AUSTRIA: KREISKY'S ELECTION

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State Dept. review
completed
Directorate of Secret
Intelligence
Austria:
Kreisky's Election
Secret
EUR 83-10110
April 1983
Copy
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L~.)A I
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Intelligence
Austria:
Kreisky's Election
This paper was prepared b~ of the
Office of European Analysis. Comments and queries
are welcome and may be addressed to the Chief,
Western Europe Division, EURA,
Secret
EUR 83-10110
April 1983
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Secret
Austria:
Kreisky's Election
Key Judgments The Austrian election on 24 April will determine whether Chancellor
Information available Bruno Kreisky, the 72-year-old Socialist Party chairman, retains his
as of 4 April 1983 position as the longest reigning leader in Western Europe. We doubt the
was used in this report.
Socialists will equal their 1979 showing of 51 percent, but polls indicate
they will win a plurality, taking somewhere between 45 and 50 percent of
the vote. The conservative opposition, the Peoples' Party, will probably take
between 40 and 45 percent, according to the same surveys. The small
liberal Freedom Party will battle several new environmentalist parties for
the remainder.
Chancellor Kreisky's failing health is chiefly responsible for clouding the
Socialists' prospects. Kreisky remains immensely popular, but still has
designated no political heir. We believe the muddled line of succession
helps account for a fairly large block of undecided voters.
The splintered environmental vote could mean that no environmental party
will win enough votes to enter parliament, an outcome that would force a
redistribution of their votes among the major parties. If the Socialists come
close to a majority on their own, the redistribution process could give them
the majority in the legislature.
Should no party win an absolute majority, we believe a coalition is more
likely than a minority government. The two most probable combinations
would be either a Socialist-Freedom Party alliance or a grand coalition
between the two largest parties.
We believe the chances that Kreisky will return to power are only about
50-50. He has said repeatedly that he will not lead a coalition government;
although this is in part an attempt to win additional votes for the Socialists,
we believe that because of his failing health, Kreisky would not take on the
added burdens of running a coalition.
We do not expect radical departures in Austria's foreign policy regardless
of the outcome because there is a consensus on the benefits of Austria's
neutrality and the necessity for a balance of power in Europe. Nonetheless,
a government led by the conservatives, or one with their participation,
iii Secret
EUR 83-10110
April 1983
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would introduce some changes. Such a government probably would focus
more on European issues and give less attention to affairs elsewhere,
largely because of the absence of the more global-minded and internation-
ally known Kreisky. A government without Kreisky is also unlikely to
invite controversial figures like Libyan leader Qadhafi to Vienna and
possibly would lend more vocal support to US policies in areas of less
immediate interest to Austria, such as Central America.
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Austria:
Kreisky's Election
Introduction
On 24 April Austrian voters will decide if Chancellor
Bruno Kreisky will remain as Western Europe's long-
est reigning statesman. Kreisky came to office in
1970, and in the last federal election in 1979 got over
51 percent of the vote, his third straight parliamenta-
ry majority. He is far and away the most popular
politician in Austria, but his age-72-and chronic
health problems raise questions about his ability to
manage another four-year term. Polls suggest that his
failure to single out an heir apparent has created
uncertainty about the future leadership of the
Socialist Party (SPOe), perhaps to the point that its
voting strength could fall below 50 percent
Aside from the Kreisky question, a number of other
issues will affect the public's support for the SPOe,
the conservative Peoples' Party (OeVP), the liberal
Freedom Party (FPOe), and the emerging alternative
and "green" parties. There has been much debate, for
example, on the proposed UN Conference Center, the
fate of the idle Zwentendorf nuclear reactor, and the
future of nuclear energy in general. Although foreign
policy has not been a major issue, Kreisky's opponents
are trying to score points by suggesting that his
flirtation with Third World leaders like Libya's
Qadhafi could jeopardize relations with the United
States.
