AUSTRIAN MEDIA HIGHLIGHTS: October 04, 2006

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SUBJECT: AUSTRIAN MEDIA HIGHLIGHTS: October 04, 2006


Coalition Negotiations to Start Soon


1. Negotiations for a new Austrian government start next Tuesday.
All Austrian media expect a difficult and drawn out struggle between
the country's two major parties, the SPOe and the OeVP, given their
disagreement in a number of key political issues.
Mass-circulation daily Kurier sees a "deep rift" between the Social
Democrats and the Conservatives, and writes that the OeVP has little
interest in forming a coalition with the SPOe. Given the massive
distrust between the two parties, a new Austrian government is still
a long way off, the daily believes. Newly established daily
Oesterreich meanwhile suggests the OeVP has threatened to go in
opposition: This could be a tactical move in order to keep key
ministries in the Conservatives' hands and push trough top political
objectives. Mass-circulation tabloid Kronen Zeitung lists seven SPOe
demands, certain to be dismissed by the OeVP, as the key obstacles
on the path to establishing a grand coalition: the cancellation of
the controversial Eurofighter purchase; the cancellation of
university fees; the introduction of comprehensive schools; no
pension cuts for persons who have worked for 45 years, independent
of their retirement age; the introduction of a so-called "basic
security" social welfare income of 800 Euros; and immediate tax cuts
while maintaining inheritance and gift taxes.


SPOe Package


2. Austrian media list the SPOe's key government projects, speculate
which issues could be realized in a grand coalition, and what the
potential glitches are.
Like mass-circulation tabloid Kronen Zeitung, mass-circulation
provincial daily Kleine Zeitung lists the top issues on the SPOe's
political agenda and their chances of implementation. The
cancellation of the Euofighter deal has hardly any chance to go
through, as do the cancellation of university fees or the
introduction of an 800-Euro basic security payment. The creation of
comprehensive schools is also not very likely, the daily says. The
outlook is much better when it comes to raising caps on healthcare
insurance payments and to introducing more flexible child allowances
models.
Liberal daily Der Standard meanwhile suggests the FPOe might be
willing to support the SPOe and the Greens in their plan to topple
the Eurofighter purchase.


AUA Set to Cut Jobs


3. Talks between the Austrian Airlines (AUA) management and the
unions broke down on Tuesday after AUA announced plans to cut up to
350 jobs. AUA board chairperson Alfred Oetsch said management broke
off negotiations because the unions were inflexible on implementing
reforms Oetsch believes are vital for the airline.
Semi-official daily Wiener Zeitung quotes Oetsch as saying cuts were
most likely to come from cabin crews as well as from AUA offices in
Asia and Australia. The cutbacks are also said to affect about 80
pilots. The AUA board chair added that AUA would continue its
participation in Lufthansa's Star Alliance cooperation system,
despite rumors earlier this week that AUA was planning to quit Star
Alliance in favor of a partnership deal with Air France. Austrian
Airlines has been hard hit financially by a drop in air travel and
rising fuel prices, which necessitate reforms aimed at getting the
carrier out of the red, the daily says.


Passenger Data: New Talks


4. There will be a new round of talks between the US and the EU
regarding the transfer of airline passenger data to US authorities.
The European Union wants to reach a common position on the issue
this week.
According to ORF online news, the EU Commission said earlier this
week that a new agreement with the US prior to the expiration of the
2004 data transfer deal had failed because the EU delegation refused
to back US proposals without first consulting with EU top political
level representatives. Both sides are discussing a new agreement on
passenger data transfer, following a May 2006 ruling by the European
Court of Justice labeling the 2004 accord unlawful. ORF online news
notes that the Court's decision means the European Parliament had
been "shooting itself in the foot:" Instead of greater data
protection, as desired by the MEPs, the Court had merely ruled the
participation of Parliament illegitimate, and had therefore called
for an agreement on a new legal basis.

