VIENNA — Austrian Chancellor Karl Nehammer declared on Saturday that he will resign in the coming days after coalition talks aimed at forming a new government collapsed for the second time. This announcement occurred following negotiations between the People’s Party and the Social Democrats amid the recent withdrawal of the liberal Neos party from discussions.

In a somber statement shared on social media, Nehammer said, “Unfortunately I have to tell you today that the negotiations have ended and will not be continued by the People’s Party.” He attributed the failure of talks to what he termed “destructive forces” within the Social Democratic Party that he believes have “gained the upper hand” over coalition proposals focused on economic stability.

The Social Democratic leader, Andreas Babler, expressed disappointment at the cessation of talks, stating, “This is not a good decision for our country.” He pointed out that a significant obstacle was the need to address a “record deficit” left by the prior government.

Babler offered to continue negotiations, urging Nehammer not to abandon discussions. Current estimates from the EU Commission indicate that the next Austrian government must find ways to save between €18 billion and €24 billion. Additionally, Austria faces economic challenges, resting in recession for the past two years, grappling with rising unemployment, and managing a budget deficit of 3.7% of GDP, which surpasses the EU's stipulated limit of 3%.

The protracted negotiations transpired after Austria's president assigned the conservative chancellor in October to form a new government. This task arose following unanimous refusals from all parties to collaborate with the leader of the far-right Freedom Party, who had secured 29.2% of the national vote in the September elections, marking a historic breakthrough.

As Nehammer prepares to step down, it remains unclear what direction the People’s Party will take in selecting a successor or if early elections will occur as a potential pathway forward.

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