For most voters, the economy remains the principle
issue. The list of problems is impressive: unemploy-
ment stood at over 6 percent of the work force in
January 1983,' losses in the nationalized industries
continue to mount, budget deficits are growing, and
higher taxes are a prospect. But Austrians resist
sudden changes in their governments, and we doubt
that many are willing to blame Kreisky for the
difficulties
' According to statistics from Austria's Laenderbank, unemploy-
ment in 1981 was 2.4 percent; in 1982 it rose to 3.7 percent. F_
The Parties
The three parties that have dominated postwar poli-
tics will be joined by a fourth grouping this election,
the environmentalist "greens." The greens are more a
movement than a party, however, and a number of
electoral lists are competing for the ecological vote.
And the fringe parties on the extreme left and right 25X1
are still not realistic alternatives; in 1979, for in-
stance, the Communists won less than 1 percent of the
vote, and no extreme rightwing party was even on the
ballot. This year eight parties have qualified.
The Socialist Party. Founded in 1889, the Socialist 25X1
Party has run Austria alone since 1971. The SPOe
has a well-organized structure, and nearly one Austri-
an voter in six is a dues-paying party member. In
addition, the various arms of the party apparatus are
staffed by some 70,000 loyal functionaries.
Especially important are the close ties the party 25X1
enjoys with organized labor-the bulk of SPOe sup-
port comes from urban industrial workers. Not only
are union members an essential source of votes, but
union leaders are also closely integrated in the party's
leadership. Several members of the Austrian Trade
Union Federation are top party executives; four are in
the cabinet, and 29 represent the party in parliament.
25X1
Over the last decade, the Socialists have also been
winning an increasing share of the middle class vote.
largely white-collar workers and civil servants. The 25X1
Socialists, by managing the economy and government
for more than a decade, have developed a pragmatic
image that has helped overcome middle class skepti-
cism. The party has also helped itself in this respect
by maintaining the "social partnership" between gov-
ernment, labor, and industry that developed during
the era of postwar reconstruction.
25X1
25X1
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 East European regimes an opportunity to distinguish
themselves from Moscow. At times Kreisky has open-
ly criticized the United States for taking too confron-
tational a line toward the Soviets, and he has general-
ly opposed sanctions directed at the Soviet Bloc,
terming them ineffective and counterproductive. For
example, Kreisky fought economic sanctions against
Poland and in 1982 even sought to arrange an interna-
tional loan that he thought would salvage the Polish
economy and preserve some of the gains won by
Solidarity. Nonetheless, party leaders continue to
criticize the Soviet invasion of Afghanistan; Kreisky
also has stated publicly that Soviet SS-20s create a
nuclear imbalance in Europe.
Although current Socialist party leaders enjoy wide
support within their organization, some internal oppo-
sition has surfaced, particularly among the leftwing
members and youth organizations. Thus far Kreisky
has been able to appease the leftwingers by giving
them a chance to speak out on issues of lesser
importance to Austria. He has allowed one leading
leftist, for example, to take a stance critical of US
policy in Central America within the Socialist Inter-
Under the Socialists, Austria has become more active
in global affairs. Many party leaders remember the
troubled days of the 1930s and 1940s, and they
actively cooperate with international colleagues in an
effort to avoid a recurrence of turmoil in Europe.
Austria's neutral status also has encouraged the So-
cialists to promote their country as an intermediary
and Vienna as a meeting place. Kreisky in particular
believes his international stature enables him to act as
an effective mediator of international disputes
Although occasionally critical of US policy, the party
leadership remains predominantly pro-West, recog-
nizing the US role in creating and maintaining the
European balance that allows Austria to pursue its
neutrality. The Socialist government remains a firm
supporter of detente, which Kreisky believes gives
The strongest criticism of the party leadership has
come from youth leaders. The two youth organiza-
tions, the Young Socialists and the Young Genera-
tion, have complained at various congresses about
their lack of influence, overly pragmatic party leaders,
cronyism, and corruption. Youth leaders have also
made public their fears that younger voters will
gravitate to the newer "green" parties or simply
abstain.
