Austria’s Populist Puzzle

For many international observers, Austria’s flirtation with right-wing populism is something of a puzzle. Austria is one of the European Union's most prosperous countries and has long been a model of political and social stability. It has an efficient government, excellent public infrastructure, and generally low unemployment and crime rates. And although Austrians could once be faulted for their unwillingness to confront their nation’s culpability for Nazism and the Holocaust, that too has changed in recent years, as public awareness of the country’s role in both of those tragedies has deepened.

Nevertheless, over the past three decades, radical right-wing populism has been more electorally successful in Austria than perhaps anywhere else in western Europe. On December 4, in Austria’s presidential election, voters delivered a clear victory to Alexander Van der Bellen, the former head of the left-wing Greens. Yet Norbert Hofer, the candidate of the right-wing populist Austrian Freedom Party, won some 46 percent of the vote, not only setting a new record for his party but also securing more support than any other western European right-wing populist group has ever achieved in a national election.

Hofer’s defeat seemed to break a winning streak for populist and antiestablishment forces that has roiled the West over the past year. But if Austria’s mainstream parties want to keep the Freedom Party from another strong showing in the next parliamentary election, they need to overcome the deadlock that has prevented them from introducing reforms so that they can stimulate the economy, combat unemployment, and get a handle on Austria's refugee and immigration policy.

FROM POLITICAL INTEGRATION TO SOCIAL EROSION

Austria is governed by a parliamentary coalition comprising the center-left Social Democrats and the center-conservative People’s Party. These two parties and their immediate predecessors founded the Austrian Republic in 1918, presided over its reconstitution after World War II, and have ruled ever since, mostly through grand coalitions.

In recent decades, the combined vote share of the Social Democrats and People’s Party has plummeted, from 91 percent in 1983 to about 50 percent in 2013. As those parties’ popularity waned, the Freedom Party’s growing strength and its political radicalism have often left the two mainstream parties no alternative but to continue their awkward coalitions with each other. This, in turn, has intensified the public’s desire for change. (In 2000, the People’s Party tried to break this cycle by forming a government with the Freedom Party, but the results were disastrous: the Freedom Party’s inclusion in the coalition provoked international outrage, the imposition of bilateral sanctions on Austrian officials, a loss for the People’s Party in the 2006 elections, and a sharp decline for the Freedom Party in the polls.)

Since both the Social Democrats and People’s Party are staunchly pro-European, they have received most of the blame for the negative consequences of European integration, beginning with the unpopular austerity measures and structural adjustments Austria undertook upon its accession to the EU in 1995. The influx of eastern European migrants that followed the EU’s enlargement around a decade later and the union’s various recent crises have further eroded popular support for the EU. As a result, Austria is now one of the bloc’s most Euroskeptical members.

European integration has eroded the social partnership that many Austrians credit with their prosperity.

In some respects, that fact reflects Austria’s historically ambivalent attitude toward Europe. Austria has long been fiercely committed to neutrality—a position that many Austrians consider the foundation of their country’s security and which helps explain why the country never joined the U.S.-led NATO alliance. For most of the postwar era, Austria also kept some distance from Western liberal capitalism, maintaining instead a system known as the “social partnership." Most Austrians credit that system, under which labor and capital cooperate over such issues as wage bargaining and business regulations within a government-supported framework, with their country’s prosperity and strong welfare state.

Over the past two decades, European integration has eroded both of these positions. Austria now participates in the European Union’s defense architecture, and European economic integration has exposed Austria to liberal market pressures and eroded some important aspects of its social partnership. The privatization of public enterprises and deregulatory pressure from Brussels have weakened the bargaining power of unions and increased the differences in wages and working conditions across industries.

At the same time, Austria’s membership in the EU’s single market has presented new economic opportunities, especially in central and eastern Europe, where Austria’s cultural know-how and historical ties have helped it become one of the region’s largest investors. But if the overall effects of EU membership were positive, they were also uneven. As Austria has become more prosperous, competitive, and culturally diverse, many blue-collar workers have lost their jobs, as have many Austrians without university degrees. Lower middle class Austrians and public sector workers have been hit by wage stagnation, and the cost of living, especially housing, has increased substantially.

Some 75 percent of Austrians were either angry with or disillusioned by their country’s politics in 2011, and the public’s lack of trust in Vienna appears not to have improved since then. Many in the country—not just those who support the Freedom Party—also believe that their government has mishandled the migrant crisis. Over the past two years, the government has vacillated on that issue, first denying that migration presented a challenge worthy of special attention, then shifting to a more welcoming policy akin to that of Germany, and finally taking a harder line—one closer to the Freedom Party’s—that will limit the number of asylum-seekers Austria accepts. That the country now faces uncharacteristically high levels of unemployment has made matters worse. The Freedom Party has managed to exploit all of these developments to its advantage.

