Alex Blackburn | 7 October 2024

Summary

• The Freedom Party of Austria (FPÖ) secured 29.2% in Austria's recent election, marking the highest support for a far-right party since the Nazi era, while the ruling Austria’s People Party (ÖVP) received 26.5%.

• FPÖ leader Herbert Kickl capitalised on public discontent over immigration and inflation, but coalition negotiations are critical, with the ÖVP opposing a Kickl-led government.

• FPÖ's rise could shift Austria's foreign policy, challenging European Union (EU) cooperation due to Euroskeptic and pro-Russia stances, particularly regarding sanctions and migration.

All 183 seats of Austria’s National Council (Nationalrat) were contested in the recent elections, with the far-right Freedom Party of Austria (FPÖ) led by Herbert Kickl securing 29.2% of the vote, marking a historic achievement as the highest support for a far-right party in Austria since the Nazi era. The centre-right Austrian People's Party (ÖVP), led by Chancellor Karl Nehammer, came second with 26.5% of the vote, while the Social Democrats (SPÖ) suffered their worst defeat, obtaining just 21%.

Country Profile

Economy

• GDP: USD 500 billion (2023)

• GDP per capita: USD 56,320 (2023)

• HDI: 0.922 (2021)

• Official currency: Euro (€)

Demography

• Population: 9.13 million (2023)

• Ethnic composition (2018)

  •  80.8% Austrians

• Religion (2021)

  • 55.2% Catholic, 13% other Christians

  • 22.4% No religion

  • 8.3% Muslim

Electoral System

• Austria’s National Council has 183 seats which are elected for five-year terms.

• The election follows a proportional representation system, where parties must secure at least 4% of the national vote to enter parliament.

• The National Council is responsible for passing legislation, approving the budget, and overseeing the government.

Major Political Parties & Candidates

• Freedom Party of Austria (FPÖ)

  • Secured 29.2% (57 seats) of the vote, up from 16% (31 seats) in the last election.

  • A far-right, nationalist party that opposes immigration, EU sanctions on Russia, and promotes “remigration” policies to deport those who do not integrate into Austrian society.

  • Currently led by Herbert Kickl, who served as Interior Minister and capitalised on public discontent over economic and immigration issues.

• Austrian People's Party (ÖVP)

  • Received 26.5% (51 seats) of the vote, down from its previous 37.5% (71 seats).

  • The centre-right party led by Karl Nehammer, advocated for market-friendly economic policies and EU integration while taking a hard stance on immigration and security issues.

  • The party has governed Austria in coalition with the Greens since 2020 but has lost significant public support.

• Social Democratic Party of Austria (SPÖ)

  • Secured 21% (41 seats) of the vote, suffering a significant loss from its previous 26% (52 seats).

  • The centre-left party traditionally focused on welfare, workers’ rights, and environmental policy, is currently led by Andreas Babler.

The FPÖ’s significant victory has given Kickl a stronger mandate to push forward his nationalist agenda, which focuses on reducing immigration, opposing EU sanctions on Russia, and addressing economic grievances such as inflation. However, the lack of an outright majority means that coalition negotiations will be critical. Despite FPÖ’s electoral success, Nehammer has ruled out a coalition government led by Kickl, setting the stage for complicated talks and potential political gridlock.

Kickl’s rise has sparked concerns over the direction of Austria’s foreign policy, as FPÖ advocates for distancing the country from EU influence and softening its stance on Russia, potentially reshaping Austria’s position on the European stage. FPÖ's resurgence underscores growing dissatisfaction with Austria’s handling of immigration and economic challenges. ÖVP, once a dominant force under former Chancellor Sebastian Kurz, now faces internal strife and diminished public support. SPÖ’s significant losses reflect the party's failure to reconnect with voters on economic and social issues.

Kickl’s nationalist rhetoric has propelled FPÖ into a dominant position, but without a coalition partner, his path to forming a government is fraught with obstacles. ÖVP has left the door open to a potential coalition, but Nehammer’s opposition to a Kickl-led government complicates the negotiations. The most likely scenarios include either a coalition without Kickl as chancellor or a fragile, centrist government formed by ÖVP with smaller parties like the Greens or the liberal Neos.

Austria's political centre has weakened, and the country now faces an uncertain future where far-right policies could shape its domestic and international direction. Should FPÖ enter government, Austria may adopt a more obstructionist stance within the EU, particularly on migration and relations with Russia. This shift could strain Austria's ties with its European allies and position the country closer to populist and nationalist movements in Italy, Hungary, and Poland.

Forecast

• Short-term

  • Coalition talks are expected to be prolonged, with Kickl pushing to become chancellor. However, the ÖVP’s opposition could force the FPÖ to either compromise on leadership or risk being left out of the government. Prolonged coalition talks could create uncertainty for businesses, affecting decision-making and delaying investments, as the political landscape remains unstable.

• Long-term

  • If FPÖ does enter government, Austria could see major shifts in its foreign policy, particularly in its relations with the EU and Russia. Increased immigration restrictions and anti-EU policies could put Austria at odds with Brussels. Potential shifts in foreign policy - such as distancing from the EU or closer ties with Russia - could disrupt trade relations, affecting businesses that rely on European markets or sanctions compliance. Increased immigration restrictions might also impact labour availability, especially for industries dependent on foreign workers.