AUSTRIA: Austria was at a political standstill last night after conservative chancellor Wolfgang Schüssel walked out of talks to form a grand coalition with the rival Social Democrats (SPÖ) a month after he lost the general election.
The two-week-old talks collapsed amid a row over military spending between Mr Schüssel's People's Party (ÖVP) and the SPÖ, which came from behind to capture 35 per cent of the vote and overtake the ÖVP as the strongest political party.
The new parliament met for the first time this week in Vienna as the two largest parties continued to argue over education, pensions and, above all, a €2 billion order of 18 Eurofighter jets approved by Mr Schüssel's government before the election.
The SPÖ used the first sitting of parliament to organise a parliamentary inquiry into the order. It had made an election promise to investigate the decision that led to the purchase and, if possible, cancel the order.
Mr Schüssel, who had already warned that the aircraft order was not a negotiable part of grand coalition talks, walked out on Monday night as a consequence.
"How would you react if someone made you a marriage proposal and at the same time threatened to sue you to ruin your reputation?" asked Wilfried Haslauer, deputy ÖVP leader in the state of Salzburg.
Yesterday, President Heinz Fischer held talks with Mr Schüssel and SPÖ leader Alfred Gusenbauer but the attempt to break the deadlock came to nothing.
"Whoever gets up from the negotiating table has to know how to come back," said Mr Gusenbauer after meeting President Fischer. He rejected speculation from ÖVP that he was considering a three-way coalition with the Greens and the populist Freedom Party.
Two weeks ago, Mr Schüssel said in a newspaper interview that he could imagine heading a three-way coalition. Leading political scientists suggested yesterday that his walk-out was a play for time.
A new opinion poll yesterday showed that one in two Austrians favoured returning to the ballot box for fresh elections.
President Fischer said that "intensive work" would be required to rebuild trust but that he was not yet considering fresh elections or a minority government.
"In light of the election result, a co-operation between the two parties would be the most sensible solution for Austria," he said in a statement.