Talks on a new 3-party Austrian government collapse as the smallest party pulls out

VIENNA — Talks on forming a new three-party government in Austria collapsed Friday as the smallest of the prospective coalition partners pulled the plug on the negotiations.

The talks had dragged on since Austria's president tasked conservative Chancellor Karl Nehammer in October with putting together a new government. That decision came after all other parties refused to work with the leader of the far-right Freedom Party, which in September won a national election for the first time.

Nehammer has been trying to assemble a coalition of his Austrian People's Party with the center-left Social Democrats and the liberal Neos party.

Nehammer's party and the Social Democrats have governed Austria together in the past but have the barest possible majority in the parliament elected in September, with a combined 92 of the 183 seats. That was widely considered too small a cushion, and the two parties sought to bring in Neos.

But Neos leader Beate Meinl-Reisinger said she informed Nehammer, Social Democratic leader Andreas Babler and President Alexander Van der Bellen early Friday that her party ''won't continue'' talks on becoming a partner in a new government.

She pointed to the implications of a ''budget hole'' left by the last government as a major source of difficulty, adding that the election showed a desire for change but the talks appeared to be going backward rather than forward in recent days.

The next government in Austria faces the challenge of having to save between 18 to 24 billion euros, according to the EU Commission. In addition, Austria's economy is in decline with rising unemployment and continuing recession.

Austrian People's Party general secretary Christian Stocker blamed ''backward-looking forces'' among the Social Democrats for prompting the collapse of the talks.

Nehammer said in a post on social media on Friday evening that he ''regretted'' the decision by the Neos to pull out of the coalition talks.

He said that his party continues to be ready to ''assume responsibility," and to implement reforms, especially in the areas of improving economic competitiveness and implementing a clear asylum and migration policy.

''The constructive forces of the political center are called upon to come along on this path with us now,'' Nehammer said.

Social democratic leader Andreas Babler said in a press conference Friday evening that he was surprised by the decision of the Neos to pull out of the coalition talks.

Babler said one of the main sticking points was how to repair the budget deficit and that the Social Democrats had argued for a fair solution. ''Our hand remains extended,'' he said. ''In these times of crisis there is no other alternative than to assume responsibility.''

Austria's President Alexander Van der Bellen also addressed reporters Friday evening and admitted that talks for a three-way coalition had broken down. He said the task of forming a government and agreeing on a government platform still remains valid.

''In a liberal democracy, this needs a majority in parliament that can decide on the necessary laws. Karl Nehammer and Andreas Babler have told me today in personal conversations that they continue to work on a coalition. This needs to happen without delay. I want clarity,'' Van der Bellen said.

It wasn't immediately clear how the situation could be resolved. The two bigger parties could potentially try to form a government alone or turn to the environmentalist Greens as a prospective third partner.

Nehammer's often-tense two-party outgoing coalition with the Greens lost its parliamentary majority in the election, though it remains in office as a caretaker administration.

According to the latest opinion polls published in December, the Freedom Party increased its support to between 35% and 37%.

Its general secretary, Michael Schnedlitz, accused the chancellor of refusing to accept his election defeat and said it had long warned against a three-way coalition ''on the German model'' — a reference to the quarrelsome government in neighboring Germany that collapsed in November. Germany is holding an early election next month.

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