The process of government formation after the general elections to the Lower House of Parliament, the Nationalrat, on 3 October 1999 could not be brought to an end before the turn of the year. The conservative party, the ÖVP, which had been junior partner in a grand coalition with the social democratic party, the SPÖ, since 1987, had declared during its election campaign that it would go into opposition if it did not finish above third place. As a matter of fact, the populist right-wing FPÖ managed to surpass the ÖVP by 414 votes and for the first time in electoral history became the second strongest party at the national level (see Political Data Yearbook 1999). Up to this time, the FPÖ under its charismatic party chairman Jörg Haider had been considered as unacceptable for government participation because of his vehement attacks against the ‘old parties’ and other ‘pillars’ of the democratic republic, in particular social partnership, because of his radical ideas aiming to establish an authoritarian presidential republic, and because of his ambiguous stance towards National Socialism. Expecting heavy international protests in case of government participation of the FPÖ, Federal President Thomas Klestil favoured a continuation of the incumbent SPÖ–ÖVP coalition, even if the political climate between the two parties and the reform capacity of the government had deteriorated in recent years.