Austria’s far-right leader, Herbert Kicklwas instructed by President Alexander Van der Bellen to form a government, putting the Freedom Party leader one step closer to becoming chancellor.

“I did not take this step lightlyVan der Bellen told reporters on Monday. “I will continue to ensure that the principles and rules of our constitution are upheld».

Despite previously vowing not to work with Kickl, members of the conservative People’s Party reversed their stance this Sunday after Chancellor Karl Nehammer failed to form a centrist coalition and resigned. Kickl, 56, met with Van der Bellen in Vienna on Monday to discuss forming a government as around 500 people gathered nearby to protest.

THE stock index ATX of Austria rose 0.7% on Monday, a public holiday in Austria. Ten-year bond yields were little changed at 2.85%, according to German bonds.

The rise of the far right in Europe

If Kickl takes power, it would be the first time a far-right party has led Austria since the end of World War II, a fact that would strengthen the rise of nationalism in Europe. With two weeks to go before Donald Trump takes over the US presidency, Germany is gearing up for elections in February in which the far-right is expected to gain ground, and France has faced an electoral stalemate after Marine Le Pen’s left-wing coalition and far-right. The National Rally overcame the opponents in the elections of last June.

The Freedom Party campaigned on a pro-Russian, anti-immigration and climate skeptic platform. Kickl, a divisive figure in the nation of about nine million, has been voted one of the country’s least liked politicians while leading his party to the brink of power. He aggressively opposed a vaccine mandate during the pandemic and supported far-right activists who promote the mass deportation of immigrants. He also vowed to work with Viktor Orbán, the controversial prime minister in neighboring Hungary.

The People’s Party for decades he tried to keep the Freedom Party at bay, either by forming coalitions with rival parties or by including it only as a junior government partner, a means of exercising dominance. However, this strategy began to unravel after the country’s September elections, in which the Freedom Party won 57 seats, up from 26 in 2019, and its overall vote share increased by almost 13 points. The People’s Party claimed only 51 seats, losing 20 seats.

While Austria’s other parties tried to narrow the class gap after the election to keep the Freedom Party out of government – what the party leader called a “Kickl prevention strategy” – Nehammer’s resignation on Saturday put an end to that. After failing to break down the coalition with the Social Democrats and the liberal NEOS, Nehammer’s temporary successor, People’s Party secretary Christian Stocker, quickly declared that he was ready to discuss a coalition with the Freedom Party.

A fading political star

The change is an admission of declining public support for the party, as well as Nehammer’s failure to woo voters after one-time political prodigy Sebastian Kurz takes over in 2021. Powerful provincial leaders and a faction of industrialists linked to the People’s Party they had also pushed for alignment with the far right.

“As of yesterday, the situation seems differentStoker, until recently a sharp critic of the Freedom Party, said on Sunday. “This country needs a stable government right now and we can’t keep wasting time on election campaigns».

The chances of a Freedom Party-People’s Party coalition have increased significantly, but we cannot draw any premature conclusions, said Markus Howe, geopolitical risk analyst at VE Insight in Vienna.

“Kikl holds the most cards and can therefore afford to be maximalist in his trading stance” said How. “If negotiations fail, he can simply back down and contest an election that polls show will bring him further landslide gains» for the Freedom Party.

Unlike the newer far-right groups in Europe, the Freedom Party has been active in Austria for decades. In the past, Kickl has publicly referred to Van der Bellen, 80, as a “senile mummy”. When he served as interior minister, some foreign intelligence agencies did not trust him enough to stop sharing sensitive information with Austria.

To become chancellor, Kickl will need to reconcile his political views with the conservatives, who continue to hold strong positions in Austria’s economy and society.

Austria’s new leaders also face serious headwinds for the country’s industrial producers after years of high wage growth and rising energy prices have hurt competitiveness. And after two years of economic contraction, Austria must also pass multibillion-dollar budget consolidation measures to avoid sanctions from the European Union.

In a statement on Sunday, Kickl said he would prioritize economic life, justice, security, freedom and peace.

“We take no responsibility for the wasted time, chaotic conditions and massive erosion of trustKickl said Sunday on Facebook. “Clearly, the Freedom Party was and is the only stable point in Austrian politics.”