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Austria's Kurz back in power with Greens after far-right fiasco

VIENNA (Reuters) - Austrian conservative Sebastian Kurz returned to power on Tuesday as his coalition cabinet with the Greens was sworn in almost eight months after his alliance with the far right collapsed in the wake of a video sting.

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The about-face was a political necessity for the 33-year-old, who emerged relatively unscathed and even gained voters after the scandal in which far right leader Heinz-Christian Strache was shown offering to fix government contracts at a dinner party in Ibiza.

With the far right in disarray after Strache’s resignation, Kurz has formed an awkward alliance with the left-wing Greens, who long railed against his hard line on immigration and “political Islam”. They have struck a coalition deal that twins many of those policies and tax cuts with environmental measures.

“After Ibiza ... and the parliamentary election in autumn, the circle is now closing,” President Alexander Van der Bellen, a former Greens leader, said as he swore in the new cabinet, who did not give speeches. “The carefully rebuilt (public) trust must now be strengthened.”

Austria joins Sweden and Finland in having the Greens in government at a time of growing calls for urgent action on climate change.

In contrast to those fellow European Union member states, Austria’s Greens are not governing with the center-left, making this an interesting test case. German Chancellor Angela Merkel’s conservatives could opt for a similar coalition after an election due by next year.

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Whether the Austrian experiment can last five years until the next scheduled election is likely to depend on whether the Greens can show supporters they obtained enough concrete results from their alliance with an ideological adversary.

Kurz’s People’s Party (OVP) and the Greens have carved up ministries roughly in proportion to their scores in the Sept. 29 parliamentary election, which the OVP won with 37.5% of votes. The Greens came fourth on 13.9%. The OVP will control ministries including finance, interior and defense.

The Greens are in government for the first time.

Many Greens have, however, baulked at measures in the deal including extending a ban on headscarves in schools until the age of 14 and preventive custody for people deemed a threat to public order but who have yet to commit a crime. It also defers a tax overhaul to better price in carbon emissions until 2022.

Asked by ORF radio if that timeline was too slow given the wildfires in Australia, Kurz said: “I do not think it is a good idea to turn Austrian politics on its head because of bush fires in Australia.” He has said tax cuts are his priority this year.

Reporting by Francois Murphy; Editing by Andrew Cawthorne