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INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 03 VIENNA 002941 
 
SIPDIS 
 
C O R R E C T E D  C O P Y - CHANGED PRECEDENCE 
 
SIPDIS 
 
DEPARTMENT FOR EUR/AGS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL AU
SUBJECT:  Austria's October 1 Election Surprise:  People's Party 
(OVP) Falls Badly, Schuessel Likely to Lose Chancellorship 
 
REFS: (a) Vienna 2787, (b) Vienna 2924 
 
VIENNA 00002941  001.8 OF 003 
 
 
¶1.  Summary:  Chancellor Wolfgang Schuessel's Austrian People's 
Party (OVP) suffered a stinging defeat at the polls on October 1. 
Contrary to every pollster's and analyst's expectations (and ours as 
well), Schuessel's party plummeted 8 points to second place.  The 
opposition Social Democratic Party (SPO) also actually did worse 
than in the last elections, ending up on the low end of pundits' 
predictions.  But what matters is that the SPO is the strongest 
party, and will have the first shot at forming the next government 
and thereby claiming the Chancellorship.  The most likely result is 
a return to a grand coalition (SPO-OVP).  At the moment, the only 
other mathematical possibility -- one Schuessel has publicly ruled 
out -- is an OVP coalition with its current partner, the 
Alliance-Future-Austria (BZO), and the far right Freedom Party 
(FPO).  Absentee ballots could conceivably open the door to a 
Red-Green coalition, but the count will not be available for at 
least a week.  End Summary. 
 
-------------- 
By the Numbers 
-------------- 
 
Party -- Percentage of Votes  2006   2002 
----------------------------  ----   ---- 
 
People's Party (OVP)   34.2   42.30 
Social Democratic Party (SPO)  35.7   36.51 
Freedom Party (FPO)    11.2   10.01 
Greens      10.5    9.47 
Alliance-Future-Austria (BZO)   4.2    n/a 
Hans-Peter Martin     2.8    n/a 
Communist Party (KPO)    1.0    0.56 
Other       0.3 
 
Turnout:  74.2 percent of registered voters (2002:  85 percent). 
 
Party -- Parliamentary Seats  2006   2002 
----------------------------  ----   ---- 
 
(Necessary for majority:  92) 
People's Party (OVP)   66   79 
Social Democratic Party (SPO)  68   69 
Freedom Party (FPO)    21  (see below) 
Greens      20   17 
Alliance-Future-Austria (BZO)   8  (see below) 
Hans-Peter Martin     0   n/a 
Communist Party (KPO)    0    0 
Other       0    0 
 
(Note:  In 2002, the FPO won 18 seats in parliament.  When the BZO 
split off of the party, 16 members of the FPO caucus joined the new 
party, while two remained with Heinz-Christian Strache's FPO.  End 
note.) 
 
---------------------------- 
The Only Poll That Counts... 
---------------------------- 
 
¶2.  Austria's voters dealt a severe and unexpected blow to 
Chancellor Wolfgang Schuessel in national elections on October 1. 
After having held a clear and commanding lead in opinion polls 
throughout the campaign, Schuessel's conservative Austrian People's 
Party (OVP) fell far below the level even his opponents had hoped to 
see.  From predictions (ref b, for example) of a 38-40 percent 
showing, support for the OVP dropped to just 34.2 percent in the 
only poll that counts the election. 
 
¶3.  The tallies for the other parties were more or less what 
prognosticators had expected, except for the BZO, which appears to 
have cleared the 4 percent threshold to enter parliament.  The 
Social Democratic Party (SPO) even lost support from its 2002 
showing, coming in at 35.7 percent -- rather at the low end of 
pre-election forecasts.  But it was enough to give the SPO and its 
chief, Alfred Gusenbauer, the unalloyed thrill of a first place 
finish. 
 
¶4.  The FPO and Greens both came in at the high end of what most had 
predicted.  As it had in 2002, the FPO emerged as the third-largest 
party, winning 11.0 percent of the vote.  The Greens, with 10.5 
percent, achieved their best result ever in an Austrian national 
election. 
 
¶5.  Apart from the OVP's tumble, the biggest and most significant 
surprise came from the "Alliance-Future-Austria" (BZO).  Joerg 
Haider's "chip off the FPO" appears to have barely crossed the four 
percent threshhold necessary to enter parliament.  The protest party 
of SPO renegade Hans-Peter Martin faded, taking only 2.8 percent and 
falling short of a parliamentary mandate. 
 
 
VIENNA 00002941  002.6 OF 003 
 
 
¶6.  Given these results, every party except the OVP (and Hans-Pater 
Martin) was more or less jubilant on the night of the elections. 
There were some pointed barbs thrown at prognosticators.  As BZO 
floor leader Herbert Scheibner put it, "you might as well have hired 
a fortune teller with a crystal ball." 
 
--------------------------------- 
Now What?  Chancellor Gusenbauer? 
--------------------------------- 
 
¶7.  As all political analysts (including us) wipe the egg off their 
faces, we are able to see fairly clearly what the vote totals mean 
for the distribution of seats in parliament.  While the SPO's 
strength dropped by a seat to 68, the OVP dropped 13 seats.  If 
these circumstances hold through the final tally, with the magic 
number for a majority at 92, the only possibility of a two-party 
coalition would be a Grand Coalition. (Note:  As we discuss below, a 
three-party right wing coalition remains mathematically possible. 
End note.) 
 
