austrian Parliament, has served as general secretary of the People's Party since 2022. President Alexander Van der Bellen was expected to speak later on Sunday.

Agencies via Xinhua