AUSTRIA'S OCTOBER 1 NATIONAL ELECTIONS -- FINDING

UNCLAS SECTION 01 OF 04 VIENNA 002787 SIPDIS SIPDIS SENSITIVE STATE FOR EUR/AGS - SAINT-ANDRE E.O. 12958: N/A TAGS: PGOV PREL AU SUBJECT: AUSTRIA'S OCTOBER 1 NATIONAL ELECTIONS -- FINDING "COALITIONS OF THE WILLING" VIENNA 00002787 001.2 OF 004 ¶1. (SBU) Summary: Austria's October 1 elections take place in the context of a political shift that followed this year's revelations of fraud in the trade union-affiliated bank, BAWAG. This established a new political reality in which Chancellor Wolfgang Schussel's conservative People's Party (OVP) has consistently polled ahead of the Social Democratic Party (SPO) by two to four percentage points. This shift, combined with Schuessel's personal popularity, puts the OVP in the driver's seat to lead the next Austrian government. The campaign so far has been rather formulaic, with the OVP appealing to trust in Schuessel, and the SPO making vague calls for greater "fairness." The political theater has come from the xenophobic leader of the Freedom Party (FPO) -- not Joerg Haider, who left the FPO to form his own party and then fade as a political force, but rather Heinz-Christian Strache. ¶2. (SBU) Summary continued: The uncertainty surrounding this campaign is less one of vote numbers than of post-election coalition negotiations. Even OVP loyalists discount the possibility of the OVP winning an absolute majority. One key question is whether the OVP will have options beyond forming a Grand Coalition with the SPO. The other is whether the SPO and Greens will together garner enough seats to form a government, thereby depriving Schuessel of the Chancellorship even if the OVP comes in first. Even if Schuessel remains Chancellor, the next coalition government could well include a non-OVP Foreign Minister. Foreign policy would likely be subject to even stricter constraints in a coalition agreement between the OVP and a left-leaning party. That said, policy change would come only incrementally. End Summary. -------------- Can You Spell BAWAG? -------------- ¶3. (SBU) With less than two weeks to go before Austria's national parliamentary elections on October 1, the big news seems to be the lack of news. If it seems that the major campaign themes are the same as they would have been six months ago, that is because the defining event of this campaign season occurred six months ago. That was when it became public that the Austrian Trade Union Federation (OGB) bank, the "Bank fuer Arbeit und Wirtschaft A.G." (BAWAG),had involved itself in massive fraud. What is more, the OGB bailed out BAWAG with funds from its workers' strike fund. Although the OGB and the Social Democratic Party of Austria (SPO) are separate entities, the relationship between the two had been almost organic. SPO party leader Alfred Gusenbauer did what he could to stop the bleeding. Among other things, he declared that the SPO would no longer grant slots on its parliamentary election list to union officials. Naturally, this carried its own backlash. Union workers, who had traditionally undertaken a significant share of the SPO's electioneering work, were not amused. ¶4. (SBU) Chancellor Wolfgang Schuessel and his party, the conservative Austrian People's Party (OVP),played the BAWAG affair about as well as one could imagine. Schuessel stayed on the high road, as, for instance, when he led the government in granting a bailout of the OGB "in the interests of the workers." What is more, one can barely find the letters "BAWAG" in OVP campaign material. The result is that no one is sick of hearing about it, and no one thinks of it as yesterday's story. It remains the 800-pound gorilla in the next room, emitting the occasional grunt (as when it became public last week that the former BAWAG head had paid a 70,000 Euro "consulting fee" in 1999 to former SPO Chancellor Fritz Vranitzky, the last truly iconic SPO politician). -------------- What Do The Polls Say? -------------- ¶5. (SBU) Thanks to BAWAG, the strategic landscape for the election has shifted. For the past six years, the SPO had led the OVP in opinion polls by some two to four points. The OVP strategy had been to stress Schuessel's personal popularity over Gusenbauer. This had paid off in the 2002 elections, when the OVP, at 42 percent, scored far ahead of its polling numbers and well ahead of the SPO. Now, the parties' standings in the polls have reversed themselves. It is the OVP that is garnering support in the range of 38-39 percent, and the SPO that is trailing at 35-36 percent. If Schuessel again delivers an electoral "bump," the OVP could well approach its 2002 vote share. ¶6. (SBU) Both the Greens and the Freedom Party of Austria (FPO) are flirting with double digit poll numbers. The VIENNA 00002787 002.2 OF 004 Greens tend to do worse in elections than their polling numbers indicate. This may be because those who are Green at heart tend to decide not to "waste" their vote. The FPO's situation is the opposite. It seems that FPO sympathizers feel embarassed to express their true preference to a pollster, but nevertheless pull the lever for the FPO list. The "Alliance-Future-Austria" (BZO) party, which Joerg Haider splintered