¶8.  The time frame for coalition formation is a long one.  The next 
meeting of parliament, and therefore the first chance to form a new 
government, is October 30.  However, in election night musings, 
Gusenbauer said he thought the process would take about six weeks. 
Schuessel thought it would take longer. 
 
¶9.  Austrian Federal President Heinz Fischer presumably will offer 
the chance to form a coalition to the leader of the party with the 
most votes -- that is, Alfred Gusenbauer.  Gusenbauer said on 
election night that he would start by seeking to form a SPO-OVP 
Grand Coalition, with himself as Chancellor.  Most observers think 
the OVP would want the Foreign Ministry.  That is all that is 
currently clear (or at least, less murky).  The SPO has already laid 
down a marker:  party manager Norbert Darabos said on election 
night, referring to the OVP, "when you lose seven or eight percent, 
you have to be reasonable." 
 
¶10.  It is not at all clear what happens to Chancellor Schuessel. 
Having fallen to a figure -- 34 percent -- that would probably have 
gotten Gusenbauer fired, and having started with much higher 
expectations than Gusenbauer did, Schuessel is already facing 
questions as to whether he will retain his position as OVP party 
leader.  In the immediate aftermath of the election, leading OVP 
figures such as governors Erwin  Proell (Lower Austria) and Herwig 
van Staa (Tirol) could only say that they "hoped (Schuessel) would 
be able" to remain party leader.  For his part, Schuessel would not 
commit himself on election night, saying only that he would "sleep 
on it."  To have to return to his pre-2000 job as Foreign Minister 
under an SPO Chancellor would indeed be a bitter pill for Schuessel 
to swallow.  OVP parliamentary caucus leader Wilhelm Molterer has 
long been the subject of speculation as a party leader who could 
pick up the pieces if Schuessel had to leave the scene, and the job 
could now fall to him. 
 
¶11.  Conceivably, Schuessel may not even get the choice.  The 
counting of an estimated 242,000 absentee ballots will take place 
over the coming week.  This number is large enough that it could 
possibly pull the BZO below the four percent mark, thereby throwing 
their eight seats back for redistribution among the other parties. 
In that case, it might be numerically possible for the SPO to form a 
coalition with the Greens -- clearly the preference of both those 
parties.  However, Gusenbauer has expressed doubt at the wisdom of 
working with such a razor-thin majority. 
 
¶12.  There is, of course, another possibility, although an 
improbable one:  A right-wing OVP-FPO-BZO coalition led by 
Schuessel.  Schuessel, however, declared on election eve that he 
would not form a coalition with the anti-EU, xenophobic FPO.  What 
is more, the FPO and the BZO have all the baggage of a bad divorce. 
Nevertheless, this coalition would be mathematically possible if the 
OVP were able to deny a parliamentary majority to any government the 
SPO could form.  The OVP would also have to convince the two smaller 
parties to get back into bed together.  It is hard to see anyone in 
the OVP but Schuessel as having the political skills to bring this 
about, and Schuessel is now dealing from a position of weakness. 
 
----------------- 
So What Happened? 
----------------- 
 
¶13.  The shocker in the election news was the OVP's slide.  The 
other parties, including the SPO, did more or less as forecast. 
There was no radical turn to the protest parties.  Instead, the drop 
in OVP support showed up as marginal gains for the smaller parties. 
 
¶14.  No one in Austria is yet in a position to analyze seriously the 
OVP's failure to maintain its pre-election position.  Speculation 
abounds, of course, tending to support the position of the person 
making the analysis.  The SPO described the results as a 
confirmation of the SPO call for economic and social "fairness." 
 
VIENNA 00002941  003.6 OF 003 
 
 
They also see in the results a public acceptance of Gusenbauer. 
However, one must remember that support for the SPO also declined 
from the last election.  In fact, the SPO experienced one of its 
worst showings since the Second World War. 
 
¶15.  On election night, Schuessel cited low voter turnout as a key 
factor.  In 2006, the voter participation figure was ten points 
lower than it was in 2002, and, at 74.2 percent of registered 
voters, was the lowest since the formation of the Second Republic in 
¶1955.  Election-day polls indicated that this may have hurt the OVP 
disproportionately.  A large part of the number of those who stayed 
at home consisted of OVP sympathizers.  OVP leaders also blamed 
negative SPO campaigning against Schuessel personally.  These may 
have been factors, but it was the OVP itself that banked on 
Schuessel's personal popularity.  The OVP campaign was virtually 
devoid of issues, assuming that voters agreed that the country's 
economic situation was solid and that the BAWAG scandal would 
prevent a return of SPO support on the margins.  The SPO's last 
minute attempt to associate Schuessel with BAWAG's former executives 
may have mobilized the SPO's core constituency. 
 
¶16.  What we may have seen is the basic personal conservatism of 
Austrian voters.  Essentially, the parties placed where one would 
have expected them to end up if one had focused solely on party 
membership and on historic (decades-long) performance.  What this 
election may therefore demonstrate is that Austria is not ready for 
election campaigns that sell personalities and not parties. 
 
McCaw