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Report: Austria close to conservative-far right coalition deal

A coalition deal between Austria's conservative People's Party and the anti-immigration Freedom Party could be formed before Christmas, after the far-right group agreed to more positive policies toward the European Union, media reports said.

"We're on home stretch," Austrian acting foreign minister Sebastian Kurz, who, at 31, looks set to become the world's youngest head of government, told reporters Dec. 15, according to Bloomberg News. "I'm very optimistic that we can reach our goal to complete the coalition talks before Christmas." The deal could be closed as early as Dec. 15 evening or over the weekend, Reuters reported, citing people familiar with the coalition talks.

"It was important to the president, and to me, that the new government have a pro-European orientation. From my point of view, that has been secured," Kurz said after meeting with President Alexander Van der Bellen, according to Reuters.

A coalition government including the Freedom Party, once a political pariah, could lead to tighter immigration controls, a cut in the share of income and social security taxes to 40% of economic output from 43%, and looser labor laws, Bloomberg News said. But the party has backed away from calls for a Brexit-style referendum on leaving the EU.

Kurz's party will likely retain the finance and economy ministries as well as EU policy oversight while the Freedom Party, led by Heinz-Christian Strache, will likely name the foreign minister and take over the interior ministry that helps supervise domestic security and border control, the report added.

Kurz led the People's Party to victory in October's elections, edging out the Freedom Party and the incumbent Social Democrats. He campaigned on a platform that took a hard-line stance on migration, promising to cut refugee benefits and restrict foreign worker access to Austria.