Key Challenges

If the Austrian government’s overall performance is to improve, the government must examine and debate specific institutional and policy features more thoroughly.
Central executive should be strengthened
From an institutional perspective, strengthening the authority of the central executive could significantly improve government efficiency. Within Austria’s parliamentary system, this would involve the Federal Chancellery, not the Office of the Federal President. It could also imply strengthening the party of the chancellor – a move not in the interest of any coalition partner. In either case, it would certainly require shifting power from the state (Länder) governments to the federal government.
President plays a key role
Despite the chancellor’s (actual and potentially more significant future) role, the authority of the federal president became more evident in summer 2019. After the fall of the Kurz government, it was up to the directly elected president to negotiate the formation of a new government (cabinet) and secure its acceptance by an overwhelming majority in parliament. President Van der Bellen succeeded, because this cabinet was (informally) defined from the beginning as an interim government – consisting of persons not directly affiliated with political parties. The events of summer 2019 have underlined the federal president’s “reserve power.”
Traditional party system fragmenting
The fragmentation of the party system since the 1980s seemed to have stopped in 2017, when all three major parties (ÖVP, FPÖ and SPÖ) won votes, especially the ÖVP. However, this was not the case in 2019. Deconcentration of the party system was again the most visible factor – the ÖVP’s wins were less than the (combined) losses of the SPÖ and FPÖ. It remains to be seen whether any kind of realignment in the party system can replace the overall trend toward fragmentation and decentralization.
Swiss model could improve stability
A specific strategic option to improve the response to new challenges would be to follow the Swiss model: To legally establish a permanent coalition of all major parties with significant improvements for direct voter participation. A permanent coalition would guarantee government stability, while greater direct participation would provide the possibility to correct decisions made by a cartel-like government structure.
Better opposition monitoring powers needed
For its part, the parliament’s effectiveness could be improved by giving the opposition greater powers to monitor government activities. With the exception of a vote of confidence (which is inherently a right of the majority), all oversight competencies can and should become minority rights. The 2014 reform, which made it possible for a minority to establish an investigative committee, was a significant improvement.
Neglect of labor an ongoing challenge
The deepening of the gap between the government and organized labor represents a specific challenge. The Austria Trade Union Federation (ÖGB) felt neglected by the coalition government of ÖVP and FPÖ in an area traditionally seen to be controlled by the neo-corporatist social-partnership network, which guaranteed organized labor a veto power. It remains to be seen what impact the new coalition (expected to be formed at the beginning of 2020, probably without the FPÖ, but with the ÖVP as senior partner) will have.
Better separation of powers possible
Current imbalances between the federal and state levels of government could be improved through a better separation of powers. There are two options: either allow the states to raise their own taxes or increase centralization. Allowing the states to raise their own taxes could result in decreased spending, but may also encourage unfavorable tax competition between small jurisdictions. Meanwhile, given the small size of Austria, centralization of certain authorities (e.g., education or public healthcare) now seems mandatory.
Migration-policy coherence would
bring benefits
A more coherent migration policy – an increasingly urgent subject given the recent mass immigration into Austria – would allow the government to better manage the challenges and benefits associated with migration, many of which are not fully acknowledged. Migration policies that define who to attract and how to facilitate their integration into Austrian society are a must. From a democratic perspective, the negative consequences of intra-European economic migration on less educated, less mobile, more vulnerable sections of the Austrian workforce must be addressed, if those people are not to be left to populist seduction.
Reform needs across education sector
In terms of education, Austria’s school system could benefit from coherent reform of its two-track system, which determines an individual’s educational and vocational trajectory at an early age. Moreover, a new university-system structure is needed to secure adequate funding for universities and students. Access to the tertiary sector for students from the middle and lower social strata should be improved, and measures such as admission examinations and student fees evaluated with regard to effects on the social composition of students.
Update, enforce environmental policies
Environmental policies are to be redefined and enforced, with a particular focus on a significant reduction of carbon dioxide emitted by vehicles and industry. The challenges arising from Austria’s geographic position as a transit country can only be addressed by improving cargo-rail infrastructure, which implies the need for coherent modal shift policies and substantial investment in rail infrastructure. This would be best combined with policies facilitating research into and production of greener technologies.
Finally, public resources should be more equitably allocated between older and younger generations, especially with respect to retirement policies and the healthcare sector.
Coordination with
EU vital
The European dimension of these reforms is evident in all policy areas – reforms the ÖVP-FPÖ government did not dare to begin with. A migration policy is only feasible if coordinated at the level of the European Union, while any reform of the educational system must draw on lessons provided by other, significantly more successful, European education systems. Austria has to deal with the consequences of integration into the European Union, including weakened national sovereignty. Austria could accept integration into the European Union with all its consequences and try to advance its own national interest within the European political framework. Alternatively, it could follow the example of the so-called Visegrád countries and torpedo common European interests. The second option not only implies slowing down European integration efforts, but excluding the country from the current construction of a “core European Union,” with all the detrimental effects of such an exclusion on the Austrian economy (and society) at large.
Ludger Helms, David Wineroither (Hrsg,): “Die österreichische Demokratie im Vergleich.” 2.Auflage. Baden-Baden, Wien 2017 (Nomos, facultas)

Party Polarization

Pattern of polarization differs by issue
Party polarization has changed over recent years, but not necessarily in one direction. The FPÖ – the party seen as a right populist or even right extremist party – has become more moderate in some fields (e.g., in its attitude toward Austria’s EU membership). Even as an FPÖ strategy to win acceptance from its coalition partner, the center-right ÖVP (as happened at the beginning of 2018), the basic value of EU membership has become a less polarizing issue over the past decade. Concerning other matters (e.g., the status of Islam in Austria), polarization has deepened.
Not a threat to
democratic process
With regard to the above question, cross-party agreements between left- and right-wing parties have certainly become more difficult following the 2017 elections. With its new leader, Sebastian Kurz, the ÖVP has moved significantly to the right in some policy fields. This has made compromise with its (left-wing) counterpart, the SPÖ, more difficult. Overall, existing polarization is deep, but not a threat to the democratic process.
Electoral volatility
focused in center
Parliamentary elections have underlined the kind of polarization shaped by the trends of recent years. In the 2019 elections, the ÖVP won votes and seats, improving its position as the largest party. However, most of the ÖVP’s wins came at the loss of its coalition partner, the FPÖ. The other big winner, the Greens, won largely at the cost of the SPÖ and the Liste Pilz (a party of Green dissidents, which disappeared from parliament following the elections). The electoral volatility occurred almost exclusively within center-right and center-left camps rather than across the political spectrum. The combined strength of the parties in government and parties in opposition between 2017 and 2019 has only slightly changed.
Other alliances
possible in future
The electoral result of September 2019 might lead to a different coalition composition (e.g., a coalition led by the ÖVP with the Greens or the SPÖ as a junior partner), with the new alliance having a different impact on volatility. The ÖVP would have to make different compromises with a new coalition partner. However, it can be assumed that party discipline will make ensure that strategically motivated polarization (government versus opposition) will overshadow substance- or issue-oriented polarization. (Score: 7)
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