Austrian conservative leader Kurz to launch coalition talks with Greens

Austrian conservative leader Sebastian Kurz said on Monday he plans to hold formal coalition talks with the Greens, but warned that a deal bringing the left-wing party into government for the first time was uncertain and would require unusual creativity.

Kurz and his People's Party (OVP) came first in a parliamentary election on Sept. 29, but need a coalition partner to form a government that commands a majority in parliament. Exploratory talks with the Greens aimed at laying the groundwork for fully fledged coalition talks ended on Friday.

"We will enter talks with the Greens," Kurz told a news conference after consultations within his party.

The Greens' leadership on Sunday backed formal talks with Kurz's OVP. Had he not taken them up on that offer, Kurz would have had to turn again to a far right reeling from a video sting scandal that blew up its coalition with him, or to the Social Democrats with whom Kurz has fraught relations.

Kurz has also not ruled out forming a minority government.

Few details have emerged from the two sides' talks so far but the outcome is uncertain as the parties have starkly contrasting views on issues ranging from taxation of fossil fuels to immigration and social benefits.

Kurz said that given their differences they would have to find more creative solutions than previous coalitions have, without elaborating.

"If we are able to reach an agreement with the Greens, a certain extra creativity will definitely be necessary," Kurz said. "Here and there, if we reach a deal, it will involve or will have to involve a different and maybe also new form of governing."

The Greens want to overhaul Austria's tax system to better reflect the environmental impact of goods, such as by scrapping favourable treatment of diesel fuel and heating oil. Their leader also told Reuters before the election he wanted Kurz to back a public investment package in environmental measures.

The Greens will want any deal to withstand scrutiny by environmentalists demanding urgent action on climate change. Kurz will want it to reflect the parties' share of the vote - his OVP came first with 37.5% while the Greens came fourth on 13.9%.

Kurz, whose core supporters include big business and farmers, has said environmental measures should not create extra costs for voters including those who drive to work.

It is unclear how long talks will last.