For the moment, Kreisky retains nearly absolute
control over his party despite these frictions. His
stature makes him invulnerable to personal attack,
and he remains the only Socialist able to appeal
beyond the solid block of working-class voters. The
US Embassy in Vienna estimates that between 3 and
5 percent of the votes for the Socialists in 1979 were
cast for Kreisky rather than the party, a figure that
will be at least as large in 1983.
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The succession question continues to bedevil the par-
ty, in large part because Kreisky has not allowed a
successor to establish himself. Until late 1980, it
appeared that he had settled on the then Vice Chan-
cellor and Finance Minister Hannes Androsch as the
crown prince. Androsch's refusal to abandon his
personal financial interests after he was implicated in
a scandal involving a hospital project in Vienna led
Kreisky to demand his resignation, and Androsch has
been languishing ever since.
Current plans call for a troika of Heinz Fischer, Karl
Blecha, and Fred Sinowatz to run the party and
government after Kreisky's departure. Fischer would
remain head of the parliamentary group, current Vice
Chancellor Sinowatz would assume the chancellor's
post, while Blecha, an executive vice president in the
party, would become party chairman. All three ap-
pear to support current Socialist policies and are loyal
to Kreisky. It is doubtful, however, that any of them
can command the respect and loyalty that Kreisky
does. Polls indicate that Sinowatz is popular with the
Austrian voter, but he remains well behind Kreisky.
We do not believe he, or the other two front-runners,
possess the attraction to retain the SPOe's parliamen-
tary majority in an election.
The Peoples' Party. Established in 1945, the Peoples'
Party reigned as senior partner in a grand coalition
with the SPOe from 1945 to 1966. Over the next four
years it ruled Austria alone before going into opposi-
tion in 1970. The Austrian equivalent of a Christian
democratic party, the OeVP draws its strength pri-
marily from business and farmers.
Party leaders have indicated to journalists that they
doubt they can replace the SPOe as the largest party
in Austria. Instead, they hope to hold the Socialists
below an absolute majority, creating the possibility of
an OeVP return to government in coalition with either
the Socialists or the Liberals.
The OeVP has been led since 1979 by Alois Mock,
previously parliamentary floor leader. Many party
officials had hoped that the 48-year-old Mock's
youthful and energetic appearance would help revive
the party's electoral performance, which hit a postwar
low in 1979. The OeVP, however, continues to suffer
from a stodgy and bureaucratic image, as well as from
a weak and ineffective organization-factors that
make conservative leaders appear uncertain and in-
competent compared to Kreisky. In addition, press 25X1
commentators note that the OeVP has never been
able to formulate a clear alternative to the popular
Socialist government's programs.
Peoples' Party spokesmen say they would return 25X1
Vienna's foreign policy to a neutralism closer to the
Swiss model. In practice, we think this would mean 25X1
less activism, less taking of sides, and a more moder-
ate international image. Mock claims that although it
is imperative for Austria to maintain good relations
with its East European neighbors, it must be seen first
as a Western democracy. This would entail greater
cooperation with its West European neighbors and
with the European Community. Mock asserts that a
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conservative-led Austria would have smoother bilater-
al relations with the United States, although he has
failed to specify how.
The party's economic platform recently has taken on
more shape, but still remains somewhat vague. Mock
has accused the Socialists of waste and mismanage-
ment, and says they have burdened the economy with
excessive regulation. He claims the Peoples' Party
would rework next year's budget, streamline the
bureaucracy, and lower taxes to free funds for invest-
ment and research and development. The party also
has spoken of the need to promote small- and
medium-sized firms and the construction industry in
addition to making structural improvements in ailing
nationalized industries.
