Austria Gets a Grace Period To Prepare for the EU Test

Sound of relief sweeps country as far right loses votes, for now

AUSTRIA'S mainstream left-right parties have proved they can win elections. Now their leaders must prove they can lead their country through the hard-knocks future of a united European economy.

Chancellor Franz Vranitzky, of the Social Democratic Party, ultimately won more votes than expected after a down-to-the-wire race. The mainstream conservatives will now form a coalition with his left-leaning party, rather than with the far-right Freedom Party.

But analysts ask whether the parties are up to the challenges of governing the country. In particular, the Social Democrats and the conservative People's Party have struggled to narrow the budget gap enough for Austria to qualify for Europe's single currency by 1999.

Austria is yet another country in Europe that is suddenly asking, Can we afford our social safety net? And can European standards of wages and benefits survive global economic competition?

Such tough struggles and potential economic sacrifices, leave a window for the far-right Freedom Party to win votes. Its leader, Jorg Haider, son of a Nazi Party member, has undisguised ambitions for Austria's top job as chancellor and portrays himself as the kind of youthful, creative leader that can help guide Austria through difficult economic reforms and into the 21st century. (His party received 22 percent of Sunday's vote, down a little from the last elections but enough to keep other parties concerned.)

Despite fears about Mr. Haider, notorious for having praised the job-creation policies of the Nazi regime, his party's popularity does not point to hidden extremist tendencies among Austrians so much as to their profound impatience with the country's traditional mainstream parties.

Wrangling over budgets and economic reform brought the collapse of the former government in October and prompted Sunday's election. The budget upheaval in Austria is a calmer version of the Europe-wide turbulence that has plunged France into weeks of damaging transport strikes, caused strife in Belgium, and even got prosperous Germany looking to cut social benefits.

Wolfgang Schussel, the leader of the conservative People's Party, balked at tax increases called for by the Social Democrats, senior partner in the coalition.

Mr. Schussel, arguing for spending cuts instead, hoped that an election (the second in 14 months) would give his party a clear new mandate, out ahead of Chancellor Vranitzky's Social Democrats.

With neither main party strong enough to rule alone, however, the question of coalition partners was and is critical. The Freedom Party's free-market orientation would make it a potential ally on economic issues for the People's Party.

Voters ultimately followed tradition once again, apparently worried about Haider's politics. They turned to the Social Democrats, who got 38.3 percent of the vote, 3.4 percent more than in the last elections. Conservatives picked up an additional seat, too. The Freedom Party dropped a seat to 41.

But it's unclear how long the two main parties can depend on voters to follow postwar tradition.

Nominally opponents on the traditional left-right model, the Social Democrats and the People's Party are actually partners in a peculiarly Austrian system called proporz, whereby jobs and other economic spoils are proportionately divided between the parties. This system, designed to ensure benefit-sharing, is making it difficult for Austria to compete economically.

And although prosperous and stable, Austria is having to face economic restructuring like its neighbors. The EU's criteria for participation in the single currency, seem impossibly difficult: Only Luxembourg and Germany now meet them.

But the single currency's advocates see the EU as important preparation to get countries into shape for competition in the larger world market.

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