Another grand coalition

Last Sunday's general election in Austria has produced no clear winner, as no traditional coalition bloc won an absolute majority of seats, but the centre-left Social Democrats won the largest share of votes and seats and are therefore entitled to claim victory. Their leader, Alfred Gusenbauer, will almost certainly become chancellor.

The result was a clear defeat - surprisingly - for the People's Party led by Chancellor Wolfgang Schüssel, which saw its share of the popular vote plummet to 34.2 per cent, a massive drop of 8.1 per cent.

However, the Social Democrats did not increase their share of the popular vote since the last election; they in fact got one per cent less. An increase was registered in the combined strength of the right-wing parties, which was the real cause of the defeat of the People's Party. The Freedom Party increased its share of the vote to 11.2 per cent (from 10 per cent) and the Alliance for the Future of Austria, which did not exist in the 2002 election, got 4.2 per cent.

The Alliance was founded by Jörg Haider and other former leading members of the Freedom Party last year. It immediately joined in a coalition government with the Austrian People's Party, replacing the Freedom Party, and describes itself as "free from ideology, but forward-looking and conscious of traditional values". It could be described as a right-wing liberal/conservative party with a nationalist tinge, perhaps somewhat more moderate than the Freedom Party.

So the basic shift in the country's voting pattern was not from the People's Party to the Social Democrats, but from the People's Party towards the right-wing parties.

There was also a slight shift towards the Green Party, which increased its share from 9.5 per cent to 10.5 per cent. As the Social Democrats did not increase their share of the vote, they and the Greens do not have enough seats to govern together.

The People's Party, on the other hand, could govern with the two right-wing parties - together they have a parliamentary majority - however, it had ruled out joining forces with the Freedom Party, which has recently lurched further to the right. A grand coalition between the two mainstream parties is now almost inevitable.

Most observers say a shift to the right - which ironically led the way for a new government to be led by the centre-left party - was due to popular concern over immigration, especially from Muslim Turkey (Austria is the most sceptical EU member state regarding Turkey's EU bid). This swing took place despite the fact that Chancellor Schüssel last year held up Turkey's EU accession talks, in what was regarded as an electoral ploy. This tactic, therefore, backfired on the Chancellor as it gave the right more credibility on this issue.

Mr Schüssel certainly did not deserve to lose on economic policy. The country witnessed impressive economic growth and the government introduced labour market reforms, privatisation and corporate tax cuts. Generally speaking, the country's economy was performing well, which is why the outgoing government was expected to be re-elected. Mr Schüssel's government was criticised, however, for introducing university tuition fees and for not doing enough to narrow the gap between the rich and the less affluent sectors of society.

These two issues were often highlighted by the Social Democrats, yet the centre-left did not gain any votes and the swing vote went to the right-wing parties and slightly to the Greens. In any case, Mr Gusenbauer has said that he will do away with the previous government's plans for university tuition fees and will increase benefits for pensioners and the less well-off. He has also pledged to invest more heavily in education and to hire more teachers.

Mr Gusenbauer's plans will depend on the co-operation from his soon-to-be coalition partners, the People's Party. Furthermore, many observers believe that the Social Democrat leader acknowledges the success of the previous government's economic policies in stimulating growth and investment so any major economic changes are certainly not in the pipeline.

His major focus is bound to be more social justice and greater emphasis on education, while his European and foreign policy is expected to remain the same and in the hands of the People's Party.

Unlike Germany, Austria has had its fair share of grand coalitions in the past, so this latest one is nothing new for the country. In fact Austria has been ruled by grand coalitions between the Social Democrats and Christian Democrats (People's Party) for more that half its post-war history.

The last grand coalition collapsed in 1999 and consequently the People's Party joined a coalition with the Freedom Party after the subsequent election. This governing coalition was re-elected in 2002, although the Freedom Party saw its share of the vote drop.

What are the prospects of this new grand coalition? One of the reasons why the Freedom Party did so well in the 1999 election was that people in Austria were fed up with grand coalitions and the power exerted by the two main parties over the allocation of state jobs and other aspects of everyday life.

So we'll have to wait and see. One thing is for sure: the political climate in Austria has turned towards the right and this has influenced all the political parties.