Austria’s chancellor has announced that he will resign after negotiations to form a new government fail

Austrian Chancellor Karl Nehammer said on Saturday that he would resign in the coming days after talks to form a new government broke down for the second time.

The announcement came as the People’s Party and the Social Democrats resumed coalition talks a day after the liberal Neos party suddenly pulled out of the debate.

“Unfortunately, I have to tell you today that the negotiations have ended and that the People’s Party will not continue them,” said Austrian Chancellor Karl Nehammer of the conservative People’s Party. it is stated in a statement on social networks.

He said that “destructive forces” in the Social Democratic Party “have prevailed” and that the People’s Party will not agree to a program that is against economic competitiveness.

Social Democrat leader Andreas Babler said he regretted the People’s Party’s decision to end negotiations. “This is not a good decision for our country,” he said.

Babler said one of the main stumbling blocks was the rehabilitation of the “record deficit” of the previous government.

“I offered Karl Nehammer and the People’s Party the continuation of negotiations and called on them not to stand up,” he told reporters on Saturday evening.

The next government in Austria faces the challenge of saving between 18 and 24 billion euros, according to the European Commission. In addition, Austria has been in recession for the last two years, unemployment is rising, and its budget deficit currently stands at 3.7% of gross domestic product – above the EU limit of 3%.

Talks have dragged on since the Austrian president tasked a conservative chancellor with forming a new government in October. The request came after all other parties refused to work with the leader the far-right Freedom Party, which won the national elections in September for the first time with 29.2% of votes.