Austria Closes in on Railroad Chief as Socialist Chancellor

  • Christian Kern, state company manager, set to follow Faymann
  • Freedom Party presidential victory could compound challenges

Austria’s ruling Social Democrats closed in on the head of the national railway as the country’s next chancellor and party chief as they seek to restore stability and stop voters from flocking to the populist Freedom Party amid rising unemployment and discontent over the refugee influx.

Christian Kern, 50, who spent most of his career in state-owned enterprises, is set to be endorsed by the party’s national executive on Tuesday as his main rival for the post, Time Warner Inc. executive Gerhard Zeiler, pulled out of the race. His appointment marks a departure from predecessor Werner Faymann, a career politician who stepped down Monday.

“People have enough of the old faces, it was time to get somebody from the outside,” said Peter Hajek, a public-opinion analyst in Vienna. “Kern represents a pragmatic type of politician, a bit like Matteo Renzi in Italy. He doesn’t represent the classic, old party official.”

Faymann stepped down on Monday after losing the support of his own party following a string of electoral defeats, most recently in Austria’s vote for the presidency. The runoff election later this month threatens further political uncertainty if the anti-Islam, European Union-skeptic Freedom Party builds on its first-round success to take the post.

Kern gained support from most of the regional Social Democratic organizations and received a final endorsement from Vienna Mayor Michael Haeupl on Thursday, according to Austrian media including public broadcaster ORF

State-owned Companies

Kern served as board member of the nation’s biggest utility Verbund AG before his appointment as chief executive officer of railroad company OeBB Holding AG in 2010. Not a complete stranger to politics, he’s worked as press secretary for the Social Democrats early in his career.

As railway chief, he also oversaw the transport of hundreds of thousands of refugees last year after Austria and Germany agreed to let trains from Hungary pass through. Kern’s office declined to comment, and the Social Democratic party didn’t have an immediate comment.

During Kern’s tenure, the Austrian railway turned a 330 million euro-loss in 2010 into a 193 million euro-profit last year, in part by slashing management positions. He also won acclaim for the company’s performance in the refugee crisis, when it offered places to sleep and free Wi-Fi for the migrants heading north.

“For me, he’s one of the best managers in Austria and above all, he was very successful at the Austrian railway,” said Hans Niessl of Burgenland, one of three Socialist provincial governors, according to the Austrian Press Agency.

Run-Off Ballot

After 90,000 refugees applied for asylum in Austria last year, the country faces the challenge of integrating them into a workforce that’s already feeling the pain of a stagnant economy. Rising support for the Freedom Party culminated in the first round of presidential elections last month, when their candidate took more than 35 percent of the vote, while the two main parties secured a combined 22 percent.

The Freedom Party’s Norbert Hofer faces Green Party-backed Alexander Van der Bellen in the run-off ballot on May 22, which, according to a poll published in the Oesterreich newspaper on Thursday, is too close to call. Current president Heinz Fischer, who has a largely ceremonial role, may swear in Kern as soon as May 18 after he gets the final nod from Social Democratic leaders meeting the day before.

Freedom Party leader Heinz-Christian Strache said Kern’s nomination won’t change anything about the Social Democrat’s course, repeating his call for fresh elections.

The Social Democrats rule Austria in a coalition government with the conservative People’s Party. Their veto could still upend Kern’s appointment, a step that would amount to leaving the government coalition. 

The conservatives’ chief, Vice-Chancellor Reinhold Mitterlehner, has said the party won’t seek snap elections as long as agreed policies on refugees are upheld. He reiterated on Thursday that he’s seeking to continue the coalition with a fresh start.

“I discussed our plans for the future cooperation with Michael Haeupl,” Mitterlehner said on his Facebook page. “A relaunch of the entire government activities is necessary to regain the trust of the people. All that I’ll also discuss with the new SPOe candidate for the chancellery before he’s sworn in.”

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