Austria has successfully formed a new government, marking a significant political shift after the longest negotiations in the nation's modern history.

Following five months of discussions, centrist parties have come together to establish a coalition that notably excludes the far-right Freedom Party (FPÖ), which emerged as the leading party in the September elections with nearly 29% of the vote, its highest since World War II.

The coalition comprises the Austrian People's Party (ÖVP), the Social Democratic Party (SPÖ), and the liberal NEOS party.

This three-way alliance is the first of its kind in Austria since post-World War II and reflects a collective effort to restore a political barrier around the FPÖ, which has been associated with Eurosceptic, pro-Russian, and anti-immigrant sentiments.

The new government’s program includes commitments to fiscal consolidation and more stringent immigration policies.

Key points discussed in a press conference held on February 27, 2025, by coalition leaders—Christian Stocker of the ÖVP, Andreas Babler of the SPÖ, and Beate Meinl-Reisinger of NEOS—included a plan to reduce the budget deficit to meet the 3% limit set by the EU, thereby avoiding potential infringement procedures from Brussels.

Among the financial measures proposed are increased taxes on banks and on the extraordinary profits of fossil fuel producers, alongside the removal of VAT exemptions for solar panels.

The coalition also aims to reform the pension system to decrease public spending.

In terms of immigration, the coalition partners have promised to tighten family reunification policies for refugees, an issue that the FPÖ utilized effectively during its election campaign.

Although the coalition has been formed, it still requires the formal approval from the NEOS party base, which is set to take place on March 2, 2025, and requires a two-thirds majority to pass.

If approved, the new government is expected to take office on March 3.

The coalition negotiations faced challenges, including a setback in January when discussions faltered after NEOS withdrew from talks aimed at forming a government.

Prior to the establishment of the coalition, President Alexander Van der Bellen had tasked Herbert Kickl of the FPÖ with attempting to form a majority with the ÖVP, but those efforts ceased when the ÖVP opted out of engagement with the far-right party.

FPÖ leader Herbert Kickl criticized the newfound coalition, labeling it as a 'coalition of losers' and called for fresh elections, while polls indicated that the FPÖ’s support had risen to 34%.

Critics from allied parties, notably Lega, accused the coalition of being a tactical maneuver to retain power without direct electoral support, labeling it as a 'palace agreement.'

This new political landscape marks a significant moment in Austria's political history, reflecting the ongoing challenges and dynamics within its parliamentary framework.