Kurz Returns to Chancellery After Sealing Historic Austrian Pact
Kurz Sworn In to Lead Austria’s Conservative-Green Government
(Bloomberg) -- Sebastian Kurz was sworn in as Austria’s chancellor by President Alexander Van der Bellen, heading a new alliance of conservatives and environmentalists that now has to figure out how to fund its ambitious climate goals.
Kurz, 33, is breaking new ground in Europe by forging a coalition between his People’s Party and the Greens. Their program combines Kurz’s trademark hard line on migration and deficits with ambitious plans by Green party leader Werner Kogler, 58, to make Austria climate neutral by 2040.
Kurz’s new finance minister, Gernot Bluemel, and Green “super minister” for infrastructure, Leonore Gewessler, will now have to thrash out how to fund the de-carbonization of the Austrian economy while at the same time lowering taxes and keep the budget balanced. The groups’ 328-page program spells out income tax cuts but leaves it to a “task force” of experts to design a new “eco-social” federal revenue model by 2022.
“Reducing the tax burden or reaching climate neutrality by 2040 are costly plans,” said Inga Fechner, an economist at ING Group in Germany. “The budgeting of the government’s plans is not yet entirely clear.”
A government focus on climate change could help Austria get back on track to achieving its Paris Agreement targets for cutting harmful emissions. Despite its wealth of hydropower resources, the country’s efforts to tackle global warming rank only 38th worldwide, according to this year’s Climate Change Performance Index.
Kurz’s new government team is a sharp change from his previous coalition with the nationalist Freedom Party. In addition to himself and Vice Chancellor Kogler, there will be 7 men and 8 women, including Justice Minister Alma Zadic, the first Austrian government member who came to the country as a refugee from the Bosnian civil war.
Austria’s coalition offers a potential template for politicians across the continent searching for a formula to repel the threat of right-wing populism. The new European Commission’s President Ursula Von der Leyen, a member of Angela Merkel’s party in Germany, unveiled a plan to decarbonize the European economy, and the next government in Berlin could see a similar alliance as the Greens supplant the ailing Social Democrats as the natural partner for the conservative Christian Democrats.
To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net
To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Jonathan Tirone, Chris Reiter
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