After more than five months of political negotiations, Austria has a new government, Bloomberg reports.
Led by Chancellor Christian Stocker of the People’s Party, the coalition includes the Social Democrats and the liberal NEOS as junior partners. The new government aims to address Austria’s economic recession, reduce the budget deficit, and counter the rise of right-wing populism.
President Van der Bellen emphasized the need for economic stability and social cohesion, urging the coalition to prioritize these issues. He highlighted Austria’s tradition of consensual rule, noting that the Freedom Party’s inability to compromise on its policies prevented them from forming a government last month.
The new coalition faces significant challenges, including an economy grappling with rising political uncertainty. The President noted the parties have overcome their reservations for the good of the country.
Christian Stocker, 64, unexpectedly became Chancellor after replacing Karl Nehammer as People’s Party leader in January to resolve a negotiation impasse. His immediate priority is implementing a €6.3 billion ($6.6 billion) budget savings program to reduce the deficit to the EU’s 3% of GDP limit. The plan includes tapering public payments and increasing bank taxes.
Markus Marterbauer of the Social Democrats, formerly the top economist at the Chamber of Labour, has been appointed Finance Minister to lead the economic recovery efforts. His expertise lies in post-Keynesian economics and income distribution. Recent data from Statistik Austria indicates a continued economic downturn, with output declining by 0.4% in the fourth quarter of 2024, marking the eighth consecutive quarter of contraction.
Beate Meinl-Reisinger, the leader of NEOS, will take on the role of Foreign Minister.
The coalition’s agenda also includes re-establishing Austria’s role in a complex global landscape. Austria’s long-standing neutrality, unique among continental EU members, enjoys broad public support. The government has committed to purchasing new fighter jets and increasing defense spending to 2% of GDP by 2032.
