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INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 04 VIENNA 002787 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE FOR EUR/AGS - SAINT-ANDRE 
 
E.O. 12958: N/A 
TAGS: PGOV PREL AU
SUBJECT: AUSTRIA'S OCTOBER 1 NATIONAL ELECTIONS -- FINDING 
"COALITIONS OF THE WILLING" 
 
 
VIENNA 00002787  001.2 OF 004 
 
 
¶1.  (SBU) Summary:  Austria's October 1 elections take place 
in the context of a political shift that followed this year's 
revelations of fraud in the trade union-affiliated bank, 
BAWAG.  This established a new political reality in which 
Chancellor Wolfgang Schussel's conservative People's Party 
(OVP) has consistently polled ahead of the Social Democratic 
Party (SPO) by two to four percentage points.  This shift, 
combined with Schuessel's personal popularity, puts the OVP 
in the driver's seat to lead the next Austrian government. 
The campaign so far has been rather formulaic, with the OVP 
appealing to trust in Schuessel, and the SPO making vague 
calls for greater "fairness."  The political theater has come 
from the xenophobic leader of the Freedom Party (FPO) -- not 
Joerg Haider, who left the FPO to form his own party and then 
fade as a political force, but rather Heinz-Christian Strache. 
 
¶2.  (SBU)  Summary continued:  The uncertainty surrounding 
this campaign is less one of vote numbers than of 
post-election coalition negotiations.  Even OVP loyalists 
discount the possibility of the OVP winning an absolute 
majority.  One key question is whether the OVP will have 
options beyond forming a Grand Coalition with the SPO.  The 
other is whether the SPO and Greens will together garner 
enough seats to form a government, thereby depriving 
Schuessel of the Chancellorship even if the OVP comes in 
first.  Even if Schuessel remains Chancellor, the next 
coalition government could well include a non-OVP Foreign 
Minister.  Foreign policy would likely be subject to even 
stricter constraints in a coalition agreement between the OVP 
and a left-leaning party.  That said, policy change would 
come only incrementally.  End Summary. 
 
-------------------- 
Can You Spell BAWAG? 
-------------------- 
 
¶3.  (SBU) With less than two weeks to go before Austria's 
national parliamentary elections on October 1, the big news 
seems to be the lack of news.  If it seems that the major 
campaign themes are the same as they would have been six 
months ago, that is because the defining event of this 
campaign season occurred six months ago.  That was when it 
became public that the Austrian Trade Union Federation (OGB) 
bank, the "Bank fuer Arbeit und Wirtschaft A.G." (BAWAG), had 
involved itself in massive fraud.  What is more, the OGB 
bailed out BAWAG with funds from its workers' strike fund. 
Although the OGB and the Social Democratic Party of Austria 
(SPO) are separate entities, the relationship between the two 
had been almost organic.  SPO party leader Alfred Gusenbauer 
did what he could to stop the bleeding.  Among other things, 
he declared that the SPO would no longer grant slots on its 
parliamentary election list to union officials.  Naturally, 
this carried its own backlash.  Union workers, who had 
traditionally undertaken a significant share of the SPO's 
electioneering work, were not amused. 
 
¶4.  (SBU) Chancellor Wolfgang Schuessel and his party, the 
conservative Austrian People's Party (OVP), played the BAWAG 
affair about as well as one could imagine.  Schuessel stayed 
on the high road, as, for instance, when he led the 
government in granting a bailout of the OGB "in the interests 
of the workers."  What is more, one can barely find the 
letters "BAWAG" in OVP campaign material.  The result is that 
no one is sick of hearing about it, and no one thinks of it 
as yesterday's story.  It remains the 800-pound gorilla in 
the next room, emitting the occasional grunt (as when it 
became public last week that the former BAWAG head had paid a 
70,000 Euro "consulting fee" in 1999 to former SPO Chancellor 
Fritz Vranitzky, the last truly iconic SPO politician). 
 
---------------------- 
What Do The Polls Say? 
---------------------- 
 
¶5.  (SBU) Thanks to BAWAG, the strategic landscape for the 
election has shifted.  For the past six years, the SPO had 
led the OVP in opinion polls by some two to four points.  The 
OVP strategy had been to stress Schuessel's personal 
popularity over Gusenbauer.  This had paid off in the 2002 
elections, when the OVP, at 42 percent, scored far ahead of 
its polling numbers and well ahead of the SPO.  Now, the 
parties' standings in the polls have reversed themselves.  It 
is the OVP that is garnering support in the range of 38-39 
percent, and the SPO that is trailing at 35-36 percent.  If 
Schuessel again delivers an electoral "bump," the OVP could 
well approach its 2002 vote share. 
 
