How Austria’s embrace of the far right could fracture the EU centre

Good morning, happy new year, and welcome back to Europe Express. I could spend this newsletter telling you about all the things to expect in 2025, but you’ve probably spent the past fortnight reading countless takes on that theme. Here’s the Financial Times’ collective forecasting attempt — and your opportunity to best our predictions.

Instead, today I unpack the ramifications of the far right’s march to power in Austria, and report on the search to find a venue for an EU leaders’ away day taking place in four weeks’ time.

Far right rises

Austria’s far-right Freedom party (FPÖ) appears to be on a glide path to the country’s chancellery, after negotiations among centrist parties collapsed and the moderate conservative People’s party (ÖVP) said it was open to coalition talks.

Any deal would mark the latest major victory for Europe’s far right, and put intense scrutiny on the stance of the EU’s centre-right towards engaging with extremist political groups.

Context: The Eurosceptic, pro-Russia, anti-immigration FPÖ won almost 29 per cent of September’s election, the highest share of the vote. Other parties, including the ÖVP, ruled out working with them and tried to cobble together an alternative coalition. Those talks collapsed on Saturday, with Karl Nehammer resigning as chancellor and stepping down as ÖVP leader.

Nehammer’s appointed replacement Christian Stocker abandoned the party’s cordon sanitaire approach, saying yesterday he was willing to negotiate with the FPÖ. FPÖ leader Herbert Kickl will meet Austria’s president Alexander Van der Bellen today.

Should Stocker strike a deal to become the far-right party’s junior partner, he would put one of the EU’s most uncompromising politicians at the helm of a national government and give him a seat around the EU’s 27-leader council.

Kickl has stark pro-Russian views, has embraced Covid-19 pandemic conspiracy theories and made unsavoury flirtations with Austria’s Nazi past.

Aside from significantly boosting efforts to overturn EU support to Ukraine, sanctions against Russia and existing immigration policies, it would also shine a spotlight on the centre-right European People’s party’s stance towards working with far-right parties.

The EPP, of which the ÖVP is a member, is the largest political group in the European parliament. Its member parties in Germany and Poland are battling far-right rivals in critical national elections this spring, and the party is already under heavy criticism from the assembly’s socialist and liberal groups for teaming up with hard-right groups to win votes.

Stocker may feel he has no choice. A survey released by Austrian tabloid Kronen Zeitung yesterday suggested that if a fresh snap election was called, the FPÖ could poll as high as 37 per cent, with the once dominant ÖVP falling to 21 per cent.

Chart du jour: Too slow

The ECB has been too slow to cut rates, Eurozone economists have warned, with almost half the analysts polled by the FT accusing rate-setters of being “behind the curve”.

Venue hunt

Brussels officials will hold crunch talks today to nail down a location for the EU’s leaders to meet for a “retreat” next month, as some capitals get nervous that there’s still no official invite to replace the save-the-dates.

Context: New European Council president António Costa has decided to hold an informal meeting somewhere in Belgium on February 3 for the EU’s 27 national leaders to have frank discussions on critical issues related to European defence, two weeks after Donald Trump is sworn in as US president. 

Capitals were enthusiastic about Costa’s proposal back in November, agreeing with his approach that a more intimate, relaxed format away from the dull, if functional, council headquarters in Brussels that hosts their regular summits was more likely to produce constructive debates.

But some national cabinets are a little anxious that four weeks before it’s supposed to take place, there’s no complete plan. Today’s meeting aims to reach an agreement on one of the shortlisted options located on the outskirts of Brussels.

Belgian diplomats have been roped in to find options, but many of the country’s castles, palaces or country hotels have been ruled out for being too small, too far from Brussels or unavailable, officials said.

“Preparations are well under way, but a number of logistical elements need to be fine-tuned before we can communicate further information on the meeting,” said a spokesperson for Costa. “There is no doubt everything will be set well in advance so as to allow comfortable time for all parties concerned to make the necessary arrangements.”

Leaders accompanied by just two senior officials will take part in the talks, with Nato secretary-general Mark Rutte and British Prime Minister Sir Keir Starmer also invited to attend sessions during the day.

“Look, it’s not like finding a venue for a wedding in July,” said one EU official. “It’s a Monday, in early February, in Belgium.”

What to watch today

1. Austria’s President Alexander Van der Bellen meets Freedom party leader Herbert Kickl.

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