Austria’s Government in Peril as Bribery Probe Engulfs Kurz

(Bloomberg) -- Austria’s government is on the verge of collapse after a corruption investigation that ensnared Chancellor Sebastian Kurz led his Green allies to suggest they might abandon the ruling coalition. 

The embattled leader, in brief remarks to reporters, said he would fight on. He bounced back from a sleaze scandal two years ago that ended his earlier coalition with the far right. This time it could play out differently, as Kurz is more directly implicated.   

Prosecutors raided the offices of several Chancellery staff this week for their alleged role in funneling federal funds to a newspaper publisher to orchestrate Kurz’s rapid rise in government. 

Now, the Greens, junior partner in a fragile two-year coalition with Kurz’s conservative People’s Party, has questioned his ability to continuing governing. 

“We cannot just go back to business as usual. The allegations made weigh heavily; there is corruption in the room,” Vice Chancellor Werner Kogler, who also leads the Greens, said in a tweeted statement. 

Kurz, 35, spoke briefly with reporters on Thursday before a hastily-arranged meeting with Austrian President Alexander Van der Bellen.  

“We stand by this government and the government agenda, and all the things that we have planned to do,” Kurz said. 

He noted that the People’s Party won Austria’s past two elections, but seemed resigned to the potential for his coalition to break apart.  

“If the Greens don’t want to continue this cooperation any longer and want to look for other majorities in parliament, then that has to be accepted,” Kurz said. 

An extraordinary session of parliament has been called for Oct. 12, at which the opposition may introduce a non-confidence motion in the chancellor. Kurz on Thursday postponed a planned trip to Israel.  

Kogler also spoke Thursday with Van der Bellen, who’s a former Green Party official, and will meet representatives of all parties on Friday to find a way forward. 

State representatives from Kurz’s party have pledged support for their leader, and several cabinet members released a letter saying they would only be part of a government led by him. 

In laying out their case, Austrian prosecutors said evidence suggested the chancellor knowingly collaborated in efforts to plant political advertising camouflaged as poll data. The investigation involves communication between senior government officials from 2016, when Kurz was foreign minister.

Kurz has denied any wrongdoing and said it was part of political efforts to remove him from power. 

Text messages revealed in a search warrant didn’t implicate him and related to normal cooperation between government and media, Kurz told the public broadcaster ORF late Wednesday.  

Kurz became chancellor in 2017 -- Europe’s youngest leader at the time -- after becoming his party’s chairman earlier that year. His first coalition government, with the far-right Freedom Party, collapsed in 2019, also under a cloud of corruption, but Kurz won re-election. 

In September Kurz was questioned for more than five hours in a perjury probe into statements made to a committee investigating the so-called Ibiza affair that sunk Austria’s previous coalition. 

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