¶6.  (SBU) Both the Greens and the Freedom Party of Austria 
(FPO) are flirting with double digit poll numbers.  The 
 
VIENNA 00002787  002.2 OF 004 
 
 
Greens tend to do worse in elections than their polling 
numbers indicate.  This may be because those who are Green at 
heart tend to decide not to "waste" their vote.  The FPO's 
situation is the opposite.  It seems that FPO sympathizers 
feel embarassed to express their true preference to a 
pollster, but nevertheless pull the lever for the FPO list. 
The "Alliance-Future-Austria" (BZO) party, which Joerg Haider 
splintered off of the FPO, is fading fast, despite its 
current status as the junior governing coalition party.  The 
BZO is finding it hard to reach the four percent threshold 
for entry into parliament.  Most observers believe that the 
BZO will have to win a seat outright in order to enter 
parliament.  This is a tall order even in the putative BZO 
"stronghold" of Haider's Carinthia.  An out-and-out protest 
party which formed around the person of former SPO legislator 
Hans-Peter Martin is also hovering around the three-to-four 
percent mark in polls.  As in many mature democracies, the 
wild card is the "undecided" bloc.  Almost a third of poll 
respondents is in that category.  With so much riding on the 
results at the margins, this is an important factor. 
 
-------------------- 
Where Do They Stand? 
-------------------- 
 
¶7.  (SBU) Schuessel's OVP is running almost exclusively on 
its record and on the person of Schuessel.  Typical is one of 
the party's posters that features the rather oxymoronic 
slogan, "Stay better."  Another common poster shows 
Schuessel's smiling face with the slogan, "Because he can do 
it."  Outside of Vienna, OVP campaign material highlights the 
more popular members of the current governing team.  On the 
strength of solid if unspectacular economic growth and job 
creation, together with inflation and unemployment rates that 
are among the EU's best, the OVP is banking on an almost 
content-neutral message of "staying the course." 
 
¶8.  (SBU) If the OVP campaign effort seems to lack 
inspiration, that of the opposition SPO seems almost 
mechanical.  SPO campaign material calls for "a new fairness" 
in the distribution of wealth and jobs.  For a party that has 
been in opposition for almost six years, the SPO has 
identified remarkably little substance upon which to 
campaign.  Part of this is because Schuessel has managed to 
coopt key SPO issues.  The OVP is against nuclear power, 
against genetically-modified organisms (GMO) in agriculture, 
and in favor of neutrality.  Even more frustratingly for the 
SPO, the things Schuessel has done over their objections, 
such as pension reform and corporate tax cuts, have actually 
worked.  Also unhelpful to the SPO cause is the figure of 
Gusenbauer, who is a competent party man but only an average 
campaigner.  Posters showing him interacting with groups of 
(presumably) concerned citizens are supposed to show his 
human side, but risk displaying a certain befuddlement 
instead. 
 
¶9.  (SBU) The Greens are usually good for campaign spice. 
The current publicity strategy seems to focus on solidifying 
the Green base.  Posters highlighting the preferences of 
"real people" range from the assertive (a supposedly Turkish 
man saying, "because Austria is my homeland, too") to the 
pouty (a young woman saying, because (Education Minister 
Elisabeth) Gehrer has saved enough on my education.")  A 
newer effort highlights popular party figures.  For instance, 
party leader Alexander van der Bellen, a professorial type 
who is among Austria's most popular politicians, proclaims, 
"it can be done without corruption." 
 
¶10.  (SBU) The days when the Greens were the wild cards are 
long over.  Instead, the BZO, FPO and Hans-Peter Martin's 
party are vying for the protest vote.  BZO standard-bearer 
Peter Westenthaler has been unable to draw significant 
numbers of the FPO base to his side, and no one else on the 
political landscape seems disposed to jump on his rattletrap 
of a bandwagon.  Haider has been virtually invisible to date. 
 BZO election themes are hard to identify -- the BZO is 
against crime and illegal immigration, and they are for a 
stronger economy, but who isn't? 
 
¶11.  (SBU) There's no problem identifying the policy stance 
of the "original" FPO.  Under party leader Heinz-Christian 
Strache, the FPO has grabbed the jingoist mantle.  Joerg 
Haider has faded into the Carinthian hills for the moment. 
The xenophobic firebrand is Strache, whose assertive claim to 
be the FPO's anti-everything is what drove Haider out of the 
party.  A typical FPO campaign slogan is "Daham statt Islam" 
-- roughly, "Down Home, not Islam."  Another is "Deutsch 
statt Nix Versteh'n" -- a nasty swipe at immigrants roughly 
on the level of "No espeak ze English."  The latest 
 
VIENNA 00002787  003.2 OF 004 
 
 
installment from the FPO brain trust shows a bright-blue eyed 
Strache (who clearly thinks his own image is a major selling 
point) with titles such as "The Patriot" and "Austria First." 
 
¶12.  (SBU) Hans-Peter Martin's party is a final, unique 
entrant into the Austrian electoral mix.  Martin is a 
quintessential "anti-" politican.  A former SPO member of the 
European Parliament, he made a name for himself by "exposing" 
the excessive benefits European parliamentarians receive. 
During the last European Parliament campaign, he received 
significant backing from Austria's largest newspaper, the 
Kronenzeitung.  This has fallen off during the current 
national campaign.  Nevertheless, Martin has made some 
headway by is banking on the fact that "none of the above" 
will always do well in any democratic election. 
 
