AUSTRIA'S OCTOBER 1 NATIONAL ELECTIONS --

UNCLAS SECTION 01 OF 02 VIENNA 002924

SIPDIS

C O R R E C T E D C O P Y NAME CORRECTED IN SUBJ LINE

SIPDIS
SENSITIVE

STATE FOR EUR/AGS

E.O. 12958: N/A
TAGS: PGOV PREL AU
SUBJECT: AUSTRIA'S OCTOBER 1 NATIONAL ELECTIONS --
CHANCELLOR SCHUESSEL KEEPS WIRE-TO-WIRE LEAD

REF: VIENNA 2787

VIENNA 00002924 001.4 OF 002



1. (SBU) Summary: This weekend's elections will likely
result in a clear victory by the conservative People's Party
(OVP) of Chancellor Wolfgang Schuessel. It will be no
landslide, however, as the Social Democratic Party (SPO) has
managed to shore up its position. Under current conditions,
the most likely coalition to result will be an OVP-SPO Grand
Coalition. The process of government formation will take at
least a month, and could drag on longer. End Summary.

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The Predictions: A Surprise Would be ... a Surprise
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2. (SBU) Polling data and the best guesses of observers
throughout Austria generally agree on what they expect to see
Sunday afternoon when vote numbers emerge. There are no
outriders predicting radically different results. The only
caveats concern the effect of rather lower participation than
usual, and the meaning of a relatively high number of
"undecideds." That said, predictions fall around the
following figures (with 2002 results in parentheses):

Austrian People's Party (OVP -- Conservative) -- 38-40
percent (2002 -- 42.3)
Social Democratic Party (SPO) -- 35-37 percent (2002 -- 36,5)
Freedom Party (FPO) -- 10-12 percent (2002 -- 10)
Greens -- 9-11 percent (2002 -- 9.5)
Alliance-Future-Austria (BZO) -- 2-4 percent (2002 -- did not
exist; FPO-splinter "Liberal Forum" polled 3 percent)
Hans-Peter Martin -- 2-4 percent (2002 -- did not exist)


3. (SBU) Voter participation could be as low as 75 percent
of registered voters, compared to the 2002 turnout of 84.2
percent. The reasons, analysts of all political stripes tell
us, are clear: overconfidence on the part of OVP voters and
disillusionment among SPO voters. Indeed, the OVP's abilitiy
to approach 40 percent may depend on its success in
convincing its faithful to spend part of a beautiful Fall
Sunday going to the polls.


4. (SBU) The latest polls show "undecideds" on the order of
10 to 15 percent of respondants. This may hide some protest
votes (who could break for the FPO or for Hans-Peter Martin).
However, an even greater share probably consists of SPO
sympathizers who have not yet decided whether they will turn
out at all. A significant share of that sub-set probably
involves committed union members who resent the SPO's
strategy of excluding union officials from the SPO candidate
list. (The SPO took this step in response to the scandal
involving the "Bank fuer Arbeit und Wirtschaft, A.G."
(BAWAG),an entity the Trade Union Federation (OGB) owned.)


5. (SBU) Double-digit expectations for the FPO are no
surprise. FPO strategy has focussed on the bottom fifth of
Austrian society who really do face competition from illegal
workers and foreign claimants to the government's social
welfare resources. The FPO does best in districts of Vienna
in which low-income Austrians and poor immigrants mix. The
major parties have had significant success in coopting the
FPO's calls for law and order and stricter enforcement of
immigration laws. It is important to note that the FPO's
overt anti-Muslim slogans have found no resonance with the
other parties. The FPO has not/not included anti-Semitic
elements in its campaign, although, as our contacts in the
Jewish community point out, the party's xenophobic campaign
(directed against recent immigrants) would probably tend to
draw support from anti-Semites.

