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The 2017 Austrian Elections

The 2017 Austrian Elections A hint on the gap between contemporary Austrian politics and Austrian economics heritage

No. 4, Mar.-Apr. 2017 » Bridging News

Since October 2006, Austria has been governed by a “big coalition” between the two major parties, the Conservative People’s Party ÖVP and the Social Democratic Party SPÖ. Years which, in the eyes of most, have been dominated by intergovernmental conflict and bipartisan obstruction.

Therefore, during the 2017 parliamentary election, a change was likely inevitable. A kind of change in favor of which the ÖVP and the Freedom Party FPÖ mostly campaigned. The former has gone through a seemingly fundamental alteration, just a few months before the election, by radically reorganizing the party’s structure and refocusing its political priorities.

Those changes and the public demand for them are quite clearly reflected in the recent voter turnout, with ÖVP becoming the strongest parliamentary party with 31.6% and the FPÖ almost equaling their historically best result from 1999, by getting 26%. The ÖVP and the FPÖ together reach 57.6% of the votes. That affords them 113 - 51 FPÖ, 62 ÖVP - of the 183 seats in the Austrian Parliament and thereby would result in a clear 61.7% majority. At the same time, left-wing parties had to deal with significant losses, with the Green Party dropping from its former result of 12.4% in 2013 to only 3.8%, which is below the threshold to enter Parliament.

This is especially interesting, not just because a center right coalition seems to be the most likely outcome of the coalition negotiations, but also because the two parties have a significant degree of overlap in their electoral manifestos and their campaign pledges, which is mostly due to the recent overhaul of the ÖVP. The “new ÖVP”’s structure is not only significantly more focused around their new party leader, Sebastian Kurz. It also constitutes a clear step to the right by copying a lot of positions from the right-wing populist Freedom Party, who have been calling inter alia for stricter migration policies. However, not just the FPÖ’s immigration policy seems to be of interest for the “new ÖVP”, but also the former opposition party’s foreign and security policies in general. This is a marked shift for a party which has spent the last 30 years, at least in its prior form, in government.

Only time will show whether the “new ÖVP” really plans to maintain those preferences and turn them into policies or if it was just empty rhetoric to gain right-wing and protest voters. In either case, their strategy worked, reversing their electoral bleeding and even gaining them the first place. This is especially remarkable considering that, before the ÖVP’s readjustment in May of 2017, most of the polls where clearly in favor of the FPÖ coming up as the strongest player.

But, more important than the similarities in migration, foreign and security policies, is that both of them are well known for their economic expertise. The FPÖ has been demanding reforms for several legislative cycles. Had they been able to better influence policy, Austria would face much fewer problems today and be in a better economic condition. So, a strong center right coalition between ÖVP and FPÖ could turn out to be a real chance for Austria to implement long overdue changes like structural reforms in the fields of taxes, pension, education and healthcare, expansion of working time flexibility and general encouragement of self-responsibility. This would enable entrepreneurs and businesses, which need to be relieved from inefficient labor laws and regulation, to create jobs, to brace Austria for the challenges and big opportunities of globalization and the international free market.

Notable as well would be that the pro-European, market oriented, Neos Party, reached 10 seats in the parliament, which would be enough to get an ÖVP-FPÖ coalition the two thirds needed for a constitutional majority. This window of opportunity could bring around fundamental changes within the so-called social partnership system, which has blocked innovative and creative processes especially on the labor market, and could bring this fatal tendency of “harmonizing ourselves to death” to an end.

All in all, during the the 2017 parliamentary election, the Austrian voters have clearly shown that they neither approve of the past legislature’s loose migration policy, nor of the stagnation of reforms and the enormous bureaucratic burden and high taxation by which the “big coalition” has repressed entrepreneurial pursuits and harmed the business environment of Austria.

 
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OEconomica No. 1, 2016