The Freedom Party. This party is an amalgamation of
laissez-faire advocates, libertarians, and anti-Marx-
ists. It was established in 1955 and has often acted as
a vehicle for those dissatisfied with the larger two
parties. The party draws much of its support from
conservatives who, according to Austrian political
observers, cannot bring themselves to vote for the
OeVP because they think Austria's powerful Roman
Catholic Church exerts too much influence in the
party.' Because most of the nationalists from the
discredited Pan-German camp ended up in FPOe
ranks, the party also has had a decidedly rightwing
image, which current leaders are trying to change.
Since the late 1970s, the party has been wracked by
personality conflicts among its leaders, mostly be-
tween Norbert Steger and Alexander Goetz. In
December 1979, Steger was selected as party chair-
man. Born in 1944, he was the first FPOe party leader
untainted by Austria's role in the Third Reich and
World War II and, as such, represented a new
generation of political leadership. Party leaders hoped
he would be able to resolve the party's internal
conflicts and establish it firmly as the third party in
Austrian politics.
'After the war the Church decided not to become actively engaged
in Austrian politics. As a result, the Church does not campaign for
any one party. Although the OeVP undoubtedly benefits from
Austria's Catholic heritage, we believe the number of votes cast for
Although Steger has emerged as the clear leader, the
party divisions that still exist will, in our view, damage
FPOe electoral prospects. Steger has acted to move
the party slightly to the left to capture liberals who
normally vote for the SPOe. Steger claims that about
10 percent of the voters fall into this category.
Alexander Goetz, who led the older right-of-center
faction, had hoped to align the party with the more
conservative OeVP. The defeat the party suffered in
January in the Graz municipal election where Goetz
had been mayor, may have ended his career as the
right's most effective spokesman. Goetz is not alone,
however, in objecting to Steger's new course, and the
party leadership will continue to draw fire from
internal critics
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Party leaders generally stress their belief in a free
market economy, emphasizing the need to restrict
government intrusion. The social welfare system,
taxes, and the bureaucracy should also be reduced,
they argue, in order to revive private initiative. In
addition, the party has taken a clear stand against
nuclear energy.
The Freedom Party has been vague on foreign policy.
While party leaders have noted the positive US role in
establishing a European balance of power, the FPOe
endorses European unity and a continent free of
superpower interference. More specifically, Steger
has called for a neutral central Europe free of all
"offensive" weapons
Steger continues to speak optimistically of his party's
chances this month, but recent elections do not sup-
port such optimism. Last October the FPOe lost its
vice-mayoral post in Salzburg, and in January 1983 it
dropped nearly 9 percentage points and five seats in
Graz, losing the mayoral post in the process. In each
case the newer green and alternative parties apparent-
ly stole protest votes that traditionally went to the
Freedom Party.
The Alternatives and Greens. Austria is currently
experiencing the growth of an environmental move-
ment that has added a new dimension to electoral
politics. As in West Germany, the green movement
grew out of citizens' groups protesting against nuclear
power and pollution, a dissatisfaction with the estab-
lished parties as unresponsive to the cares of the
individual voter, and involvement in peace and disar-
mament campaigns. Recent local elections show that
the greens possess a growing attraction for the Aus-
trian electorate.
Among the various groupings, we think only two have
a real chance to win representation at the national
level. The largest, the Alternative List Austria
(ALOe), was founded last November in Linz; the
event drew West German Green leader Petra Kelly,
who appeared in a show of support. The group consists
mostly of environmentalists and dissident leftists,
along with a few artists, homosexuals, and social
dropouts. The ALOe claims adherence to four princi-
ples: preservation of the environment, a vaguely de-
fined "basic democracy," nonviolence, and solidarity
with the Third World. In the ongoing campaign they
are advocating a halt to the use of nuclear power, 25X1
especially the plant at Zwentendorf, a housing pro-
gram that emphasizes renovation over new construc-
tion, improvements in public transportation, and no
additional highway construction. They also want 25X1
higher taxes on natural resources like water, a 35-
hour workweek with no reduction in pay and a ceiling
on all incomes at about $1,700 a month.
