Links to the State Department’s website for background on the country’s political environment.

Austria is a stable democracy.  Historically, Austrian politics were dominated by grand coalitions formed by Austria’s two main centrist political parties (the center-left Social Democrats and the center-right People’s Party).  The system known as “proporz” dictated which party controlled which ministries, which bureaucracies, and which (state owned or controlled) businesses. This created a tightly-knit fabric of contacts and patronage that often resulted in politicized management decisions and frustration for those without the right party affiliation.  Austrian citizens’ perceptions of political deadlock, economic stagnation, and mismanagement of the refugee crisis contributed to increased anti-establishment sentiment in advance of the October 2017 parliamentary election, which ended the grand coalition and in December 2017 brought the center-right Peoples party (OeVP) into power. The conservative People’s Party, led by now former Chancellor Sebastian Kurz, entered into a coalition government with the right-populist Freedom Party (FPOe), with an agenda including pro-business  modernization and deregulation of the economy, jettisoning the “proporz” system, and controling migration.

On May 18, 2019, FPOe Vice-Chancellor Strache resigned after the release a day earlier of a video implicating him in a campaign-finance scandal linked to an alleged Russian oligarch.  That development triggered a call for snap elections and the eventual collapse of the governing OeVP (center-right)-FPOe coalition.  Subsequently, Chancellor Kurz (OeVP) and his interim cabinet lost a no-confidence vote in the Parliament on May 27, 2019.  President Van der Bellen appointed an interim Chancellor, former Constitutional Court President Brigitte Bierlein, to lead an interim government of mostly career technocrats through the next elections, scheduled for September 29, 2019.  The scandal captivated the Austrian public and likely contributed to a significant victory for Kurz’s OeVP in the European Parliament (EP) elections May 26, 2019.   Current polling shows the OeVP is likely to emerge with a plurality in the September voting.  Coalition negotiations could be difficult and lengthy.  In the run-up to the September elections, the interim government is expected to continue to carry out the day-to-day business of government but to refrain from any major expenditures or major policy decisions.

For additional background information on the political and economic environment of Austria, please click on the following link:

https://www.state.gov/countries-areas/austria/.
 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.