Austrians look set to return Schüssel

AUSTRIA: Austria's chancellor Wolfgang Schüssel is likely to be returned to office when voters go to the polls tomorrow, though…

AUSTRIA: Austria's chancellor Wolfgang Schüssel is likely to be returned to office when voters go to the polls tomorrow, though he cannot be sure what kind of government he will lead.

With 15 per cent of the country's six million voters still undecided, the only near certainty is that Mr Schüssel will no longer have to share power with the extremist parties that brought Austria into the headlines for all the wrong reasons.

The two large parties - Mr Schüssel's People's Party (ÖVP) and the Social Democrats (SPÖ) - tried and failed to distinguish themselves to voters in a lacklustre campaign dominated by immigration and welfare.

As a result, voters may force them into a grand coalition, mirroring the situation in neighbouring Germany and returning Austria to its post-war power-sharing consensus.

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The SPÖ has closed the gap with Mr Schüssel's party to just 3 per cent, but its hopes of emerging as the strongest party were dashed by a scandal involving a union-owned bank with connections to the party.

The scandal eventually rebounded, tainting finance minister Karl-Heinz Grasser and even Mr Schüssel. The Austrian leader is anxious to avoid sharing office with the SPÖ and socialist leader Alfred Gusenbauer has made clear the feeling is mutual. He has vowed to halt Mr Schüssel's market-friendly politics, close tax loopholes and halt the sale of remaining state enterprises.

But the minor differences between the two parties are outweighed by similarities on fiscal and foreign policy, in particular their joint opposition to Turkey's EU accession.

"Measured on its promises, the coalition has failed but measured in comparison to other countries, Schüssel and his team have done good work," stated Profil magazine.

"The finance minister fell short of the holy grail of a zero deficit but borrowing is under control. State pensions are still not secure but the financing of the system has been secured."

The government leaves behind a good economic record: unemployment is under 5 per cent, growth is almost 3 per cent while rising exports and thriving trade with new EU members on its borders have made Austria the third richest country in the EU.

On TV, government ministers like to whip out recent well-thumbed copies of Germany's Stern magazine that described its smaller neighbour as the "better republic".

But there is frustration inside Austria: unemployment has risen a quarter on Mr Schüssel's watch, low earners hit by budget austerity measures and welfare reform are angry at corporate tax cuts while fear of low-cost workers to the east is widespread.

That gave a focus to the campaigns of the two extremist parties, in particular the Alliance for the Future of Austria, the current junior coalition partner formed by Jörg Haider after his split with the Freedom Party in 2005.

Alliance leader Peter Westenthaler, one-time secretary to Haider, has promised to deport 300,000 foreigners overnight, prompting popular justice minister Karin Gastinger to resign from the party last Monday.

As a result Alliance may not clear the 4 per cent parliamentary hurdle while the Haider-less Freedom Party has experienced a revival under Haider clone Heinz-Christian Strache.

His anti-Muslim party slogan "Home not Islam" has found favour with 10 per cent of the electorate, according to polls.

"Strache is copying Haider in many respects, right down to the speaking style," said Eva Glawischnig, deputy leader of the Green Party.

"The recipe of politicking with fear is working as usual and is very regrettable for Austria."

In the end it is the Greens who may rescue Mr Schüssel from extremists or a grand coalition with the socialists.