Stronach sets up Austrian political party

At the age of 80, most people are thinking about slowing down. Frank Stronach is thinking about starting a political party and pulling Austria out of the euro.

The Austrian-born billionaire, who emigrated to Canada as a penniless 22-year-old and made his fortune as the founder of car parts supplier, Magna International, has for several months been working towards setting up a political party in the land of his birth. The launch could come as early as this week.

Even though his party still has no name, no programme and no website, recent opinion polls suggest that it could win as much as 10 per cent of the vote. In one poll, 34 per cent of voters said that they would like to see Mr Stronach in parliament after Austria's next general election, to be held by autumn 2013.

That appeal is due in no small part to Mr Stronach's hostility to the euro. Austrian taxpayers would be on the hook for €19.5bn - about 6.5 per cent of national output - if the European Stability Mechanism were to use all its firepower. The most recent eurobarometer poll found that 30 per cent of the population were now against the single currency, up from 19 per cent when the coins and notes were introduced in 2002.

Strident criticism of the single currency has already proved a vote-winner in other eurozone creditor states, such as Finland and Holland, which are tiring of the costs of supporting the debtors in the currency bloc's periphery.

Such criticism has often gone hand-in-hand - as in the case of the Dutch PVV or the French National Front - with anti-immigrant sentiment, which turns off mainstream voters, limiting such parties' electoral chances. Perhaps unsurprisingly, given his cosmopolitan background, Mr Stronach's party is free of such baggage.

He has other advantages, too. His rags-to-riches life story and success in creating jobs set him apart from most of his peers, as does his financial clout. Such strengths have begun to bear fruit: four sitting members of parliament have already pledged to join his party.

But the Styrian-born businessman also has weaknesses. In particular, his wealth may prove a double-edged sword. Josef Bucher, head of the BZO, a right-of-centre opposition party, has accused Mr Stronach of trying to buy influence, a charge Mr Stronach has denied.

Meanwhile, Mr Stronach's personal financial affairs - he pays tax in Switzerland and Canada as well as Austria - have begun to attract attention.

"The other parties haven't really jumped on him on this yet, but they will if he emerges as a danger to them," says Thomas Hofer, a political analyst at H&P Public Affairs in Vienna.

Mr Stronach's myriad ideas will also come under greater scrutiny once he converts them into concrete policies. Through the Stronach Institute, a think-tank that he set up in 2011, he has advocated a flat tax system, tax breaks for companies that reinvest their profits in Austria and the introduction of a debt brake, a trio of policies that economists say would be hard to combine. An erratic appearance on Austrian state television during the summer did little to clarify Mr Stronach's thinking.

Economists also disagree with Mr Stronach on the merits of Austria leaving the euro.

Ewald Nowotny, the head of the country's central bank, has rejected the idea as "utterly absurd". It would leave Austria with a stronger currency, hurting the country's export sector, says Thomas Herrmann, an economist at Credit Suisse. And the knock-on effects elsewhere in Europe would be dramatic, adds Zsolt Darvas, from Bruegel, a think-tank, arguing that an Austrian exit could encourage other creditor states such as Holland and Finland to leave the euro as well.

Mr Stronach's best chance of gaining influence rests in the two pro-euro parties that have long dominated Austrian politics - the centre-left Socialist party and the centre-right People's party - failing to win enough votes in next year's election to continue their customary grand coalition. This might enable Mr Stronach to play the role of kingmaker, as Geert Wilders was able to do in Holland.

Yet even if Mr Stronach's party fails to reach power, it could still reshape the Austrian debate about the future of the euro, says Mr Hofer of H&P.

"The government has been reluctant to make the case for bailing out Greece, the ESM and for the other measures needed to continue with the euro," he says. "On the other side of the debate you have Heinz-Christian Strache [the head of Austria's far-right Freedom party], who is very vocal.

"And if you also had a second party with a very strong anti-euro message that could challenge the government into making the case for the euro."

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