Negotiations in January to form an electoral alliance
with the ALOe's chief competitors, the "United 25X1
Greens" (VG), failed over differences in ideology and
social and economic policies, underscoring the dispari-
ties in the movement. The "United Greens" are an
outgrowth of the campaign in 1978 to close the
nuclear plant at Zwentendorf. The United Greens
hope to appeal to the middle of the Austrian elector-
ate; they advocate none of the ALOe's social and 25X1
economic reforms and concentrate instead on the
environment and nuclear energy.
At first, the environmentalist parties claimed their
mission was not to win seats in parliament or to hold
office, but merely to educate the public and prod the
politicians. Recent electoral successes in Salzburg and
Graz-where these parties won four seats and 7
percent of the vote-have raised hopes higher. Voter
surveys generally give them from 5 to 10 percent of
the vote, primarily among those under 30. Leading
spokesmen claim they can capture 5 to 6 percent. of
the vote and possibly four or five seats in the
legislature? 25X1
'To win parliamentary representation in Austria, a party needs to
capture only one seat by direct vote-the first phase of seat
allotments. In this allotment, seats are awarded in each of the nine
electoral districts by dividing the total number of votes a party
gains by the minimum number of votes necessary for a seat. Seats
are distributed proportionately in a second phase, in which the
country is divided into two electoral districts and the remaining
votes are collected in each. According to this scheme, the environ-
mental party needs to win a bloc of votes in only one district where
it is popular-Vienna, for example. If it does, the scattered votes it
wins elsewhere in that half of the country may be enough to give it
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Austrian Federal Elections:
1966-79
SPOe (Socialists)
OeVP (Conservatives)
Percentage
Seats
Percentage
Seats
1966
42.5
74
48.3
85
5.3
6
3.9
0
1970
48.4
81
44.6
78
5.5
6
1.5
0
1971
50.1
93
43.1
80
5.5
10
1.3
0
1975
50.4
93
43.0
80
5.4
10
1.2
0
1979
51.0
95
41.9
77
6.1
11
1.1
0
Most Austrian political observers expect that the
environmentalists will merely steal some votes from
the larger parties. Observers generally agree that the
left-leaning ALOe will take votes from the Socialists,
whereas the more moderate VG will wean support
from the Peoples' or Freedom Parties. If the green
parties split their vote and fail to enter the National-
rat, Kreisky's Socialists might retain their absolute
parliamentary majority through seat reapportion-
ment, while winning less than 50 percent of the vote.
business brought by international conferences, organi-
zations, and summitry, gratifies this longing to a
degree. The Chancellor is sometimes referred to as
"Kaiser Kreisky," and the strict control he exercises
over party and government provides the strong and
regal leadership many Austrians appreciate
The uncertainty of Kreisky's appeal in this election
comes from his age and failing health.?
The Major Issues
The Kreisky Question. Chancellor Kreisky easily re-
mains Austria's most popular politician; a Gallup poll
in 1981 found that 65 percent of all Austrian voters
endorsed Kreisky's running for reelection, including
nearly half of those aligned with the Peoples' Party.
Another poll published last fall claimed that over
60 percent of those surveyed expected the Socialists to
retain control of the government if Kreisky led the
ticket; again, over half of the OeVP supporters
agreed. Kreisky consistently receives higher popular-
ity ratings than other Austrian politicians. In a recent
survey rating politicians, Kreisky was twice as popular
as Mock, his closest competitor.
We believe the reasons for this popularity rest essen-
tially on Kreisky's imperial style and the foreign
policy his administration has pursued. Most Austrians
like the attention Kreisky brings to their country.
Vienna remains an imperial capital in search of an
empire, and the international attention, as well as the
(Last spring he promised to publish a
full report on his health and announce his future
plans. After months of delay he announced his candi-
dacy but failed to release the medical analysis.
to last the entire four-year legislative term, however.
None of the probable successors commands the
loyalty Kreisky enjoys at home or the prestige he 25X1
garners abroad. The opposition parties plan to avoid
the question of Kreisky's health-because raising it
would probably prove counterproductive-but they do
hope to benefit from voter uncertainty about the
muddled line of succession.
