Austria’s Kurz Goes for Broke Hoping to Take Populist Votes

Boris Groendahl
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Austria’s Kurz Goes for Broke Hoping to Take Populist Votes

(Bloomberg) -- Austrian Chancellor Sebastian Kurz is going for broke.

Hours after his nationalist deputy resigned over a video showing him promising government contracts for campaign funds, Kurz dumped his far-right partner and began campaigning for early elections. Europe’s youngest leader, who gained four percentage points and now stands at 38% support in the latest poll, could rule unencumbered if he manages to extend his lead and win in a landslide.

But that’s a big if. On Monday, Kurz continued to wrestle with the fallout of the scandal, which prompted him to declare the Freedom Party unfit to govern even as he praised policies he’d put in place with its support over the last 17 months.

“I’ll do everything possible to maintain stability,” he told journalists in Vienna on Monday without taking questions. “The goal is to strengthen the People’s Party without being hemmed in.”

Austrians who like the turn the country has taken would have to vote for him, he said in a televised address witnessed by almost quarter of the population on Saturday evening.

“Kurz is effectively betting on a collapse of the Freedom Party,” said Carsten Nickel, an analyst at advisory Teneo. “That is extremely risky in a country where the far-right has systematically established itself for decades.”

The first poll after the collapse of Austria’s government has the Freedom Party falling 5 percentage points to 18%. The opposition Social Democrats and Neos party inched up, while Kurz’s People’s Party got a 4 percentage-point boost.

The move to want to govern without a partner builds on Kurz’s conviction, borne out by opinion polls before the video scandal erupted this weekend, that his tough stance on immigration, tax cuts and benefits for Austrian families remain popular with voters even if they are appalled by the scandal-ridden Freedom Party. He also made it clear that he doesn’t see a way to continue this program with the second-biggest party, the Social Democrats that were his People’s Party’s partner in most coalitions since 1945.

Kurz cited other Freedom Party scandals, including its links to far-right groups as well as racist slogans and poems that he’d “swallowed” to keep the government intact until now.

“I want to work for our beautiful country, with the support of a majority of the people but without incidents, accidents and scandals,” Kurz said. “I don’t think I can do that with anybody else right now.”

It’s a big gamble for Kurz, 32, who rode to power in 2017 on a hard-line immigration platform that stoked conflict with German Chancellor Angela Merkel and marked him as a rising young conservative despite Austria’s relatively small size.

A first test of Kurz’s strategy will come in six days at European elections that now have become unpredictable. The real proof will be the early election likely to happen in September, as President Van der Bellen said after meeting Kurz on Sunday.

Austria’s opposition parties -- encouraged by protests in Vienna on Saturday -- are trying to put the blame for the situation on Kurz.

“He was responsible for bringing the Freedom Party into government,” said Pamela Rendi-Wagner, head of the Social Democrats. “It’s his project that’s plunged Austria into this political chaos and put stability at risk.”

The collapse of the Austrian coalition is a massive defeat for one of Europe’s most successful populist parties, a week before European Parliament elections in which nationalists from the U.K. to Poland want to strike a blow against the establishment. It’s also a sign of Europe’s political fragility as the decline of many mainstream parties makes coalition governments more unstable.

While the European Commission “followed in disbelief” as the scandal unfolded, it has “full trust” that Austrians can recover, spokesman Margaritis Schinas said Monday in Brussels.

“Kurz didn’t tame the populist right, rather they shot themselves in the foot, as they have always done in the past,” said Thomas Hofer, a political analyst and consultant in Vienna. “It’s a setback for his project that this government fails after less than two years.”

It’s “illusory” for Kurz to think he can win a majority of seats, because the Freedom Party constituency may remain more stable than expected, Hofer said.

Strache himself laid out in his resignation speech the strategy to neutralize the embarrassing video, suggesting there were “foreign intelligence services” behind it and saying “this was a targeted attempt of political assassination, this was hired work.”

Kurz wants to continue governing until the election but hasn’t said with which team. On Monday afternoon, he’s due meet with Interior Minister Herbert Kickl, who may be asked to leave office because investigations into the Freedom Party’s finances triggered by the video will involve Kickl personally. The remaining Freedom Party’s ministers said on Sunday they will all resign in solidarity if that happens.

It’s also unclear what happens with the coalition’s unfinished business, including tax cuts and a revamp of banking supervision and the central bank that haven’t passed parliament yet.

(Adds Kurz in the fourth paragraph, poll in the seventh and EU in the 17th paragraph.)

--With assistance from Jonathan Tirone.

To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, ;Flavia Krause-Jackson at fjackson@bloomberg.net, Zoe Schneeweiss, Tony Czuczka

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