The EU imposed bilateral sanctions in February immediately after the formation of the government consisting of the conservative People's Party and the Freedom Party. They appointed a panel to look deeper into Austria's record on human rights and the Freedom Party's role. The report stated that the sanctions had served their purpose by boosting awareness in Austria and elsewhere. It recommended they be lifted promptly, otherwise they would become counterproductive, encouraging nationalism. Behind the scenes, EU officials said they were anxious to get rid of the sanctions ahead of the Sept. 28 referendum to be held in Denmark on joining the Euro currency.
Polls show the decision on a knife-edge.
The perceived bullying of a small country by the EU in Brussels might be enough to tip the balance against the currency, officials feared. Austria has interpreted the report as a victory for its resistance to the sanctions, and for all smaller EU countries who want the right to go their own way politically. Nor could he resist another swipe at Jacques Chirac, with whom he has an ongoing feud. The report blasted factions of the Freedom Party for its xenophobic rhetoric and for using the courts to muzzle its opponents. It also singled out Justice Minister Dieter Boehmdorfer for supporting moves to prosecute politicians who criticized the government.