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Last-Minute Strategies
--------------


6. (SBU) The last two weeks of the campaign saw some
relatively mild attempts at a "September surprise." The SPO
rolled out two allegations against OVP Chancellor Wolfgang
Schuessel. In one case, they tried to throw some BAWAG tar
at him by "revealing" that he had participated in a
conference in Bulgaria that BAWAG had sponsored. (The OVP
quickly countered with the argument that it was entirely
reasonable for the Chancellor to appear at an event under the
sponsorship of one of Austria's largest companies.) In
another case, the SPO charged Schuessel with having stood by
several years ago while his wife hired an illegal caregiver
for her father (who has since died). In the latter version
of "nannygate," it quickly emerged that this was common
practice, and that even the highly popular Federal President
and SPO leader, Heinz Fischer, had done so. The cry of "he's

VIENNA 00002924 002.4 OF 002


almost as bad as us" would not have turned the race around,
but it probably served to solidify the SPO base somewhat.


7. (SBU) For their part, the OVP has played the last two
weeks in a relatively low-key way. The party itself has left
the BAWAG issue to the OVP-affiliated trade union, but even
it has been remarkably silent on the issue. However, if
Schuessel is playing like a football team protecting a lead,
he is also playing like a coach who does not want to embarass
his opponent. In fact, Schuessel and SPO head Alfred
Gusenbauer apparently have a perfectly fine personal
relationship, and Schuessel knows that the chances are that
he and Gusenbauer will have to work together in the next
government.

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Match-Making
--------------


8. (SBU) On September 28, in the so-called "elephant round"
-- the televised debate among party leaders -- Schuessel
declared that he could form coalitions with the SPO, Greens
or BZO. He also explicitly ruled out a coalition with the
FPO. With the BZO (and Hans-Peter Martin) fading fast, and
the Greens apparently unable to draw much support beyond
their historic levels, the prospect of an OVP-SPO "Grand
Coalition" is the odds-on favorite. Under that scenario, the
SPO would join the government as the junior coalition
partner, probably laying claim to the Foreign Ministry and
other key ministries. If the SPO does as currently expected
-- 35 percent or better -- Gusenbauer would likely become
Vice Chancellor and Foreign Minister. If the SPO falls below
about 34 percent, chances are that Gusenbauer would have to
bow out.


9. (SBU) Coalition negotiations in Austria tend to take at
least a month, and have dragged on for as long as six months.
What is clear is that we will not wake up on October 2 with
a new government in place. Instead, the Federal President
will ask the leader of the party with the most votes --
probably Schuessel -- to begin talks to form a government.
Many of our contacts point out that if the SPO is the only
choice, the talks will probably take longer, as the SPO tries
to take its pound of flesh from Schuessel. The Austrian
public would probably start getting antsy if they hit the
Christmas break (December 22) without a government.


10. (SBU) There are alternatives, of course. The numbers
could work for an OVP-Green ("Black-Green") coalition (if the
Greens can agree among themselves to enter government under
terms Schuessel can accept). However, the Greens do not seem
to have added to their strength recently, and this is
therefore only a marginal possibility. For the same reason,
an SPO-Green ("Red-Green") coalition is even less likely. An
OVP-BZO coalition is practically impossible. Even if the BZO
entered parliament, chances are that its meager number of
seats would not help the OVP form a coalition. Numerically,
there remains the possibility of an OVP-FPO coalition.
Schuessel, as noted above, and all of his advisors have
categorically ruled this out. Of course, Austrians recall
that, before the 1999 election, Schuessel had stated
categorically that he would quit if he came in third -- and
instead, he formed a coalition with Joerg Haider's FPO. But
times and people change. In 1999, the FPO drew a majority of
its votes from people who were tired of Grand Coalitions,
which represented such a finely-tuned internal balance that
they could take no initiatives. In addition, the 1999 FPO
still included its "economic liberal" wing. That is one
reason the business community favored a coalition with the
FPO in 1999. But the FPO's liberal wing is now long gone.
Today, Schuessel could no longer justify a coalition with the
FPO.
McCaw