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The Economy
The major substantive issue will be the economy and
how to handle the recession. During more prosperous
times Austria was hailed as a model because its fiscal
policies had secured economic growth, high levels of
employment, low inflation, and a strong currency.
Recent trends have been less encouraging, however.
Unemployment of 6.5 percent and inflation of 5
percent are high for Austria, and forecasters see GNP
growing less than 1 percent this year. Especially
worrisome is the state of the nationalized sector,
nearly a fifth of Austrian industry and a third of the
industrial work force. Despite massive subsidies, na-
tionalized industries have suffered steady losses dur-
ing much of the past decade. For example, in
November 1982 the Austrian parliament authorized
approximately $200 million in subsidies to help cover
losses, which press reports placed at nearly $300
million.
The government can point to some successes in the
foreign sector of the economy, however. Austria has
improved its international trade and payments bal-
ances, allowing the schilling to remain strong and
shielding the economy from foreign inflationary pres-
sure. Although the value of exports grew only a
modest 6 percent in 1982, imports fell nearly
1 percent, largely because of an 11-percent decline in
energy imports. The overall balance of payments for
1982 showed a surplus of some $500 million, the first
surplus since 1969, and a clear improvement over the
$1.2 billion deficit for 1981. In earlier years, the
Many Austrians recognize the danger in growing
budget deficits and the need for structural improve-
ments in industry, but immediate concerns such as
jobs are more pressing. The Socialists' success in
convincing the Austrian public that their program
remains the safest approach for the near future has
made it difficult for the Peoples' Party to offer much
in the way of specific change, leaving it with plati-
tudes about seeking a better life for Austrians.
The government's recent proposal to raise taxes on 25X1
interest earnings and bonus payments, however, has
introduced an issue that the opposition can exploit.
Government spokesmen claim the tax package would
become effective only after 1 January 1984 and is
necessary for a new jobs program. Some Austrians
fear the measure would discourage savings, and the
OeVP has announced that it would not implement the
measures if in the government.
The UN Conference Center
Last spring the OeVP sponsored a popular nonbinding
referendum opposing the UN conference center that
Kreisky proposes to build in Vienna. The success of
the petition, which garnered over 1.3 million signa-
tures-26 percent of the electorate-exceeded all
expectations. Opposition to the center cut across party
lines. Indeed, 16 percent of the signers were SPOe
supporters, who acted despite Kreisky's orders that
Socialist government had been criticized for its high
growth, "hard" schilling policy-its informal link to
the West German mark-which had yielded large
trade deficits 25X1
The Socialists argue in their campaign that they have
shielded the Austrian economy from the worst effects
of the international recession. The Austrian budget
for 1983 is an extension of the Socialist Party's
philosophy of intervening in the economy to maintain
employment. The budget calls for public works pro-
grams and additional subsidies to industry to promote
employment; export subsidies are also likely to be
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party members disassociate themselves from the ap-
peal. In addition, a viewers' poll that followed a
television debate on the topic between Kreisky and
Mock favored Mock.
A Gallup poll in January noted that the conference
center is likely to figure high in the voters' minds, and
neither party has shied away from the topic. Financ-
ing is the key issue because costs are expected to run
as high as $440 million. Kreisky recently announced
that the UN center will be funded through federal
and city revenues and by foreign sources, including
Saudi Arabia, Kuwait, the United Arab Emirates,
and the Sheraton Hotel Group. Kreisky stressed that
the terms were favorable, but the Peoples' Party
claims most of the costs will be borne by the Austrian
taxpayer. Opposition figures say the funds could be
better used in municipal housing construction.
