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DE RUEHVI #3202/01 3041641
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P 311641Z OCT 06
FM AMEMBASSY VIENNA
TO RUEHC/SECSTATE WASHDC PRIORITY 5387
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 VIENNA 003202 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE FOR EUR/AGS - SAINT-ANDRE 
 
E.O. 12958: N/A 
TAGS: PGOV PREL MARR AU
SUBJECT: AUSTRIAN ELECTION FOLLOW-UP:  NEW PARLIAMENT 
MEETS, BUT CONSERVATIVES SUSPEND COALITION TALKS 
 
REF: A. VIENNA 3022 
 
     ¶B. VIENNA 2941 AND PREVIOUS 
 
This message is sensitive but unclassified.  Please handle 
accordingly. 
 
¶1.  (SBU) Summary:  The new Austrian parliament met for the 
first time on October 30.  As is traditional, the parliament 
voted members of the top three parties -- the Social 
Democratic Party (SPO), the People's Party (OVP) and the 
Greens -- to the three parliamentary leadership positions. 
Of considerably more interest was the decision of the SPO, 
Greens and the far-right Freedom Party (FPO) to vote for a 
parliamentary commission of enquiry into the Schuessel 
government's 2002 decision to purchase Eurofighters.  The 
commission would also look into banking issues, including the 
relationship of Raiffeisen bank with the Russian-Ukrainian 
RosUkrEnergo consortium.  The OVP had strongly objected to 
the idea of the commission; as a result of its formation, the 
party announced yesterday that it would break off coalition 
talks toward forming a government with the SPO.  In the end, 
the SPO and OVP will probably have to come back to each 
other, but the political mood -- already sour -- is now 
considerably worse.  End Summary. 
 
--------------------------------- 
New Parliament Kicks Off Term ... 
--------------------------------- 
 
¶2.  (SBU) Austria's new parliament constituted itself on 
October 30.  The members, who took their seats as a result of 
the October 1 national elections (ref b), chose their 
parliamentary leadership according to long-standing 
tradition.  The Social Democratic Party (SPO), as the party 
with the most seats in parliament, took the slot as First 
Parliamentary President.  Barbara Prammer, who has been 
Second Parliamentary President since 2004, is now in the 
senior job.  The conservative People's Party (OVP), with the 
second-most seats, filled the Second Parliamentary 
President's slot with former party foreign policy expert 
Michael Spindelegger.  The third-place Greens occupied the 
Third Parliamentary President's position with former deputy 
party leader Eva Glawischnig.  The parliamentary leadership 
is supposed to play an almost non-partisan role in managing 
the body's business.  The parliamentary presidents, and 
especially the First Parliamentary President, can also take 
on important functions on policy issues on which there is 
agreement across parties.  For example, former First 
Parliamentary President Andras Khol managed the 
implementation of U.S.-Austrian agreements on Holocaust 
restitution. 
 
--------------------------------------------- -- 
... and Kicks Out on Eurofighters and Banks ... 
--------------------------------------------- -- 
 
¶3.  (SBU) Of more immediate political significance was 
another parliamentary action:  the SPO, Greens and (somewhat 
surprisingy) the far-right Freedom Party (FPO) agreed to 
support the formation of a parliamentary committee of enquiry 
into the GoA's 2002 decision to purchase the Eurofighter as 
Austria's next-generation supersonic fighter aircraft.  The 
SPO and Greens have long complained that the government had 
paid too much for too little.  They have also charged that a 
large percentage of the offsets in the deal (economic 
benefits for Austrian companies, which were supposed to 
amount to 200 percent of the purchase price of over two 
billion Euros) existed on paper only, and did not really 
constitute new investment.  Having called for so long for an 
investigation into the deal, many SPO and Green 
parliamentarians considered it natural that this be one of 
the first orders of business in the new parliament. 
 
