VZCZCXRO2555
PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHVI #3354/01 3211731
ZNR UUUUU ZZH
P 171731Z NOV 06
FM AMEMBASSY VIENNA
TO RUEHC/SECSTATE WASHDC PRIORITY 5574
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 VIENNA 003354 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE FOR EUR/AGS - SAINT-ANDRE 
 
E.O. 12958: N/A 
TAGS: PGOV PREL MARR AU
SUBJECT: AUSTRIAN GOVERNMENT COALITION TALKS:  "NOT YET 
DEAD" 
 
REF: VIENNA 3202 AND PREVIOUS 
 
 ¶1.  (SBU) Summary:  Although observers in Austria keep 
pronouncing negotiations toward a Grand Coalition as dead, 
like a bad movie,they keep springing back from the grave to 
argue the matter.  Two and a half weeks after the 
conservative People's Party (OVP) walked out on coalition 
talks with the Social Democrats (SPO), the two parties have 
now resumed their negotiations.  There is a long way to go, 
howver, before one could describe the Grand Coalition as a 
done deal.  Recent talk of an SPO minority government has 
caught people's attention in Vienna.  At the same time, all 
agree that a minority government could not possibly last 
long.  Early elections -- especially after less than a year 
-- would not be at all popular in Austria.  The two large 
parties would likely be the ones to pay under that scenario. 
The winners would probably be the protest parties, including 
the Freedom Party (FPO).  End Summary. 
 
--------------------------------------------- ------------ 
"We are Not Yet Dead -- That's the Best that Can be Said" 
--------------------------------------------- ------------ 
 
¶2.  (SBU) Like the geezer in "Spamalot" (the Broadway version 
of the iconic movie "Monty Python and the Holy Grail"), the 
prospect of forming a Grand Coalition government between the 
Social Democratic Party (SPO) and the conservative People's 
Party (OVP) just won't stay dead.  It has been seven weeks 
since national parliamentary elections returned results 
which, to most people, left a Grand Coalition as the only 
logical choice.  But it took all of one day -- October 31, 
when the new parliament sat for the first time -- to put the 
talks into a deep freeze (reftel).  The SPO decided to form 
common cause with the Greens and the right-wing Freedom Party 
(FPO) to form parliamentary committees to investigate the 
government's decision to purchase Eurofighters and to look 
into allegations of shady bank operations.  This was directly 
contrary to the specific wishes of the OVP.  An infuriated 
OVP responded that it would not engage in further coalition 
talks until the committees finished their business -- 
processes that usually take years. 
 
¶3.  (SBU) There it has stood, with much harrumphing, for the 
past two and a half weeks.  Naturally, each side made 
declarations -- to no one in particular, but loud enough for 
the other to hear -- that there were, of course, other 
parties out there with whom they could hook up.  The fact 
that there was no likely coalition whose parliamentary 
strength added up to a majority did not stop the speculation. 
 However, it was clear that any constellation other than a 
Grand Coalition would simply have to include both Greens and 
FPO, and it would take more than a shotgun to get those two 
together.  Lately, the SPO had been musing aloud that maybe 
it should have just gone it alone, forming a minority 
government.  The press has dutifully reported long, 
speculative lists of possible ministers in such a government. 
 However, the fact remains that a minority government needs 
to survive at least one vote of confidence in parliament, and 
such formations usually need the tacit support of like-minded 
parties. 
 
¶4.  (SBU) Federal President Heinz Fischer has worked hard to 
bring the two back together.  He has held several private 
meetings between SPO head and presumptive Chancellor Alfred 
Gusenbauer, and OVP leader and still Chancellor Wolfgang 
Schuessel. 
 
--------------------------------------------- 
Can't Live With Them, Can't Live Without Them 
--------------------------------------------- 
 
¶5.  (SBU) Fischer's patient efforts seem to have paid off. 
On November 16, the OVP leadership met to decide what to do 
next.  The result was a decision to give the SPO another 
chance, but only on conditions.  First, the parties would 
pledge not to vote against each other in parliament, as long 
as they were talking about forming a goverment together. 
Second, the SPO would acknowlege the need for an air defense 
capability (a reference to the Eurofighter commission). 
Third, the SPO would not violate bank secrecy provisions in 
the banking commission. 
 
¶6.  (SBU) The SPO reacted with some pique, with parliamentary 
floor leader Josef Cap rejecting conditions.  However, 
Gusenbauer and Schuessel met again, and this time, they held 
a press conference to announce the resumption of talks. 
 
---------------------------------------- 
Hold Your Breath -- Until You Turn Blue? 
 
VIENNA 00003354  002 OF 002 
 
 
---------------------------------------- 
 
¶7.  (SBU) This is still just the beginning of the process, 
not the end.  There is a lot of detail work for the 
representatives of the two parties to undertake in order to 
form a government, and they have lost over two weeks while 
carrying on their spat.  What is more, it is not at all 
certain that they will be successful in the end.  The more 
people have talked about the prospect of an SPO minority 
government, the more realistic it has seemed to be. 
 
¶8.  (SBU) At the same time, everyone believes that a minority 
government cannot last long.  One need not think long to come 
up with important issues on which the Social Democrats will 
be unable to win a majority in parliament.  Neither 
Red-Green-Black nor Red-Green-Blue (the FPO) is very stable. 
That means that a consequence of a minority government is the 
prospect of elections in the short term. 
 
¶9.  (SBU) The Austrian public has made clear that it does not 
like the prospect of early elections.  The party that gets 
the blame for provoking them would almost certainly suffer in 
the polls -- and at the moment, it looks like the public 
would blame both the red (SPO) and black (OVP).  The winners 
in this scenario would be Green and blue (FPO). 
MCCAW