THE BREXIT BACKLASH

Founded in 1956 by former Nazis and veterans of World War II, the Freedom Party languished for decades on Austria’s far-right fringe before transforming into a right-wing populist party under Jörg Haider, the group’s leader from 1986 until 2000. In recent decades, the party has campaigned on the idea that unaccountable and corrupt elites in Vienna and Brussels have failed to serve the Austrian people. It routinely portrays the country as threatened by mass immigration and violent crimes committed by foreigners. The Freedom Party advocates renationalizing issues now overseen by Brussels, such as the EU's freedom of movement policies, and supports transferring the responsibility for EU decision-making from supranational institutions to the bloc's member governments. In September, Heinz-Christian Strache, the party’s current chief, called for Austria to join the Visegrad group, an alliance of Euroskeptical states that includes the Czech Republic, Hungary, Poland, and Slovakia.

Strache turned the Freedom Party rightward, securing a new, younger following.

Strache took control of the Freedom Party in 2005. At the time, the party was a member of the governing coalition with the People’s Party and was on the verge of collapse because of an internal conflict between its more moderate leadership and its radical base. In an attempt to revive the party, Strache turned rightward. He harshly condemned the Austrian establishment and ramped up the party’s xenophobic and Islamophobic rhetoric, declaring Islam incompatible with Austrian culture and implying an intrinsic connection between Islam and terrorism. The pivot helped the Freedom Party secure a new, younger following, much of it male and poorly educated, and shore up the party’s base. Then, after a series of victories in regional and national elections in 2006 and 2008, the party sought to broaden its appeal and soften its image, putting up posters, for example, that called on Austrians to love their fellow citizens. In another instance, in 2014, the party forced its candidate for the European Parliament to withdraw from the race after he made a racist remark about a black Austrian soccer star. Strache also traveled to Israel several times in an effort to show that the party’s anti-Semitism was a thing of the past. Hofer was an ideal figure to continue the mainstreaming of the party: he was a mild-mannered candidate who only hinted at the kinds of changes that the Freedom Party’s victory would have brought.

Yet the Freedom Party lost anyway, due in part to a backlash in Austria against other recent populist victories in the West—particularly the United Kingdom’s June vote to leave the EU, or Brexit, and the election of Donald Trump to the U.S. presidency. The fact that support among Austrians for European integration rose after the Brexit vote suggests that this is the case, as did the Freedom Party’s efforts, toward the end of Hofer’s campaign, to downplay its Euroskepticism and calls for change. Trump’s election, meanwhile, may have unnerved some voters and helped propel Van der Bellen to victory.

MAINSTREAMED

In some respects, Hofer’s defeat was a major setback for the Freedom Party. The presidency is a largely ceremonial post, but it carries some important powers. Austrian presidents can formulate political goals, rally voters, conduct their own foreign policies through invitations and state visits, and pressure or embarrass the government by withholding their signature from international agreements. Presidents can dismiss the government at will, and the chancellor, who leads the government, requires the president’s approval to be appointed. Winning the election would have allowed Hofer to undermine Austria’s fragile coalition government and sabotage its pro-European foreign policy.

The upside for the Freedom Party is that its loss may improve its chances in the next parliamentary elections, which are expected to be held by 2018. The party’s current position should let it run as an outsider against the broad alliance of establishment forces that rallied behind Van der Bellen, especially since it stands far ahead of other parties in national opinion polls. In five of Austria’s nine states, surveys suggest that the Freedom Party is either the most or second-most popular party.

Whether Austrians’ desire for change or their fear of instability will prevail in the next election remains to be seen. In the meantime, the government has to deliver a series of reforms that will stimulate the economy, lower annual deficits, reduce the tax burden on wages, and improve the school system. Above all, it must present a comprehensive strategy for the integration of asylum-seekers. The mainstream parties’ success is likely also to depend on the political performance of two figures who recently entered the political arena: Christian Kern, Austria’s new Social Democratic chancellor, who is far more popular than any other party leader in the country; and Sebastian Kurz, the talented 30-year-old foreign minister from the Austrian People's Party, who is the country's most popular political figure and may soon take the helm of his own party. Both Kern and Kurz have suggested that they may be willing to push their respective parties toward cooperating with the Freedom Party. They have taken positions that resonate with Freedom Party voters, vowing, for example, to block Turkey’s accession to the EU. For the first time since the 1980s, then, the Social Democrats, the Freedom Party, and the People's Party are all potential coalition partners for one another—despite Norbert Hofer's loss.