Austrian coalition agreed after two Haider nominees dropped

Members of Austria's far-right Freedom Party will be sworn in as ministers in a new government this morning despite the threat…

Members of Austria's far-right Freedom Party will be sworn in as ministers in a new government this morning despite the threat of isolation from Vienna's 14 European Union partners, the United States and Israel.

President Thomas Klestil approved the formation of a coalition between the conservative People's Party and the Freedom Party after the far-right leader, Mr Jorg Haider, agreed to drop two prospective ministers the President found unacceptable.

Thousands of people poured on to the streets of central Vienna last night to protest against the new government, which will be led by the conservative leader, Mr Wolfgang Schussel. Many carried placards proclaiming "Haider is a fascist" as they attempted to march on the Freedom Party headquarters.

Mr Haider will not join the cabinet if the President approves the coalition but will remain as governor of his home province of Carinthia.

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In an attempt to calm international fears about their prospective coalition, the two party leaders yesterday signed a declaration entitled Responsibility for Austria - a future in the heart of Europe, pledging to uphold human rights and European values. "The Federal Government reaffirms its unswerving adherence to the spiritual and moral values which are the common heritage of the peoples of Europe and the true source of individual freedom, political liberty and the rule of law, principles which form the basis of all genuine democracy. The Federal Government works for an Austria in which xenophobia, anti-Semitism and racism have no place," the declaration says.

Despite Mr Haider's notorious record of praise for Hitler and the Waffen SS, the declaration pledges the new government to undertake a self-critical scrutiny of Austria's role in the crimes of the Nazis.

"Austria accepts her responsibility arising out of the tragic history of the 20th century and the horrendous crimes of the National Socialist regime. Our country is facing up to the light and dark sides of its past and to the deeds of all Austrians, good and evil, as its responsibility. Nationalism, dictatorship and intolerance brought war, xenophobia, bondage, racism and mass murder. The singularity of the crimes of the Holocaust, which are without precedent in history, are an exhortation to permanent alertness against all forms of dictatorship and totalitarianism," it says.

The programme for government agreed between the two parties reaffirms Austria's commitment to the EU, the euro and enlarging the EU to include some formerly communist countries in central and eastern Europe.

But Austria will demand that each new member-state passes strict economic, constitutional and environmental tests before being admitted and will press for a long transitional period before citizens of the new memberstates are entitled to live and work elsewhere in the EU.

The programme casts doubt on the future of Austria's military neutrality and opens the door to future membership of NATO. The new government will press for "comprehensive institutional links and effective co-operation between the EU and NATO" and will seek a stronger voice in all EU security decisions.

The new government wants to cut government spending, increase the retirement age and liberalise the labour market, measures that will put it on a collision course with Austria's powerful trade union movement. Tough new laws on immigration will require foreigners to live in Austria for at least 10 years before applying for citizenship and to prove they can speak German fluently before becoming citizens.

Immigrant casual workers, without whom Austria's tourist industry could not function, will be sent home as soon as they are no longer needed and the proportion of foreign-born children in each school class will be limited to 33 per cent.

The programme for government and the two leaders' declaration on human rights are unlikely to reassure Austria's EU partners, who yesterday repeated their opposition to Mr Haider's party entering government.

Reuters adds:

The Vatican said it would not rush to judge Mr Haider but would wait to see the programme of government. "The Holy See's great tradition is very realistic - one should never be premature," Cardinal Angelo Sodano, the Vatican's Secretary of State, said.

Iran's state television accused Israel of leading a poisonous campaign against Mr Haider, saying attempts to keep his party out of power threatened democracy.