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Haider's Helpers


International Business: Austria

Haider's Helpers

A handful of top execs are openly supporting the far-right pol, and more may follow

He rose to power thanks to swelling support from Austria's disgruntled working class. Playing on their fear of immigrants, unemployment, and globalization, the populist far-right Freedom Party leader Jorg Haider engineered his party's participation in Austria's coalition government for the first time. But Haider also has powerful backers from an even more influential lobby--business.

Few executives will talk about it. For most, it's too risky, given European Union sanctions against Austria and Haider's previous statements in favor of Hitler's Nazi regime. But those who do speak out argue that Haider's support among Austria's private corporations and family-owned companies is growing. That's because these companies benefited far less than the state sector during the 50 years of "socialist partnership," when the Socialist Party and People's Party shared power and controlled everything from education to corporate boards. Now that the Freedom Party is in power, says Thomas Prinzhorn, a Haider business backer, "the fun is over" for the old guard.

Prinzhorn, 56, is the most prominent of a handful of high-profile executives known to support Haider. A paper magnate who studied at Harvard Business School, he runs the family-owned W. Hamburger, one of Europe's largest paper recyclers. And he represents the Freedom Party in Parliament as party whip of the lower house. A member of Parliament since 1996, he sees Haider as the real chance to implement reform in Austria. "There is a lot of support among businesses for the Freedom Party, but few will admit to it," notes Prinzhorn. "Most businessmen want to avoid opening themselves to attack," he adds. Indeed, he and his wife send their children to school under assumed names to protect them from ridicule. FATHER FIGURE. Another known Freedom Party supporter is Veit Schalle, 57. He runs Billa, Austria's leading supermarket chain, though he refuses to discuss his leanings publicly. It's also well known that Haider was close to Herbert Turnauer, a wealthy industrialist whose businesses ranged from aluminum to packaging. Until his death this year at 92, he was one of the most powerful figures in the country and Haider's mentor. The Freedom Party leader once referred to Turnauer as a "father figure."

Why are businesspeople backing Haider? The main reason, says Prinzhorn, is that the Freedom Party promises to shake up the old system from top to bottom. In last October's elections, when the party won 27% of the Austrian vote, it vowed to slash payments companies must make to a host of social security programs, including unemployment and accident insurance funds by $1.1 billion a year through 2003. Haider also wants to repeal the so-called "speculation tax," which penalizes investors who hold stocks for less than a year. The new government will also shake up the boards of companies such as state-controlled oil giant OMV, replacing political appointees with independent experts. It's all part of ending the favoritism that has benefited state companies and stifled competition.

Another key mechanism for roiling the old system will be privatization. The state still holds considerable stakes in everything from Austrian Airlines to Austria Tabak, the tobacco monopoly. But that's soon to end. "We are planning a privatization offensive the likes of which Austria has never seen," says 31-year-old Finance Minister Karl-Heinz Grasser. One of the first to go on the block will be Austria Tabak, in which the state owns a 41% stake worth an estimated $430 million. The state's 75% share of Austria Telekom alone could be worth as much as $10 billion. AWAKENING? Many Austrian companies are eagerly awaiting the privatization campaign. "The program reflects a political awakening that has mostly come from the Freedom Party," says Lorenz Fritz, general secretary of the Industrial Assn., Austria's most influential business group. But he and other execs also worry about Haider's tendency to make insensitive remarks. "He's always having to deny things. He would be better off if he kept his mouth shut," Fritz notes.

Haider's political future may depend on how much business support he attracts. Although Haider himself holds no ministerial portfolio, he signed off on the government program and sent his proteges into cabinet posts. If the coalition government boosts the economy, business support for Haider could grow, improving his chances of becoming Austria's chancellor one day. It remains to be seen whether Austria Inc. will end up becoming an apologist for a controversial populist and European pariah.By Matthew Karnitschnig in ViennaReturn to top


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