1931: Seipel’s Coalition Deal

Austria’s economic crisis reached its peak in June 1931 with the collapse of the Austrian Creditanstalt bank. The Ender-Schober government resigned on June 19. Federal President Wilhelm Miklas entrusted the severely injured former Chancellor Ignaz Seipel with the formation of the government. Seipel tried to build a coalition of as many parties as possible, including the Social Democrats, in order to save the republic and insisted that Otto Bauer join the government as Vice Chancellor. In a government that he would lead, Seipel planned the admission of four Social Democrats, three Christian Socials, one member from the Greater German People’s Party and one member from the Landbund (Rural Federation). Although there were strong forces within social democracy pleading to accept Seipel’s deal (for example, Karl Renner) – a topic that has remained controversial among researchers – it was Otto Bauer's decision that prevailed. The Social Democrats declined on the grounds that they did not want to co-administer the affairs of collapsing capitalism. Additionally, they did not trust Seipel. The rise of fascism and National-Socialism should have made a joint coalition on both sides – even if only for a short time – imperative for solving economic problems and stabilising democracy. However one viewed Seipel’s deal, Bruno Kreisky later said, “in hindsight, it seems clearly wrong to me that people did not advocate more strongly for a compromise to be in government at such a critical moment.”

In the end, the former governor of Lower Austria, Karl Buresch, formed a bourgeois government.