AUSTRIA: Austrian Social Democrat (SPÖ) leader Alfred Gusenbauer will open coalition talks tomorrow with his traditional rivals, the conservative People's Party (ÖVP), almost two weeks after winning the general election.
But stormy negotiations are likely before a grand coalition emerges with the two parties at odds on everything from education and pensions to defence spending and healthcare.
Relations between the two parties have remained tense since election night, when the SPÖ captured 35 per cent of the vote and overtook the ÖVP as the strongest political party.
Since then the two parties have been bickering: Mr Gusenbauer has suggested that chancellor Wolfgang Schüssel and his ÖVP have yet to accept the election defeat, while Mr Schüssel has accused the SPÖ of triumphalism.
Yesterday both parties published lists of pre-conditions and demands for coalition talks. Mr Gusenbauer's 10-point SPÖ "red list" included pledges for a guaranteed state pension and reforms of the education system.
He promised to halt the sale of remaining holdings in former state-owned companies such as Telekom Austria and the post office. Mr Schüssel countered that coalition talks were no guarantee of a coalition and that he wanted his party afforded the same standing as the Social Democrats at the negotiating table.
Among his demands, he said that his government's order of 18 Eurofighter planes - which the SPÖ has threatened to cancel - is "non-negotiable" and that an SPÖ plan for an €800 guaranteed basic income for every citizen was "out of the question". He has also called on the SPÖ to continue plans to abolish inheritance tax.
Outgoing finance minister Karl-Heinz Grasser, an independent politician but a close aide to Mr Schüssel and a member of his negotiating team, said the SPÖ had yet to prove its ability to run the Austrian economy.
"The People's Party is the party which managed to put state finances in order whereas the Social Democrats have always run high deficits and high debt."
Leading poll analyst Peter Hajek said the problems between the two parties were "atmospheric" rather than based on political content.
Meanwhile, an election committee decided that Jörg Haider's extreme-right party, BZÖ, will be represented in the new parliament, after nearly failing to clear the 4 per cent hurdle.
