Stockholm (Ekonamik) – Brigitte Bierlein was sworn in Monday (June 3) as Austria’s first female chancellor along with ministers of an interim government following the ouster of chancellor Sebastian Kurz by Austria’s parliament on May 27, in a no-confidence motion brought by the opposition Social Democrats. The motion was called after the video scandal involving former vice-chancellor Heinz-Christian Strache of the far-right Freedom Party (FPÖ), the coalition partner of Mr Kurz’s ÖVP, the Austrian People’s Party, in which Mr Strache promised state contracts to a woman impersonating a Russian oligarch’s niece and the takeover of the tabloid Kronen Zeitung, Austria’s largest daily.
The caretaker government will remain in office until parliamentary elections in September called by Mr Kurz to attempt to diffuse the scandal, following the mass resignation of his Freedom Party coalition partners after Mr Kurz decided the party could no longer be trusted with the Interior Ministry. In the event, the Freedom Party voted against Mr Kurz in the vote of no confidence, suggesting the ÖVP and FPÖ are unlikely to be coalition partners again in the future. Mr Kurz’s personal prospects remain bright, however, the scandal and his dismissal doing little to dent his personal popularity in the country. The ÖVP finished first in the European Parliament election, gaining on its pre-scandal figures, and there is a good chance Mr Kurz will be in a position to regain power in September.
Austria’s budget surplus (its first since 1974) suggests there is little chance of economic disruption in the short or medium term, although S&P Global Ratings has warned that the government’s collapse and Mr Kurz himself have undermined Austria’s long-term predictability. “We see these developments, together with past unorthodox policy proposals, as continuing to highlight risks to Austria’s currently strong policy-setting process and potentially undermining its long-term predictability,” S&P wrote following the eruption of the scandal. “The collapse of Austria’s two-party coalition highlights potential challenges to consensus-based policy making already factored into its current sovereign ratings.”
With the opposition Social Democrats (SPÖ) in disarray and the FPÖ bleeding support, Mr Kurz’s prospects are good, but he will have to rely on continued stable economic conditions over the summer now beyond his control and increasing his personal popularity further if he is to make his comeback. There is also the possibility of a governing coalition with the NEOs, Austria’s economically liberal party whose support has also been increasing in recent months. Ms Bierlein and the caretaker government are non-aligned technocrats chosen for their independence from political parties and thus won’t be a factor in the September election.
Image: Dr. Brigitte Bierlein, Präsidentin des österreichischen Verfassungsgerichtshofs seit 2018 (Wikimedia Commons)