WSJ: Austrian Finance Minister Michael Spindelegger Quits in Tax-Reform Dispute

26/8/2014

His Party's Coalition Partner Wants Tax on Wealth, Which He Is Against

Finance Minister Michael Spindelegger resigned Tuesday after eight months in the role, citing differences within his party over how to overhaul Austria's tax system and reduce its debt.

Mr. Spindelegger also stepped down as Austria's vice chancellor and head of the center-right Austrian People's Party, or ÖVP, the junior partner in Austria's governing coalition.

Late Tuesday, the ÖVP chose Reinhold Mitterlehner, Austria's current economics minister, as new party head. Mr. Mitterlehner said he intended to have all personnel questions in the party settled by Sept. 2.

At a surprise news conference Tuesday morning, Mr. Spindelegger said he resigned due to a lack of support from his own party. "When there is no cohesion, it is time to hand over the reins," he told reporters.

Some ÖVP members have backed calls for tax cuts from its coalition partner, the center-left Social Democrats. Mr. Spindelegger also rejected the Social Democrats' calls for a new tax on wealth, whereas some members of his party are open to compromise on the issue.

Instead of cutting taxes, Austria should focus on cutting its debt, which is expected to reach about 80% of gross domestic product this year, Mr. Spindelegger said.

"The Austrian way must be oriented toward Berlin and not toward Athens," he said.

Mr. Spindelegger had been a target of criticism from within his own party even before the debate over taxes. He has been a "dead man walking for many months," said political commentator Peter Plaikner, adding that he was surprised he had been able to persevere as finance minister and party head for so long.

Mr. Spindelegger was criticized for his inability to assert his policies and for some of his cabinet choices when building the government, Mr. Plaikner said.

Many politicians from both sides of the government were surprised by Mr. Spindelegger's resignation, but seemed certain that the coalition would be able to overcome the loss of one of its party's leaders.

"My expectation is that we [the coalition] will lead this country out of the crisis by 2018," when the next general elections will be held, Austria's chancellor and head of the Social Democrats, Werner Faymann, said Tuesday in an interview with Austrian state television ORF.

In elections last year, the coalition government secured only a thin majority. Mr. Spindelegger gave up his role as foreign minister to become finance minister in December.

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