¶4.  (SBU) Also of interest is the decision of the new 
parliament to include banking scandals to the areas of 
competence of the investigatory committee.  This apparently 
includes an enquiry into public allegations that the Austrian 
banking giant Raiffeisen was working with possible 
representatives of organized crime in the context of its 
trusteeship over the Russian-Ukrainian energy consortium 
"RosUkrEnergo."  However, this had not appeared as an issue 
during the September 2006 election campaign. 
 
----------------------------------- 
... So Conservatives Walk (for now) 
----------------------------------- 
 
¶5.  (SBU) Chancellor Wolfgang Schuessel, the OVP's lead 
coalition negotiator, had warned that his party would 
 
VIENNA 00003202  002 OF 002 
 
 
consider the formation of a committee of enquiry to be a 
"breach of trust," and said he would not continue coalition 
negotiations with the SPO under these circumstances.  Once 
the new parliament acted as it did, the OVP was in something 
of a corner.  The OVP leadership held a crisis meeting on the 
evening of October 30.  The lights blazed at OVP headquarters 
until the wee hours, when Schuessel emerged to announce that 
the OVP had decided to break off negotiations on a coalition 
government.  SPO head Alfred Gusenbauer had a mandate to form 
a stable coalition, Schuessel said, and he could do it with 
the Greens and FPO. 
 
¶6.  (SBU) The SPO reacted with annoyance.  Party Secretary 
General Norbert Darabos called for the resignation of 
Schuessel's caretaker government.  However, Darabos said 
nonetheless that the SPO remained ready for further 
negotiations.  Gusenbauer and his team went to their 
scheduled negotiating session -- but the OVP stood them up. 
 
---------------------------------------- 
President Fischer Tries to Close the Gap 
---------------------------------------- 
 
¶7.  (SBU) Austrian President Heinz Fischer, who had given 
Gusenbauer the mandate to form a government, has worked 
actively to bring the SPO and OVP back to the table.  Fischer 
has declared his view that the election results constituted a 
mandate for a Grand Coalition, and will continue to work 
toward this end. 
 
--------------------------- 
The Far Right Flexes Muscle 
--------------------------- 
 
¶8.  (SBU) The FPO's role is interesting.  Before the current 
FPO and Joerg Haider's "Alliance-Future-Austria" (BZO) split 
up, the "original" FPO had cooperated with the OVP in passing 
the Eurofighter deal in parliament.  However, most of the FPO 
personalities who supported the deal then jumped to the BZO. 
In this case, the FPO was able to take a stand on principle, 
and smack party "traitors" at the same time. 
 
¶9.  (SBU) The FPO and BZO together received almost 15 percent 
of the vote in the October 1 election.  This is a good -- but 
not spectacular -- result for a portion of the political 
spectrum that reached a high-water mark of 27 percent in the 
1999 election.  Fears that immigration will cost Austrians 
jobs or will change Austrian culture, concerns about law and 
order, and the personal popularity of party leaders probably 
account for most of the two parties' support.  More extreme 
views, however, undoubtedly motivate some FPO/BZO voters. 
 
¶10.  (SBU) The October 30 parliamentary action showed that 
the rightist parties do not represent a common front.  Far 
from it:  in the first major action of the new parliament, 
the two parties took opposite sides of the debate. 
 
------- 
Comment 
------- 
 
¶11.  (SBU) Schuessel and his party colleagues have a point: 
if the SPO is really working toward building a coalition 
government, which is essentially a matter of cementing a 
stable parliamentary majority, how could its first act in the 
new parliament be the formation of a competing coalition? 
Both Schuessel and Gusenbauer, however, have few options 
apart from each other.  Schuessel knows that Gusenbauer 
cannot form a government with the FPO -- the SPO rank and 
file would never allow it.  Schuessel is probably in a better 
position to form a coalition with the FPO than Gusenbauer is 
-- but now that the FPO has cooperated with the SPO in doing 
him wrong, could Schuessel really take that step? 
McCaw