Zwentendorf
Nuclear energy has proved to be a contentious and
unpredictable issue in Austrian politics. Opposition to
nuclear power does not follow party lines, and each of
the parties is worried about losing votes over the
issue-a fear supported by recent polls. The two
major parties probably would like to keep the question
of nuclear energy-and the plant near Zwentendorf in
particular-out of the campaign. In addition, neither
the SPOe nor the OeVP wants to engage in campaign
rhetoric that could distort the issue and force the
parties into binding commitments that would make
completion of the plant even more difficult
The issue will be difficult to bury. In 1978 a referen-
dum seeking to halt construction of a nuclear power
plant near Zwentendorf won by a bare margin, 50.5 to
49.5 percent, despite Kreisky's personal pronuclear
appeal. Following the referendum, the legislature
passed a resolution blocking further construction un-
less a two-thirds majority-in effect, both major
parties-reversed the resolution. The decision to halt
construction at Zwentendorf was merely a postpone-
ment, which is effective only until the end of this
legislative term. Kreisky, who favors opening the
plant after another referendum or parliamentary ap-
proval, has promised to resolve the questions of safety
and waste disposal before moving ahead. Still, the
greens and FPOe distrust Kreisky on the issue and
claim that only their presence in parliament can keep
Kreisky from going ahead with construction.
Foreign Policy
In view of the traditional consensus among the major
parties on the substance of Austrian foreign policy, we
believe foreign affairs will play only a minor role in
the election. Austria's policy of "active neutrality"
remains popular, and Kreisky's international activities
have brought the country considerable attention, some
say notoriety. OeVP spokesmen tried to make
Austrian-US relations an issue last year. Opposition
spokesmen accused Kreisky of endangering ties to the
West and alienating US leaders through his outspo-
ken positions on the Middle East and East-West
affairs. As evidence they pointed to the failure of the 25X1
United States to appoint an ambassador to Vienna
and to accusations from Washington regarding trans-
fers of sensitive technologies to the Soviet Bloc.
Kreisky's visit to the United States in February
appears to have silenced the opposition. An agreement
on technology transfer has been reached and an
ambassador appointed. Kreisky's endorsement of
President Reagan's Middle East initiative, mean-
while, has silenced critics who cited Vienna's
allegedly dangerous flirtation with Arafat and the
PLO. In short, further criticism of Kreisky's "active
neutralism" could backfire, given the public's appreci-
ation of Kreisky's role on the international stage.
Possible Coalitions and Their Implications
Should the Socialists gain a majority of seats, Chan-
cellor Kreisky will feel vindicated in his conduct of
domestic and foreign policy. We believe he would
continue especially to pursue his role as mediator
between contending external groups, be they East-
West or North-South. If the Socialists fail to secure
an absolute majority-a good possibility according to
the polls-they probably would form a coalition gov-
ernment. SPOe officials have noted in the press the
inherent difficulties in running a minority government
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that must enlist support on every issue, and they see
this as a possibility only if they fall a seat or two short
of a majority. Opposition leaders, for their part, have
indicated that they would not support a Socialist
minority government but would consider a coalition.
Regardless of the alignment, economic policy would
provide the most contentious issue.
The most noticeable aspect of almost any coalition
will be the absence of Kreisky, who claims he no
longer has the energy necessary to lead such a
government. He claims he would retire and pass
control on to a successor. In saying this, Kreisky may
be using his popularity to bring doubting voters back
to the Socialist fold, but US Embassy sources believe
he is sincere. We think Kreisky would remain only in
the event of a Socialist majority, or if the Socialists so
dominate a coalition-with a weak FPOe, for exam-
ple-that he could envision little resistance to his
policies.
Although Kreisky has been a prominent figure in
international politics over the past decade, his impact
has come largely from his flamboyant style, sense of
drama, and willingness to maintain dialogues with
controversial political leaders. His actions, however,
have not markedly changed the basic thrust of Aus-
trian foreign policy. While he has tried to play a
prominent role in areas less essential to Austria, like
the Middle East, his influence on events in such areas
has been marginal. A coalition government without
Kreisky would have a similar but less colorful foreign
policy because it would operate with leaders like
Sinowatz or Mock, who do not have the personal
contacts, the stature, or probably the inclination, to
try to influence events as Kreisky has.
