After months of negotiations, Austria’s new coalition government was sworn in by President Alexander Van der Bellen.
The coalition brings together the centre-right Austrian People’s Party (ÖVP), the centre-left Social Democratic Party (SPÖ), and the liberal NEOS in a three-party agreement aimed at providing political stability after a prolonged period of uncertainty.
The swearing-in ceremony officially started the new government, which is led by Chancellor Christian Stocker of the ÖVP, Vice Chancellor Andreas Babler of the SPÖ, and NEOS leader Beate Meinl-Reisinger, along with appointed ministers.
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Following the ceremony, outgoing Chancellor Alexander Schallenberg formally handed over power to Stocker at the Federal Chancellery, and the new government is expected to present its policy agenda in Parliament on Friday, as reported by ORF.
How the coalition will be structured
Under the coalition agreement, the ÖVP and SPÖ will each oversee six ministries, while NEOS will control two.
The ÖVP, which has traditionally focused on economic policy and security, will hold key portfolios, including the interior, defence, economic affairs, and agriculture ministries. The SPÖ will take charge of finance for the first time in 25 years, along with justice, labour, transport, and health. NEOS, participating in government for the first time at the federal level, will lead foreign affairs and education, with Meinl-Reisinger expected to take on the foreign ministry.
The new government will also have seven state secretaries, who the three parties will appoint. They will assist key ministries and help advance the coalition’s legislative plans.
Policy priorities and key changes
The coalition agreement outlines major changes in housing, pensions, immigration, and economic policy.
Among the most immediate changes, the government plans to freeze regulated rents for a year and cap rent increases for the following two years. It will also implement a stricter immigration policy, with rejected asylum seekers housed in return centres and family reunification temporarily suspended.
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Education reforms will include a ban on mobile phones in schools, an expansion of all-day schooling, and a second compulsory kindergarten year. Pension policies will aim to encourage older workers to stay in the labour market by offering tax incentives while also adjusting health insurance contributions for retirees.
On the economic front, the government will increase funding for the Public Employment Service while introducing a bank levy expected to generate €500 million annually. Plans to reduce non-wage labour costs have been postponed until at least 2027.
Meanwhile, controversial transport projects, including the long-debated Lobautunnel, are set to proceed, according to a report by Der Standard.
Challenges ahead for the new government
While the coalition has secured enough parliamentary support, governing will not be without challenges.
The three parties have significant ideological differences, particularly on tax policy and social spending, and internal tensions remain within the SPÖ. NEOS needed a two-thirds majority of its members to approve the deal and now faces pressure to deliver on its campaign promises despite having limited influence in the government.
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The opposition Freedom Party (FPÖ) has already criticised the coalition, arguing that it represents a continuation of the previous government’s policies rather than a meaningful change. FPÖ General Secretary Christian Hafenecker described it as a “carry on as before—only worse” coalition, questioning its ability to bring about real reform, as reported by ORF.
With the new government about to take office, the next few weeks will be key in proving whether this coalition can deliver the stability it promises or if more political turmoil is on the horizon.
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