The Austrian Chancellor said he would resign after talks to form a new government failed

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

The announcement came after the People’s Party and the Social Democrats continued coalition talks a day after the liberal Neus Party surprisingly withdrew from the discussions.

Austrian Chancellor Karl Nehammer of the conservative People’s Party said: “Unfortunately I must tell you today that the negotiations have ended and the People’s Party will not continue them.” He said in a statement on social media.

He said that the “destructive forces” in the SPD had “gained the upper hand” and that the People’s Party would not sign a program that conflicted with economic competitiveness.

Social Democrats 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 hurdles relates to how to fix the “record deficit” left by the previous government.

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

The next government in Austria faces the challenge of providing between 18 and 24 billion euros, according to the European Commission. In addition, Austria has been in recession for the past two years, has high unemployment, and its budget deficit currently stands at 3.7% of GDP – higher than the EU cap of 3%.

The talks have continued since the Austrian president tasked the conservative chancellor in October with forming a new government. The request came after all other parties refused to work with the movement’s leader The far-right Freedom Party, which won the general election in September For the first time, with 29.2% of the votes.