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Austria’s Kurz Seeks to Rule Alone After Nationalists Toppled

Boris Groendahl
Austria’s Kurz Seeks to Rule Alone After Nationalists Toppled

(Bloomberg) -- Austrian Chancellor Sebastian Kurz ended his controversial coalition with the nationalist Freedom Party after a video compromised his junior partner, seeking an early election in September in a gamble he can govern alone.

Twenty-six hours after Austrian politics was turned upside down by the publication of secretly filmed footage showing his deputy promising government contracts in return for campaign funding, Kurz said Saturday evening that it had become impossible to continue with the nationalists.

“Enough is enough,” Kurz said in the chancellery. “I want to work for our beautiful country, with the support of a majority of the people but without incidents, accidents and scandals.”

The collapse of the Austrian coalition is a massive defeat for one of the most successful populist parties on the continent, just a week before European Parliament elections in which nationalists from the U.K. to Poland want to strike a blow against the establishment. It’s also a sign of Europe’s political fragility as the decline of many mainstream parties makes coalition governments more unstable.

Heinz-Christian Strache stepped down as vice chancellor and head of the Freedom Party on Saturday, calling his behavior exposed in the video “dumb” and “embarrassing.” Yet his bid to rescue the coalition with Kurz’s People’s Party by falling onto his sword failed.

Kurz cited other scandals over the party’s links to far-right groups as well as racist slogans and poems in recent weeks that he’d “swallowed” to keep the government intact until now. The crisis also is a setback for the chancellor’s bid to neutralize the Freedom Party by embracing it.

“He didn’t tame the populist right, but they shot themselves in the foot, as they have always done in the past,” said Thomas Hofer, a political analyst and consultant in Vienna. “It’s a setback for his project that this government fails after less than two years.”

Snap elections can formally be called either by President Alexander Van der Bellen, who said Saturday that he supports an early vote to restore trust in democracy, or by parliament dissolving itself. Van der Bellen, who met with Kurz on Sunday morning, said he’d like the election to take place in September. Kurz said after the meeting that he wants to continue governing in the interim, but didn’t elaborate whether that means Freedom Party ministers except Strache continue on until the vote or if he’s pushing to replace them.

High Stakes

Kurz’s bid to go for a government without a partner -- a stint Social Democrat Bruno Kreisky last managed in the 1970s and early 1980s -- may prove to be a high-stakes gamble. Polls conducted before the scandalous video became public suggested he’d win the most votes, but with about 34% support he is significantly short of a margin large enough to stay in power without an ally.

“He’s in the best position to gain some voters from the Freedom Party, but I warn against counting the chicken before they’re hatched,” Hofer said. “There will be a fierce battle because the Freedom Party feels betrayed.”

The People’s Party’s first attempt to govern with the Freedom Party failed in 2002 after two years. The conservatives won an early election at the time but needed a coalition partner to govern. Should Kurz get into a similar situation, he may have difficulties finding allies: A new coalition with the Freedom Party seems impossible after the acrimonious split.

At the same time, the 32-year-old chancellor has has burned bridges to the opposition Social Democrats, with whom his party governed in most previous coalitions since World War II. Kurz built his rise to power on breaking with that tradition, so returning to the fold might hurt his credibility.

“The chancellor’s hope -- in fact, his only chance -- is that he manages to portray the FPOe as unreliable and himself as the only guarantor of a right-of-center course for Austria,” said Carsten Nickel, an analyst at advisory Teneo. “Kurz is effectively betting on a collapse of the FPOe. That is extremely risky in a country where the far-right has systematically established itself for decades, including in two coalition governments with the OeVP.”

Nickel said that “the likely unpopularity of a return to the old grand coalition which had governed Austria for almost the entire post-war period, might help the chancellor.”

Next week’s European election will be a first test for Kurz and his rivals. The People’s Party is likely to win the most votes in Austria, followed by the Social Democrats. Polls before the latest turn of events suggested Strache’s Freedom Party would take four of Austria’s 18 seats in the European chamber.

The footage from a 2017 meeting in Ibiza with a woman claiming to be the niece of a Russian oligarch was obtained by German publications Der Spiegel and Sueddeutsche Zeitung. The media outlets didn’t disclose how it obtained the video and said they don’t know the motives of the people who made it.

Strache, speaking after handing in his resignation to Kurz in Vienna on Saturday, confirmed the video’s authenticity and said he did nothing illegal. The video was shot illegally and “this was a targeted attempt of political assassination, this was hired work,” Strache told reporters.

Austria’s Audit Court said Saturday it would have questions about the Freedom Party’s finances in light of the video. The Justice Ministry told Kurier newspaper that prosecutors will be examining the video. The Freedom Party denies any wrongdoing.

(Updates with Van der Bellen in eighth paragraph.)

--With assistance from Jonathan Tirone, Patrick Donahue and Matthias Wabl.

To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Zoe Schneeweiss, Tony Czuczka

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