off of the FPO, is fading fast, despite its current status as the junior governing coalition party. The BZO is finding it hard to reach the four percent threshold for entry into parliament. Most observers believe that the BZO will have to win a seat outright in order to enter parliament. This is a tall order even in the putative BZO "stronghold" of Haider's Carinthia. An out-and-out protest party which formed around the person of former SPO legislator Hans-Peter Martin is also hovering around the three-to-four percent mark in polls. As in many mature democracies, the wild card is the "undecided" bloc. Almost a third of poll respondents is in that category. With so much riding on the results at the margins, this is an important factor. -------------- Where Do They Stand? -------------- ¶7. (SBU) Schuessel's OVP is running almost exclusively on its record and on the person of Schuessel. Typical is one of the party's posters that features the rather oxymoronic slogan, "Stay better." Another common poster shows Schuessel's smiling face with the slogan, "Because he can do it." Outside of Vienna, OVP campaign material highlights the more popular members of the current governing team. On the strength of solid if unspectacular economic growth and job creation, together with inflation and unemployment rates that are among the EU's best, the OVP is banking on an almost content-neutral message of "staying the course." ¶8. (SBU) If the OVP campaign effort seems to lack inspiration, that of the opposition SPO seems almost mechanical. SPO campaign material calls for "a new fairness" in the distribution of wealth and jobs. For a party that has been in opposition for almost six years, the SPO has identified remarkably little substance upon which to campaign. Part of this is because Schuessel has managed to coopt key SPO issues. The OVP is against nuclear power, against genetically-modified organisms (GMO) in agriculture, and in favor of neutrality. Even more frustratingly for the SPO, the things Schuessel has done over their objections, such as pension reform and corporate tax cuts, have actually worked. Also unhelpful to the SPO cause is the figure of Gusenbauer, who is a competent party man but only an average campaigner. Posters showing him interacting with groups of (presumably) concerned citizens are supposed to show his human side, but risk displaying a certain befuddlement instead. ¶9. (SBU) The Greens are usually good for campaign spice. The current publicity strategy seems to focus on solidifying the Green base. Posters highlighting the preferences of "real people" range from the assertive (a supposedly Turkish man saying, "because Austria is my homeland, too") to the pouty (a young woman saying, because (Education Minister Elisabeth) Gehrer has saved enough on my education.") A newer effort highlights popular party figures. For instance, party leader Alexander van der Bellen, a professorial type who is among Austria's most popular politicians, proclaims, "it can be done without corruption." ¶10. (SBU) The days when the Greens were the wild cards are long over. Instead, the BZO, FPO and Hans-Peter Martin's party are vying for the protest vote. BZO standard-bearer Peter Westenthaler has been unable to draw significant numbers of the FPO base to his side, and no one else on the political landscape seems disposed to jump on his rattletrap of a bandwagon. Haider has been virtually invisible to date. BZO election themes are hard to identify -- the BZO is against crime and illegal immigration, and they are for a stronger economy, but who isn't? ¶11. (SBU) There's no problem identifying the policy stance of the "original" FPO. Under party leader Heinz-Christian Strache, the FPO has grabbed the jingoist mantle. Joerg Haider has faded into the Carinthian hills for the moment. The xenophobic firebrand is Strache, whose assertive claim to be the FPO's anti-everything is what drove Haider out of the party. A typical FPO campaign slogan is "Daham statt Islam" -- roughly, "Down Home, not Islam." Another is "Deutsch statt Nix Versteh'n" -- a nasty swipe at immigrants roughly on the level of "No espeak ze English." The latest VIENNA 00002787 003.2 OF 004 installment from the FPO brain trust shows a bright-blue eyed Strache (who clearly thinks his own image is a major selling point) with titles such as "The Patriot" and "Austria First." ¶12. (SBU) Hans-Peter Martin's party is a final, unique entrant into the Austrian electoral mix. Martin is a quintessential "anti-" politican. A former SPO member of the European Parliament, he made a name for himself by "exposing" the excessive benefits European parliamentarians receive. During the last European Parliament campaign, he received significant backing from Austria's largest newspaper, the Kronenzeitung. This has fallen off during the current national campaign. Nevertheless, Martin has made some headway by is banking on the fact that "none of the above" will always do well in any democratic election. -------------- Putting Humpty Together -------------- ¶13. (SBU) Observers do not expect huge swings in opinion in the last two weeks of the campaign. The real question is what the parties make of