Most speculation in Austria has centered on the
possibility of an SPOe-OeVP grand coalition. Few
observers regard an all-conservative OeVP-FPOe
union as a realistic option. OeVP Secretary General
Graff claimed in Washington last year that a majority
of Austrians, his party included, preferred a grand
coalition. Such a combination ruled Austria during
the postwar reconstruction period from 1945 to 1966,
and it conforms to the Austrian tradition of "social
partnership." In Graz last month the two parties
agreed to share the mayoral post, after elections left
both parties short of an absolute majority. The OeVP
will hold the office for two years, the SPOe for the
following three. Nonetheless, such an alliance at the
national level appears likely only if it is the sole way to
ensure a stable majority-that is, if significant Social-
ist losses or the Greens' entry into parliament blocks
all other combinations.
Under an SPOe-OeVP grand coalition, we would
expect mainly changes of tone and focus. Because of
Kreisky's absence and the presence of the conserva-
tives, this coalition most likely would concentrate on
European affairs and East-West relations. In the
Middle East, for example, such a government proba-
bly would pursue a less independent course than
Kreisky has, while continuing to endorse US policies
and reducing criticism of the Israeli Government and
support for the PLO. Vienna would reiterate its offer
to act as an intermediary in this and other conflicts,
but it is unlikely that Kreisky's successors would have
much success. 25X1
We believe that a Socialist-Freedom Party coalition
is more likely than a grand coalition, because policy
differences between these two parties have grown
smaller under Steger and the combination would
leave the Socialists dominant. The main stumbling-
block is that the Freedom Party's electoral prospects
have diminished over the last year, leaving open the
possibility that the FPOe may not gain enough seats
to create a majority with the SPOe. Nonetheless, 25X1
leading figures in both parties have maneuvered to-
ward an alliance recently. Sinowatz publicly claimed
to have no major objections. Steger has raised the
possibility in speeches, and FPOe figures have moder-
ated criticism of SPOe policies and actions in cases
such as the hospital scandal. An SPOe-FPOe coalition
with or without Kreisky probably would not change
foreign policy and would alter domestic policy only
slightly. 25X1
A conservative-led coalition in our view would alter
the tone and visibility of foreign policy to a much
greater degree, but again not the substance. As
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Chancellor, for example, Mock almost certainly
would not invite controversial foreign leaders to
Vienna. We believe a government led by the OeVP
probably would offer greater public support for US
and West European policies, especially if there is
truth in the speculation that Austria's Ambassador in
Washington, Thomas Klestil, would become foreign
minister in a conservative government. Such a govern-
ment would be less outspoken on issues that do not
have an immediate bearing on Central Europe, such
as the Middle East or Central America. Yet such an
administration would encounter many of the same
obstacles confronting any Austrian government if it
sought closer cooperation with the West
In short, the foundations of Austrian foreign policy
will remain the same under any of the possible
governments. By virtue of its geography and constitu-
tionally mandated neutrality, Austria will retain sig-
nificant ties to both East and West; the economic
benefits and global attention stemming from its role
as mediator ensure that Austria's leaders will con-
tinue this emphasis in their foreign policy.
Despite Austrian neutrality, all major parties make no
secret of their predominantly pro-Western orienta-
tion. Any Austrian government can be expected to
reaffirm the country's commitment to the Western
political community, as well as close ties to the United
States.
Regardless of the election's outcome, we believe
Kreisky will continue to play a prominent role in
international affairs as long as his health holds.
Foreign affairs remains his first love, and his policies
will continue to carry weight in the party. Socialists in
Austria remain genuinely loyal to their foremost
spokesman, the man who has ensured their party an
international hearing and 12 years of uninterrupted
rule. His position as elder statesman in the party and
country, as well as his post as vice president of the
Socialist International, ensure him a forum to pursue
his interest in detente, in the Middle East, and in a
dialogue between the industrialized and less devel-
oped nations.
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