Gusenbauer and the US


5. An Austrian Washington correspondent reports on US reactions to
the SPOe's election victory, and suggests the Social Democrats'
chairperson Alfred Gusenbauer is considered a "good man and a
friend" of the US in Washington.
This was the statement from the US State Department, says Washington
correspondent for mass-circulation tabloid Kronen Zeitung Hans
Janitschek. In addition, Washington is not ruling out a short trip
by Gusenbauer to the United States, perhaps even before the
formation of a new government and his likely inauguration as
Austria's next chancellor, Janitschek continues. Gusenbauer has been
to the United Stats on several occasions, and is "naturally" seen to
have close ties with US Democrats. He is a friend of former US
President Bill Clinton and Senator Hillary Clinton, Janitschek
writes.



Concern over North Korea


6. The United States has issued a strong warning to North Korea over
its announcement that it will conduct a nuclear test. Similarly, UN
Secretary General Kofi Annan has voiced his concern over Pyongyang's

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activities. North Korea, however, says sanctions and threats from
the US had compelled it to act in the first place.
ORF radio early morning news Morgenjournal quotes a North Korean
diplomat as saying the "calls of a threat of a nuclear war,
sanctions and pressure by the United States compel us to conduct a
nuclear test." South Korea, Russia and Japan have meanwhile joined
the US in condemning the test. A South Korean Foreign Ministry
spokesperson stressed that Pyongyang's move "poses a great challenge
to peace and stability in the region," but added that Seoul had its
own "action plan in response" to South Korea's nuclear test. In
addition, China has appealed to Pyongyang to calm tensions in the
region.


UNSC Likely to Seek Iran Sanctions


7. In the conflict over Iran's nuclear program, the United States
has called on the Europeans to conclude negotiations with Tehran by
the end of this week. The UN Security Council is expected to start
focusing on sanctions against Iran next week. Tehran has already
ruled out the suspension of its nuclear program.
According to ORF radio early morning news Morgenjournal, the EU's
talks with Iran on its nuclear program seem to have failed. A report
by EU foreign policy chief Javier Solana says Iran is not prepared
to resume suspension of its uranium enrichment program as required
by the Security Council. Solana is scheduled to speak by phone to
Tehran's chief nuclear negotiator Ali Larijani today.


Media Commentaries on North Korea and Iran


8. Many Austrian foreign affairs writers comment on the most recent
developments in North Korea and Iran, and agree the two countries'
nuclear ambitions pose a dual threat and could shift the balance
both in the Middle and the Far East.
Deputy chief editor for independent provincial daily Salzburger
Nachrichten Viktor Hermann says if North Korea "actually succeeds in
testing a nuclear bomb, the balance will shift - and not just in the
Far East," and the "'axis of evil' would have one more evil member.
The only thing that would be even worse would be if Iran, too,
succeeded in enriching uranium and producing and testing nuclear
weapons of its own. In that case the containment policy pursued by
the US, the EU, and the UN would have failed completely - and the
world would have become a great deal less secure."

Commentator for newly established daily Oesterreich Patrik Volf
writes that the "second front in the nuclear conflict, after Iran,
was already almost forgotten until North Korea's Kim Jong-Il
reminded people of his existence by announcing a nuclear weapons
test. US President Bush's announcement of his intention to keep open
the option of a preventive strike against other states has fueled
the nuclear arms race. After all, those who have the bomb are
treated with more respect on the international diplomatic scene. But
the price to be paid by North Korea, Iran, and also Pakistan is
tremendously high. The costs of the nuclear program, and the
economic sanctions, are pushing the population in these countries
into poverty. North Korea's government remains a military threat and
an issue in international diplomacy at the cost of its own
population."

Foreign affairs editor for mass-circulation daily Kurier Livia
Klingl comments: "What does North Korea want? The experts' answer is
usually: Attention. That can be gained by testing nuclear bombs.
Attention in the form of worldwide headlines and statements from
enraged diplomats and politicians - but not the kind of attention
which a starving country needs, namely assistance of any kind, and
especially that which goes beyond mere emergency measures."


Rice on Mideast Trip


9. US Secretary of State Condoleezza Rice is holding talks in Cairo
today with Egyptian President Hosni Mubarak before meeting
Palestinian President Mahmoud Abbas. She has called on Islamic
militants to cooperate with the Palestinian leader, ORF online news
writes.
McCaw