the final result. One or two percent of the vote will determine whether two parties -- the BZO and Hans-Pater Martin's party -- enter parliament at all. If they do not, almost eight percent of the vote could be "wasted." Whether these two make it or not, possible coalitions reflecting current vote predictions include a "Grand" Coalition (OVP-SPO),an OVP-Green coalition, or an SPO-Green coalition. The OVP and SPO have said that they rule out coalitions with the FPO or with Hans-Peter Martin. However, in a Vienna where political pragmatism rules the day and alliance shift like liaisons in the operetta "Wiener Blut," anything is possible. ¶14. (SBU) OVP sages tell us they hope the OVP and the FPO together win over half the seats in parliament. That is not/not to say they would cooperate in government. Instead, the calculation is that this would make it impossible for the SPO to form a government without the OVP. ¶15. (SBU) The prospect of an OVP-Green (or "Black-Green") coalition, seems to intrigue Schuessel. There is a precedent in the state government of Upper Austria. Van der Bellen is a reasonable and experienced figure who could well serve successfully as Foreign Minister. The Greens have some depth for staffing ministerial slots, although they are thin beyond the first level. In fact, Schuessel probably prefers a relatively weak partner. In his governing alliance with the FPO, he was able to marginalize his junior partner. The objection to a Black-Green government is less likely to come from the OVP than from the Greens. The Greens' Vienna branch, which forms roughly half of the national party, represents a "fundamentalist" wing that demonizes Schuessel and the OVP. In the rest of Austria, Greens generally come from a more conservative, conservationist background. Van der Bellen has toyed with the question of entering government with the OVP in the past, and this has always had the result of stirring a hornets' nest on the substantial left-wing of the party. ¶16. (SBU) Most Austrians like Grand Coalitions. They are comfortable with the idea of broad consensus, even at the expense of effectiveness. For all the water that has gone under the bridge since 2000, may Austrians still see Black-Red as a "natural" government. Some observers question whether Gusenbauer could stand playing second fiddle to Schuessel. Others point out that Gusenbauer spent most of his political career under Grand Coalitions. It is not so much Gusenbauer as Schuessel who would chafe at this configuration. Schuessel values his freedom of action, especially on foreign policy. He would not relish having to share significant executive power with a major party. Erhardt Busek, the former OVP Vice Chancellor under Vranitzky told us recently that the problem with Grand Coalitions in Austria is that it is hard to make progress except at the level of the lowest common denominator. -------------- What Does It Mean for U.S. Interests? -------------- ¶17. (SBU) Interestingly for Schuessel, a former Foreign Minister who takes personal charge of the foreign affairs portfolio, foreign policy has been practically invisible during the current campaign. Iraq, Iran, the fight against terrorism, the spread of democracy in Eastern Europe -- none of these issues has made it to any party's campaign material. Of course, Strache's FPO has highlighted the fear of Turkish VIENNA 00002787 004.2 OF 004 entry into the EU (with posters showing St. Stephen's Cathedral replaced by Hagia Sophia). He has also taken a swipe at the EU, calling for "Homeland instead of Schuessel and Brussels." But there is no depth beyond fear-mongering, and the other parties have practically ignored the issue. ¶18. (SBU) Unless a foreign policy issue arises in the next two weeks -- always a possibility, of course -- the impact of the upcoming election on Austrian foreign policy will be largely a matter of personalities. Even if Schuessel retains the Chancellorship -- and he is the odds-on favorite -- it is hard to see how he could avoid turning the Foreign Ministry over to a Green or SPO coalition partner. (Naturally, if the BZO manages to enter parliament and the OVP does well enough to form a coalition with its current partner, things would continue much as they are. But even Vice Chancellor Hubert Gorbach, the BZO Transportation Minister, has already lined up a private sector job -- or so we hear.) With van der Bellen or Gusenbauer as Foreign Minister, Austrian foreign policy would probably hew even more closely to the narrow constraints of the coalition agreement establishing the government. This would make it even less likely than it is now that Austria would join bold new initiatives in the world. Nevertheless, there still remains a solid cadre of officials with SPO affiliations in government service, including in the Foreign, Interior and Defense Ministries. (Austrian Ambassador to Washington Eva Nowotny is one.) We have worked well with such officials in the fields of law enforcement cooperation, for instance, as well as other areas. These individuals further increase the likelihood that continuity will be the watchword in foreign policy, regardless of who leads the next Austrian government. McCaw