Three weeks ago, the Austrian government celebrated the end of the bilateral political sanctions imposed by the country's European Union partners after the inclusion of the Freedom Party in the government coalition. The report prepared by the "three wise men"—Martti Ahtisaari, Jochen Frowein and Marcelino Oreja—concluded that the Austrian government "adheres to common European values" and therefore recommended an immediate end to the counterproductive sanctions.

Crucially, the "wise men" did not whitewash the Freedom Party (FPÖ). Jörg Haider's party is described as a "right-wing populist party with extremist ways."

Still, the end of Austria's isolation is undoubtedly a victory for Chancellor Wolfgang Schüssel and for the People's Party (ÖVP). According to several public opinion polls, the ÖVP, who had trailed behind the Social Democrats (SPÖ) and the FPÖ at last year's parliamentary elections, is today the most popular party.

Risky ventures

Has Schüssel's bet on an alliance with the FPÖ paid off now that the international community has (reluctantly) acknowledged the legitimacy of his government? On the one hand, the (provisional) answer to this question must be yes, especially if one takes into account the evidently growing tensions within the Freedom Party between government ministers such as Susanne Riess-Passer, Vice-Chancellor and Chairwoman of the Party, Finance Minister Karl-Heinz Grasser and Haider himself.

Haider, who has decided to stay in Klagenfurt as governor of the Land of Carinthia, has left FPÖ ministers in Vienna with a chance to make their mark on federal institutions and challenge him within the party. The "wise men" explicitly (and shrewdly) acknowledge in their report the contrast between the populist behaviour of certain members of the FPÖ (read Haider) and the moderation and professional competence of other FPÖ ministers. Interestingly, Ahtisaari, Frowein and Oreja make one exception to their positive assessment of FPÖ ministers, for Justice minister Dieter Böhmdorfer, a close friend of Haider.

Upcoming budget plans

What remains, for the moment, merely a Cold War between ambitious politicians has already been reflected in Grasser's policies. The Finance Minister's first budget speech (due on 18 October) is expected to be something of a revolution in a country still marked by the so-called Austro-Keynesianism of the Kreisky era. Grasser has a big idea: Nulldefizit (zero deficit). According to his plans, Austria should balance the budget by 2002 and could introduce some form of flat tax in 2003.

This neo-liberal economic policy, enhanced by tax increases, however, does not sit well with the claims of the FPÖ to be the workers' party and the only political force which supports the "little people." As Reinhard Christl and Liselotte Palme put it in Profil, the Freedom Party might have to "choose between Grasser and Haider"—to the delight of Schüssel and the ÖVP.

The trouble with tuition

Yet, the end of the sanctions has brought new problems for the government. On the social front, the trade unions have made clear their discontent with austerity policies. Perhaps even more troubling for the coalition is the decision to introduce tuition fees of ATS 10,000 annually (USD 640) for university education, which has sent students into the streets.

On the political front, the Social-Democrats have started to nuance their absolute opposition to the prospect of entering into a coalition with the FPÖ. The former Interior Minister, Karl Schögl, who has long preached a pragmatic attitude to the FPÖ, looks less and less like a lonely voice.

The Party Chairman, Alfred Gusenbauer, even seemed to allude in a recent interview to the possibility of political cooperation between the SPÖ and the FPÖ: "Given its current character, the FPÖ is no partner for the SPÖ. I realise, however, that certain personalities within the party have the intention of establishing a normal democratic party."

Were the FPÖ to become an "acceptable" coalition partner for the Social-Democrats, the People's Party could lose its central position held since 1986 as the party without whom coalitions could not be made.

Lessons of the sanctions

The sanctions against Austria had the advantage of showing that the European Union is concerned about the possibility of the re-emergence of far right-wing and xenophobic movements in its member states. Yet, the EU emerges as the big loser from the crisis. Small EU states have often more or less openly sympathised with powerless Austria, bullied by the big guns, in this case Germany and especially France.

The sanctions have fuelled Euro-scepticism in Austria and in other states, worried about losing their sovereignty. Putting an end to the crisis before the Danish referendum on the euro was, therefore, seen by many in Brussels as an absolute priority. It is, however, for EU enlargement that the sanctions could prove most problematic for three main reasons.

First of all, the experience is unlikely to render the already traditionally sceptical Austrians more open toward their Central European neighbours. EU enlargement provoked the first clash in August between the ÖVP and the FPÖ when the FPÖ demanded (and failed to obtain) the resignation of Erhard Busek, the government adviser on enlargement and a convinced supporter of the process. Schüssel and his foreign minister, Benita Ferrero-Waldner, have so far managed to restrain the sceptical tendencies of the FPÖ politicians.

The FPÖ are prepared to insist upon a referendum on enlargement and, furthermore, argue that the closure of the Temelín nuclear plant and the abrogation of the Beneš decrees should be prerequisites to the Czech Republic's accession. A survey published by Profil shows that the Austrian population remains unsure about the benefits and costs of enlargement—45 percent expect positive consequences and 44 percent, negative.

Second, the sanctions have led to a reassessment of the perceptions of the EU in the Central European candidate states, where there is a genuine potential for the emergence of FPÖ look-alikes. (for more on this, see Andrew Stroehlein's article this week, "The Danish Lesson")

Finally, the European Union will have to think carefully about how to deal with the "new" far-right in the future. The "wise men" suggested that the EU summit in Nice adopt a modification of articles 6 and 7 of the Treaties—a task which has been prepared by EU commissioner Michel Barnier.

In an interview for Format, the chairman of the European Commission, Romano Prodi, illustrated the dilemmas of the EU:

I believe-and this is important for the future—that we will see in an enlarged Europe many cases of... problematic election results, but we must respect these elections. And even if we can be concerned—and I am very concerned about the far right movements in Europe—I still believe that we must respect elections, as long as there is no breach of the democratic rules.

The question still remains: will the far right—today in Austria, tomorrow perhaps in the Czech Republic, Hungary or Slovenia—gain respectability in Europe?

Magali Perrault, 2 October 2000

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• Archive of Magali Perrault's articles in CER
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Sources:

Reinhard Christl and Liselotte Palme, "Grassers Plan," Profil, 17 July 2000

Interview with Alfred Gusenbauer, "Das ist kein Persilschein", Format, 18 September 2000

Otmar Lahodynsky, "Mit Tempo auf die Bremse," Profil, 25 September 2000

Interview with Romano Prodi, "Europa muss das aushalten," Format, 11 September 2000