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Published: Monday December 16, 2013 MYT 9:10:01 PM
Updated: Monday December 16, 2013 MYT 9:10:56 PM

Protests greet new Austrian government

Austrian President Heinz Fischer (R) and the new Foreign Minister Sebastian Kurz sign the inauguration paper during a ceremony in Hofburg Palace in Vienna December 16, 2013. REUTERS/Leonhard Foeger

Austrian President Heinz Fischer (R) and the new Foreign Minister Sebastian Kurz sign the inauguration paper during a ceremony in Hofburg Palace in Vienna December 16, 2013. REUTERS/Leonhard Foeger

VIENNA (Reuters) - Austria's renewed coalition government of mainstream pro-Europe parties got off to a rough start on Monday as hundreds of people dismayed by the scrapping of the science ministry protested outside the swearing-in ceremony.

"Heinzi, don't do it", one sign read, a half-humorous appeal to President Heinz Fischer not to accept the coalition agreed last week by centre-left Social Democrats (SPO) and conservative People's Party (OVP).

Fischer, himself a former science minister, formally installed the new government anyway.

Chancellor Werner Faymann of the SPO and conservative leader Michael Spindelegger spent the weekend defending the gradualist approach to change by the big parties that have ruled the Alpine republic together since 2006.

Faymann has said there is no need to "reinvent" Austria, which has fared better than euro zone peers during the region's debt crisis and has the European Union's lowest jobless rate of 4.8 percent.

Bernhard Felderer, a government adviser, said the budget deficit was set to narrow significantly this year to below 2 percent of gross domestic product from 2.5 percent in 2012 as higher-than-expected tax revenue and income from a mobile frequency auction helped offset aid to struggling banks.

But political commentators and the media have heaped scorn on the coalition partners for eschewing a more ambitious approach to ensuring long-term prosperity by cutting a bloated bureaucracy and reforming an underperforming education system.

Their decision to fold the science and research ministry into the economy ministry has drawn special criticism.

"We are a small country without natural resources to speak of. Our future hinges on good education and the knowledge of future generations ... so this signal is completely amiss in every respect," former SPO Chancellor Franz Vranitzky told the Oesterreich newspaper.

Former Finance Minister Hannes Androsch of the SPO pointed out in Der Standard that Austria has twice as many universities as neighbouring Switzerland, but provides only half the money, leaving basic research seriously underfunded.

A Facebook page calling for the science ministry to be restored had drawn more than 40,000 "likes" by early on Monday.

With the far-right Freedom Party scoring first or second in opinion polls taken after the September 29 election that drove the two heavyweights to historic lows, the government was under pressure to show it could lead effectively.

It has pledged to raise by 1.6 years the effective age at which people retire to 60 by the end of its five-year term, and to eliminate Austria's structural budget deficit by 2016.

Such tasks won't be easy. Thousands of civil servants who had their pay frozen this year in an austerity package planned to march on Wednesday for salary hikes from a government that has also angered teachers by imposing new working conditions.

Even insiders say the new coalition is a tough sell.

"You might have to beer goggle this government," said one conservative aide, using a slang expression to describe how potential partners can look more attractive the more alcohol you drink.

(Editing by Alistair Lyon)

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