This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 VIENNA 001298 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR EUR/AGS (VIKMANIS-KELLER) AND INR/EU 
 
E.O. 12958: N/A 
TAGS: PGOV PINR AU
SUBJECT:  HAIDER'S NEW MOVEMENT PLEDGES CONTINUED 
PARTICIPATION IN FEDERAL GOVERNMENT 
 
REFS: A) VIENNA 738  B) VIENNA 739  C) VIENNA 945 
 
D) VIENNA 1101 
 
This message is sensitive but unclassified. 
 
¶1. (SBU) SUMMARY: At its founding convention on April 17, 
the Freedom Party (FPO) spin-off, the "Alliance Future 
Austria" (BZO), elected Carinthian governor Joerg Haider 
as chairman.  Haider underscored the commitment of BZO 
ministers and legislators to the governing coalition with 
Chancellor Schuessel's Peoples' Party (OVP).  Haider 
presented the BZO as an "ideology-free platform" which 
seeks answers to the challenges of globalization.  Recent 
polls indicate the Social Democrats (SPO) have the most 
to gain from ongoing turmoil on the right.  Since some 
FPO deputies have failed to embrace the BZO, observers 
view the government's majority as at risk with each 
parliamentary vote.  A struggle between the BZO and the 
"old" FPO over party finances and debts will keep the pot 
boiling.  On the other hand, the prospect of serious 
losses in the event of new elections provides incentives 
for the OVP-BZO-FPO troika to remain together.  Schuessel 
will have to weigh the risks of going into Austria's 2006 
EU presidency with these arrangements.  End summary. 
 
BZO Founding Convention 
----------------------- 
 
¶2. (SBU) Under the slogan "Austria is flourishing," and 
with borrowed quotations from Albert Einstein and Thomas 
Jefferson, the "Alliance Future Austria" held an orange- 
draped founding convention at Salzburg's Mozart Airport 
on April 17.  Over 500 delegates, the majority of them 
from Carinthia, unanimously elected Joerg Haider as new 
leader of the movement. Since Haider has pledged to 
complete his term as governor of Carinthia, the delegates 
installed Vice Chancellor Gorbach as executive manager, 
with Justice Minister Karin Miklautsch (from Carinthia, 
until now an independent) and Heike Trammer (from Vienna) 
as Haider's official deputies.  Delegates also approved 
party by-laws and principles, which the leadership will 
flesh out into positions by the regular BZO convention 
later this year. 
 
¶3. (SBU) BZO leader Haider spelled out the party's top 
priority: securing jobs in a globalized world driven by 
shareholder value and "unbridled liberalization."  Haider 
accepted the reality of Austrian EU membership, but 
presented a vision of an EU with a stronger role for the 
member states.  He proposed giving Austrians the 
opportunity to express their views on key EU decisions, 
such as the draft constitution, through referenda.  BZO 
parliamentary caucus leader Herbert Scheibner stressed 
that the BZO rejected all 20th century ideologies and 
"isms" -- especially anti-Semitism. 
 
Parliamentary Caucus: BZO, FPO, Independents, Straddlers 
--------------------------------------------- ----------- 
 
¶4. (SBU) It remains unclear how many of the 18 members of 
parliament originally elected as FPO deputies will 
embrace the new movement.  Nine have so far declared 
allegiance to the BZO.  Three MPs stated they will remain 
in the "old" FPO, but said they would decide on a case-by- 
case basis whether to support the government.  The 
remaining six have taken wait-and-see positions or chosen 
to remain independent.  The FPO and BZO are locked in a 
bitter fight over who will assume the FPO's accrued debts 
(some three to seven million Euros) and receive various 
official subsidies provided under Austrian law.  Several 
thorny issues will inevitably land in the courts. 
 
¶5. (SBU) If the "old" FPO members win over two more 
straddlers, they would reach the minimum required for a 
separate caucus (with concomitant perks and subsidies). 
Such a development would hardly help stabilize the 
government. Under the old OVP-FPO line-up, the Schuessel 
government enjoyed a 5-seat margin in parliament.  But 
with only nine former FPO deputies firmly committed to 
the pro-coalition BZO, the coalition is, in theory, four 
seats short of a majority.  On the margins of the 
convention, BZO caucus leader Scheibner told us he was 
nevertheless confident of delivering reliable majorities 
for the coalition under the new arrangements.  Scheibner 
said he expects "problems" with only three MPs: Lower 
Austrian FPO chief Barbara Rosenkranz, Reinhard Boesch 
(Vorarlberg) and former Justice Minister Dieter 
Boehmdorfer. 
 
¶6. (SBU) The new volatility became evident in the Upper 
House of Parliament on April 14, when the SPO and Greens 
introduced a non-binding motion for new elections. 
Despite an agreement by OVP and BZO/FPO MPs to vote it 
down, FPO MP John Gudenus voted with the opposition, 
allowing the motion to pass by a razor-thin margin. 
While the vote had no practical impact, it illustrated 
the fragility of the government's majority. 
 
Both BZO and FPO stand to lose in elections 
------------------------------------------- 
 
¶7. (SBU) A recent poll indicated the Social Democrats 
have the most to gain from the turmoil the FPO split 
unleashed.  The SPO now leads Schuessel's OVP in party 
preference by seven points.  However, the numbers cold be 
misleading: Austrians view Schuessel as a factor for 
stability, and far more of them trust him to guide the 
country through turbulent times than his competitor, SPO 
chief Alfred Gusenbauer.  The survey showed the Greens 
clearly in third place (at 12 percent).  Both the BZO, at 
five percent, and the FPO, at three, would have to worry 
about missing the four percent threshold for seats in 
parliament in the event of new elections. 
 
¶8. (SBU) COMMENT: The FPO split has increased coalition 
instability.  "Old" FPO MPs might vote against the 
government on bills regarding asylum, army or health 
reform or, in the "standing committee" (Hauptausschuss), 
on EU issues or peacekeeping deployments.  Still, 
Realpolitik may provide the glue to hold together an 
unwieldy de facto three-party coalition of OVP, BZO and 
FPO -- despite the BZO/FPO trench warfare over subsidies 
and debts.  All three parties would have to expect 
serious losses in the event of early elections.  The OVP 
and BZO will more likely hammer out a strategic minimal 
consensus to carry them through for another year and a 
half until regular elections are due.  Schuessel, 
virtually alone, will have to weigh the risk of embarking 
on Austria's EU presidency in January 2006 with this odd 
collection of bedfellows. 
 
BROWN