Austria's biggest parties agree coalition talks
VIENNA (Reuters) - Leaders of Austria's two biggest parties on Monday agreed to discuss forming a new government after the pro-Europe coalition partners stumbled last month to their worst election results since the Second World War.
Chancellor Werner Faymann's Social Democrats (SPO) and their conservative People's Party (OVP) allies, in power together since 2006, remain the largest parties in parliament ahead of the euroskeptic and anti-immigrant Freedom Party (FPO).
Austrian voters showed their dissatisfaction in the election by awarding more than a fifth of the seats in parliament to the FPO.
Faymann told reporters the two main parties will begin preliminary talks on Tuesday.
A poll published on Monday showed three quarters of Austrian voters, weary of the squabbling and policy paralysis that marred the outgoing SPO-OVP coalition, want them to include a third partner in a new coalition.
The Market poll for newspaper Der Standard showed only 11 percent of voters favor a repeat of the SPO-OVP coalition with varying levels of support for possible three-party alliances. The most popular, at 9 percent, was a tie-up between the two main parties and the environmentalist Greens.
Neither of the two big parties has backed the idea of voluntarily bringing in a third coalition partner.
Faymann has ruled out a coalition with the FPO, ignoring calls from some Social Democrats to explore an opening to a party which is attracting more blue-collar voters and wants to hike taxes on the rich to help lower-income Austrians.
Faymann has made clear he wants a deal only with the conservatives, while OVP leader Michael Spindelegger has refused to be pinned down. His party is exploring all its options, including leading a center-right coalition.
Analysts say a center-right alliance is a long shot, given the calls by the FPO and a new party led by Austro-Canadian industrialist Frank Stronach to break up the euro and end bailouts of euro zone laggards such as Greece and Portugal.
(Reporting by Michael Shields, editing by Gareth Jones/Ruth Pitchford)