Austrian Chancellor Sebastian Kurz sees new government by early next year

[VIENNA] Austrian Chancellor Sebastian Kurz said on Friday he expects his conservative People's Party to sign a coalition agreement with the environmentalist Greens and form a new government by mid-January.

"I'm very optimistic about the possibility of forming a government with the Greens," Mr Kurz told reporters.

"Our aim is to have a strong and functioning government that could be ready to be sworn in at the start of January or by mid-January at the latest," he said.

Green party chief Werner Kogler agreed that such a time frame was possible, though neither he nor Mr Kurz were willing to provide more precise dates or a likely distribution of different Cabinet positions.

Mr Kurz's OeVP won the most votes - 37.5 per cent - in the parliamentary election in late September and the Greens scored their best-ever result of 13.9 per cent.

Mr Kurz's previous administration - a coalition between the OeVP and the far-right Freedom Party (FPOe) - came crashing down in May after just 18 months as a result of a corruption scandal that engulfed the junior partner.

The FPOe suffered heavy losses during the September election, while the Greens made big gains due to the environment becoming the top voter concern.

If a coalition is formed between the two parties, it would be the first time for the Greens to enter government in Austria at the national level.

AFP