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Austrian coalition talks collapse

VIENNA: Austria's acting Chancellor Viktor Klima said on Friday he had abandoned efforts to form a new coalition with the conservative People's Party and would try instead to win backing for a minority government.

But both the People's Party and the far-right Freedom Party said they would not tolerate a minority administration, raising the possibility of either early new elections or a coalition between the Freedom Party and the conservatives.

The collapse of the talks followed months of bitter wrangling after an inconclusive election in October in which Joerg Haider's Freedom Party, campaigning against immigration, surged into second place behind the Social Democrats.

A coalition with the conservatives would offer Haider -- best known abroad for remarks which appeared to play down the crimes of the Nazis -- a taste of national power after 13 years during which he has been treated as a pariah by mainstream politicians.

Austrian President Thomas Klestil has already made clear he is opposed to the idea of a People's Party-Freedom Party coalition because he fears it would damage Austria's image abroad.

The two mainstream parties, which ruled together for 13 years, had agreed a new government programme earlier in the week.

But People's Party leader Wolfgang Schuessel attempted to extract a high price for his support, demanding that Klima hand over the finance ministry -- a Social Democratic bastion for most of the post-war period.

He also insisted that trade union leaders, a powerful force in the Social Democratic party and in parliament, should sign the coalition pact despite their objections to plans to raise the minimum retirement age by two years.

"The presidium of the Social Democratic party has decided to reject the demands of the Austrian People's Party and has authorised me to propose to the president that we form a minority government, consisting of members of the Social Democratic party and experts who do not belong to any party," Klima told reporters.

Klima said the decision to end the negotiations had been an emotional one for him but he had gone to the absolute limit in trying to accommodate conservative demands.

He said he suspected that the People's Party did not really want a coalition because it repeatedly made demands which it knew were unacceptable. "Cooperation on a basis of trust is not possible," Klima said.

The prospects for a minority government looked slim after the other parties said they would not accept it.

"If we didn't manage to achieve a result together with the Social Democrats, then it would not make much sense for the People's Party to support a Social Democratic minority government," People's Party General Secretary Maria Rauch-Kallat told ORF radio.

Freedom Party parliamentary leader Susanne Riess-Passer said Klima could not expect tacit backing from her party either

"Austria needs a stable government with a majority," she said. "There are various possibilities for building a majority in parliament but a minority government is certainly not the solution for this country."

The Austrian head of state now faces a dilemma.

Despite Klestil's distaste for a People's Party-Freedom Party coalition, that grouping would command a comfortable majority in parliament -- 104 seats out of 183. Each won 52 seats while the Social Democrats have 65 and the Greens 14.

Some constitutional experts question whether the president can authorise a minority government without first asking Haider as leader of the second-largest party -- it beat the People's Party by just 415 votes -- to see if he can succeed where Klima failed.-Reuters