Austrian Chancellor Kurz Resigns Amid Corruption Accusations

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by Tyler Durden
Sunday, Oct 10, 2021 - 09:55 AM

As would-be German Chancellor Olaf Scholz scrambles to stitch together a three-party "traffic light" coalition in the wake of the latest federal elections, right next door Austria's leader has become embroiled in yet another political crisis. Austrian Chancellor Sebastian Kurz, a darling of Europe's new right, announced his resignation on Saturday.

His resignation comes just days after he was named a suspect in an investigation by state prosecutors (prosecutors whom Kurz has previously criticized as incompetent and obsolete) into possible corruption and embezzlement of public funds. The police allege that Kurz may have been a part of a scheme that allegedly embezzled money from Austria's Treasury to pay bribes to domestic media outlets in exchange for favorable coverage. Five senior officials close to Kurz, as well as the chancellor himself, have been named in the warrant, but none of them have been charged or arrested.

Still, just the whiff of such blatant corruption - Kurz and his cronies allegedly funneling €1.2MM to pro-Kurz media outlets in 2016 and 2017, as the prosecutors claimed in a warrant - was apparently enough to force Kurz to resign from the chancellorship (though few expect this to be the final act in his political career; Kurz, 35, has already seen his first government collapse back in 2019 after a scandal involving the far-right Freedom Party).

While Kurz remains Austria's most popular politician in decades (although his conservatism has made him an object of hatred for some), the prospect of such blatant corruption (if these charges are proven, it's likely somebody within Kurz's circle will end up going to jail) were enough to provoke a rebellion by every party represented in Austria's assembly. Even the Greens, with whom Kurz has governed for more than a year in an uneasy partnership, turned on the chancellor, as did some of the elites from his own party. While the People's Party released statements and held press conferences defending their leader, the Greens defected from the coalition, declaring Kurz "unfit for office", and met with the rest of the opposition - including the "far-right" Freedom Party, the Social Democrats and the Greens - to plot his removal according to the FT. Then the old guard of Kurz's own People's Party joined the push to oust Kurz and that was it. What's more, Kurz has given up the immunity typically afforded to lawmakers.

And so, speaking Saturday in a televised address o the nation from the Ballhausplatz, the seat of the chancellor in Vienna, Kurz announced his resignation from the chancellery, said it had been an honor to serve as minister and chancellor during his 10 year career in politics. But right now, "my country is more important than I am," he added.

"This is not about me, it is about Austria."

Kurz claimed that the allegations against him are "wrong" and denied he had ever used government money for political purposes. As he fights to clear his name, "I want to make space to guarantee stability" in Austria.

But the real reason for his resignation might have more to do with strategy than sentiment: the greens had threatened to join opposition parties in bringing a vote of no confidence against him in parliament on Tuesday, which would have been a major embarrassment.

The warrant was issued by the Central State Prosecutor for Economic Crime and Corruption - or WKStA - an agency Kurz recently criticized as he planned a policy of prosecutorial reform. Police raids ordered by WKStA hit the federal chancellery and the headquarters of Kurz's People's Party, as well as the finance ministry.

Historians say an investigation like this into an Australian leader is "unprecedented". Still, most believe Kurz's chances of returning to power are high.

Instead of leaving politics completely, Kurz will return to Parliament as the leader of his party. Alexander Schallenberg, Kurz's foreign minister and a close political ally, will take over his place as chancellor.

As one analyst told the FT, a political comeback is almost guaranteed.

"Kurz is not really stepping down, he is stepping back," said political consultant Thomas Hofer. "Make no mistake, he remains in charge of the party, and Schallenberg is one of his closest allies. He will be thinking about a comeback."

Kurz's popularity was largely built on his opposition to migrants during the refugee crisis a few years back. And with a new migrant crisis thanks to Biden's catastrophic withdrawal from Afghanistan looming just over the horizon, we suspect Kurz's appeal - and that of his People's Party - won't be diminishing any time soon, no matter what schemes his opponents may have cooked up.