Drought aid and climate law: Coalition continues to struggle for compromise

Austria's ruling coalition parties are locked in difficult negotiations over drought relief for farmers and a new climate law, with no agreement reached despite ongoing discussions.

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The coalition partners – the conservative ÖVP, the Social Democrats (SPÖ), and the liberal Neos – are committed to finding a compromise. However, significant disagreements persist, particularly concerning the target of climate neutrality by 2040 and how to finance the proposed aid measures for the agricultural sector.

Disputes have arisen over the climate law's wording. While the goal of climate neutrality by 2040 is to be enshrined, a clause suggesting this is contingent on maintaining a "competitive location" has drawn criticism from the SPÖ and Neos, who view it as a step backward. The ÖVP's own economic wing, along with the Chamber of Commerce and the Federation of Industry, have also voiced opposition, fearing that the 2040 target exceeds EU requirements and could harm the economy.

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Funding for farmer aid remains a contentious issue. The ÖVP's agricultural minister proposed using funds from the disaster relief budget, aiming for a package of 250 million euros that would include exemptions from social security contributions. However, the SPÖ reportedly rejected this, offering only 50 million euros. Other parties, including the Greens and the far-right FPÖ, have criticized the government's handling of the situation, accusing them of inaction and political maneuvering.

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