Friction in Austrian Coalition

UNCLAS VIENNA 002718

SIPDIS

SIPDIS

STATE FOR EUR/AGS

E.O. 12958: N/A
TAGS: PGOV AU
SUBJECT: Friction in Austrian Coalition


Summary
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1. The coalition Social Democratic (SPO) and People's (OVP) parties
appear to be in a deadlock over major reform projects. This,
coupled with incessant sniping between Minsiters, has triggered
substantial criticism by the media and the opposition parties of the
coalition government's ability to cooperate efficiently. There has
also been some speculation on the possibility of early elections,
which are, however, highly unlikely. End Summary.

Reform Blockade
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2. The coalition between the Social Democrat Party (SPO) and its
junior partner People's Party (OVP) is currently going through tough
negotiations on several important reforms promised in the government
progranm adopted when the coalition was formed.

A) On school reform, the SPO wants to introduce pilot comprehensive
schools for 10-14 year olds. The OVP wants to add conditions that
would protect the current dual system of compulsory junior high
school ending at the age of 14 for some, and higher-education
grammar school for students from 10-18 years.

B) Smoking regulations, though both parties agree on tightening
non-smoking regulations slightly, is also proving unmanageable.
Health Minister Andrea Kdolsky (OVP) wants to grant smaller food
service businesses the option of operating either as a smoking or
non-smoking facility; the SPO argues that this would violate equal
treatment principles.

C) The partners also disagree on extending the early retirement
option for persons with long pension insurance periods (minimum 40
years) to retire early. Social Affairs Minister Erwin Buchinger
(SPO) is pushing for the extension, which is favored by traditional
SPO core constituencies such as blue-collar workers. The OVP,
however, argues there is no need for the extension.

D) The Constitutional Court's decision to declare the inheritance
tax unconstitutional has led to a fight between SPO and OVP over how
to close the resulting hole in the budget. The SPO favors a
reformed law, the OVP rejects that. In conjuction with this,
another reform - abolition of the gift tax - is also pending.

And No Love Lost
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3. The SPO-OVP coalition was, from the very beginning, a marriage
of necessity. With no other numerically and politically feasible
alternative, SPO and OVP agreed on a coalition after lengthy
government formation talks in which the OVP, following its election
defeat, got major concessions from the SPO in the distribution of
portfolios as well as substantive issues. The two parties' struggle
for "peaceful coexistence" in the coalition is reflected in the
current dispute. However, the controversy is also attributable to
the fact that the two parties see the need to demonstrate profile
vis-`-vis each other.


4. Chancellor (and SPO Chairman) Gusenbauer and Vice-Chancellor
(and OVP Chairman) Molterer have stayed away from the bickering
between coalition representatives, hoping to project a statesmanlike
image. Gusenbauer, however, frequently seeks to steal the spotlight
from Foreign Minister Plassnik (OVP) on foreign policy, most
recently in their trip to the UN General Assembly in New York.
Plassnik has also clashed with the SPO Defense Minsiter. Recent
weeks have also seen a conflict between the Justice (SPO) and
Interior (OVP) ministries over counter-terrorism measures.

Comment
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5. Despite their rocky relationship, SPO and OVP are not very likely
to trigger early elections, since the Austrian public traditionally
disapproves of the interruption of government work by parties
seeking their fate in early elections. Rather, they will continue
their messy effort at balancing satisfying their constituencies and
blowing their own horns on the on hand and moving on the coalition's
agenda on the other. End Comment.

KILNER