----------------------- 
Putting Humpty Together 
----------------------- 
 
¶13.  (SBU) Observers do not expect huge swings in opinion in 
the last two weeks of the campaign.  The real question is 
what the parties make of the final result.  One or two 
percent of the vote will determine whether two parties -- the 
BZO and Hans-Pater Martin's party -- enter parliament at all. 
 If they do not, almost eight percent of the vote could be 
"wasted."  Whether these two make it or not, possible 
coalitions reflecting current vote predictions include a 
"Grand" Coalition (OVP-SPO), an OVP-Green coalition, or an 
SPO-Green coalition.  The OVP and SPO have said that they 
rule out coalitions with the FPO or with Hans-Peter Martin. 
However, in a Vienna where political pragmatism rules the day 
and alliance shift like liaisons in the operetta "Wiener 
Blut," anything is possible. 
 
¶14.  (SBU) OVP sages tell us they hope the OVP and the FPO 
together win over half the seats in parliament.  That is 
not/not to say they would cooperate in government.  Instead, 
the calculation is that this would make it impossible for the 
SPO to form a government without the OVP. 
 
¶15.  (SBU) The prospect of an OVP-Green (or "Black-Green") 
coalition, seems to intrigue Schuessel.  There is a precedent 
in the state government of Upper Austria.  Van der Bellen is 
a reasonable and experienced figure who could well serve 
successfully as Foreign Minister.  The Greens have some depth 
for staffing ministerial slots, although they are thin beyond 
the first level.  In fact, Schuessel probably prefers a 
relatively weak partner.  In his governing alliance with the 
FPO, he was able to marginalize his junior partner.  The 
objection to a Black-Green government is less likely to come 
from the OVP than from the Greens.  The Greens' Vienna 
branch, which forms roughly half of the national party, 
represents a "fundamentalist" wing that demonizes Schuessel 
and the OVP.  In the rest of Austria, Greens generally come 
from a more conservative, conservationist background.  Van 
der Bellen has toyed with the question of entering government 
with the OVP in the past, and this has always had the result 
of stirring a hornets' nest on the substantial left-wing of 
the party. 
 
¶16.  (SBU) Most Austrians like Grand Coalitions.  They are 
comfortable with the idea of broad consensus, even at the 
expense of effectiveness.  For all the water that has gone 
under the bridge since 2000, may Austrians still see 
Black-Red as a "natural" government.  Some observers question 
whether Gusenbauer could stand playing second fiddle to 
Schuessel.  Others point out that Gusenbauer spent most of 
his political career under Grand Coalitions.  It is not so 
much Gusenbauer as Schuessel who would chafe at this 
configuration.  Schuessel values his freedom of action, 
especially on foreign policy.  He would not relish having to 
share significant executive power with a major party. 
Erhardt Busek, the former OVP Vice Chancellor under Vranitzky 
told us recently that the problem with Grand Coalitions in 
Austria is that it is hard to make progress except at the 
level of the lowest common denominator. 
 
------------------------------------- 
What Does It Mean for U.S. Interests? 
------------------------------------- 
 
¶17.  (SBU) Interestingly for Schuessel, a former Foreign 
Minister who takes personal charge of the foreign affairs 
portfolio, foreign policy has been practically invisible 
during the current campaign.  Iraq, Iran, the fight against 
terrorism, the spread of democracy in Eastern Europe -- none 
of these issues has made it to any party's campaign material. 
 Of course, Strache's FPO has highlighted the fear of Turkish 
 
VIENNA 00002787  004.2 OF 004 
 
 
entry into the EU (with posters showing St. Stephen's 
Cathedral replaced by Hagia Sophia).  He has also taken a 
swipe at the EU, calling for "Homeland instead of Schuessel 
and Brussels."  But there is no depth beyond fear-mongering, 
and the other parties have practically ignored the issue. 
 
¶18.  (SBU) Unless a foreign policy issue arises in the next 
two weeks -- always a possibility, of course -- the impact of 
the upcoming election on Austrian foreign policy will be 
largely a matter of personalities.  Even if Schuessel retains 
the Chancellorship -- and he is the odds-on favorite -- it is 
hard to see how he could avoid turning the Foreign Ministry 
over to a Green or SPO coalition partner.  (Naturally, if the 
BZO manages to enter parliament and the OVP does well enough 
to form a coalition with its current partner, things would 
continue much as they are.  But even Vice Chancellor Hubert 
Gorbach, the BZO Transportation Minister, has already lined 
up a private sector job -- or so we hear.)  With van der 
Bellen or Gusenbauer as Foreign Minister, Austrian foreign 
policy would probably hew even more closely to the narrow 
constraints of the coalition agreement establishing the 
government.  This would make it even less likely than it is 
now that Austria would join bold new initiatives in the 
world.  Nevertheless, there still remains a solid cadre of 
officials with SPO affiliations in government service, 
including in the Foreign, Interior and Defense Ministries. 
(Austrian Ambassador to Washington Eva Nowotny is one.)  We 
have worked well with such officials in the fields of law 
enforcement cooperation, for instance, as well as other 
areas.  These individuals further increase the likelihood 
that continuity will be the watchword in foreign policy, 
regardless of who leads the next Austrian government. 
McCaw