Far right surge poses dilemma for Austria's centre
VIENNA (Reuters) - A surge in support for the far right poses a dilemma for Austria's main parties -- how to form a government without repeating an unpopular centrist coalition which drove voters toward the far right in the first place.
The two centrist parties plummeted to their worst results since World War Two in Sunday's poll, hit by voter frustration over their government squabbles and concern at a looming economic downturn, inflation and immigration.
The far right Freedom Party and splinter Alliance for Austria's Future, led by former Freedom leader Joerg Haider, mopped up nearly a third of votes between them.
"Voters were clearly motivated by disgruntlement with the government due to their lengthy disputes," political commentator Peter Filzmaier told Austrian radio.
Social Democrat Werner Faymann, whose party lost ground but still won the most votes, prefers forming a broad left-right coalition. But that would be a reprise of the last government -- branded a "coalition of the losers" by the opposition.
Opinion polls suggest this option has gone from being the most popular to the most despised among voters. Faymann has ruled out any coalition with the far right.
The conservative People's Party, despite being the main losers in the election, may actually be able to come out on top. They have not ruled out a coalition with the rightists since the vote, leaving them in a stronger bargaining position.
"A coalition with Freedom and Alliance has become more likely for the conservatives now they are in second place -- their goal is the chancellorship," Filzmaier told Reuters.
COALITION WITH FAR RIGHT?
"A grand coalition is not a good option for the People's Party," said Peter Pulzer, Austrian politics expert at Oxford University. "They can now say to the Social Democrats: 'There are other beds waiting for us to lie in'."
Analysts say that a conservative coalition with the far right would be divisive both internally and externally.
Freedom Party's first stint in government so shocked the European Union in 2000 that it briefly shunned Austria, but it has become part of the political landscape and most voters do not want it barred from a coalition should it seek one.
However, the two far-right parties cannot be counted as a bloc, with significant foreign policy and economic differences as well as personality clashes.
In addition to concerns over their policies, Austria's far right politicians are perceived by the bigger parties as unreliable and inexperienced, said Richard Luther, an expert on the far right at Britain's Keele University.
"But power suddenly becomes very interesting," he added, referring to potential cooperation between far right parties.
Talks about a conservative-led coalition with the far-right could start behind the scenes, like in 1999, which led to a right-wing coalition that ruled for seven years.
Surveys before the election showed 40 percent of voters doubted any party could address their worries, as Austrians grow disillusioned with politics.
Economic worries rated as a top concern, but over half of voters also said deporting convicted asylum seekers was also a priority, according to a poll by market research group GfK, in which 40 percent of participants also backed lower immigration.
While the ruling conservatives and Social Democrats bickered over everything from health reform to graft allegations to EU policy, Austrian inflation surged to its highest level in 15 years in June to 3.9 percent and is still hitting consumers.
The Freedom Party, which has called for a halt immigration and a ministry for repatriating foreigners, led an energetic, youth-focused campaign focused on income worries as well as traditional right-wing issues.
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