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Austria's Vice Chancellor Resigns


Austria's vice chancellor and two officials from the Freedom Party resigned Sunday amid a rift in their right-wing party. The Austrian chancellor is already prepared to hold early elections.

Austria's Vice Chancellor Susanne Riess-Passer, who is also the leader of the far-right Freedom Party, said she resigned because a recent conflict made it "impossible to work effectively." In addition, the party's finance minister Karl-Heinz Grasser, and its parliamentary speaker Peter Westenthaler, also left their posts.

Analysts say the resignations came as a clear victory for former party leader Joerg Haider, a controversial figure who has praised aspects of the Nazi era during World War II.

Mr. Haider has lead a revolt against his colleagues after they proposed to postpone promised tax cuts. The government said it needed the money to help the victims of recent floods in Austria.

More than 100 people died in the floods that swept through Austria and several other Central and Eastern European countries, where most people have no adequate insurance. The damage of the floods in the whole region has been estimated at up to $20 billion.

Mr. Haider argued that delaying tax cuts would go against the party's election promises. But, analysts point out that the issue of tax cuts only highlights an underlying conflict between Mr. Haider and Vice Chancellor Riess-Passer for control of the party.

Freedom Party officials reportedly said the current center-right coalition of Austrian Chancellor Wolfgang Schuessel is now likely to end later this month. New elections are expected as early as November.

Mr. Schuessel, who formed the cabinet with the Freedom Party in February 2000, said Sunday that he was "not afraid" of calling an early election.

An election would possibly end a difficult marriage between the center- and far-right coalition partners, which led to diplomatic tensions with the European Union, and other countries including the United States and Israel.

Western diplomats criticized the conservative Mr. Schuessel for cooperating with the Freedom Party, perceived as being xenophobic and anti-Semitic. Thousands of Austrians often took to the streets to demonstrate against the government.

Under pressure, Mr Haider did not participate in the cabinet, but he remained influential behind the scenes.

Relations improved with the EU several months later after the government announced it would set up a fund to compensate former labor camp workers during the Nazi era.

However, some tensions remained with neighboring countries who expressed concern about the Austrian government's tough stance towards workers from future members of the European Union.

Concerns in these countries will likely increase over fears that Mr. Haider's role in the Freedom Party will become more prominent once again.

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