Chancellor Nehammer says he will resign after talks on forming a new government fail

Austrian Chancellor Karl Nehammer

Austrian Chancellor Karl Nehammer said Saturday he will resign in the coming days after talks on forming a new government failed a second time.

The announcement came after the People’s Party and the Social Democrats on Saturday continued coalition talks a day after the liberal Neos party’s surprise withdrawal from discussions.

“Unfortunately I have to tell you today that the negotiations have ended and will not be continued by the People’s Party,” said Nehammer, the conservative party’s leader, in a statement on social media.

He said that “destructive forces” in the Social Democratic Party have “gained the upper hand” and that the People’s Party will not sign on to a program that it considers to be against economic competitiveness.

Social democratic leader Andreas Babler said he regretted the People’s Party decision to end the talks. “This is not a good decision for our country,” he said.

Babler said that one of the main stumbling blocks had to do with how to repair the “record deficit” left by the previous government.

“I have offered to Karl Nehammer and the People’s Party to continue negotiating and called on them not to give up,” he told reporters Saturday evening.

The next government in Austria faces the challenge of having to save between 18 to 24 billion euros, according to the EU Commission. In addition, Austria has been in a recession for the past two years, is experiencing rising unemployment, and its budget deficit is currently at 3.7% of Gross Domestic Product — above the EU’s limit of 3%.

Babler blamed the collapse of the negotiations on “forces within the People’s Party” that were against a coalition with the Social Democrats, while praising Nehammer for his readiness to compromise. STEPHANIE LIECHTENSTEIN, VIENNA, MDT/AP