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Austrian Coalition Talks Collapse as Liberal Neos Withdraw

The failure of three-party negotiations leaves Austria's political future uncertain, with conservatives and social democrats exploring alternatives.

  • The liberal Neos party unexpectedly exited coalition talks with the conservative ÖVP and the Social Democrats (SPÖ), citing a lack of reform progress and mounting disagreements over budget and policy priorities.
  • The three-party coalition, nicknamed the 'Zuckerl Coalition' for its colorful party representation, was seen as a strategy to exclude the far-right Freedom Party (FPÖ) from power despite its electoral victory in September.
  • The ÖVP and SPÖ, now left as the only negotiating parties, face challenges in forming a government with their razor-thin parliamentary majority of just one seat.
  • The FPÖ, which has gained further support in recent opinion polls, has called for Chancellor Karl Nehammer's resignation and criticized the coalition talks as misguided.
  • Austria's political deadlock comes amid economic challenges, including a large budget deficit, rising unemployment, and the need for significant fiscal reforms to meet EU stability criteria.
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