EU states lift Austrian sanctions

Schuessel said it was a 'success' for Austria

Austria's European Union partners have lifted diplomatic sanctions that were imposed on the country seven months ago when the far-right Freedom Party entered the ruling coalition.

The move had been expected since an EU panel of expert advisers said on Friday that the sanctions were proving counter-productive.

The Freedom Party, formerly led by the outspoken governor of Carinthia, Joerg Haider, has been criticised for being racist and xenophobic.

The nature of the party and its uncertain evolution are still grounds for grave concern

EU states

The EU said however that the Freedom Party was still cause for "grave concern."

It said there was a need to maintain "special vigilance" on the party but did not call for an official observation mechanism, which Austria had said was unacceptable.

Austrian 'triumph'

In Vienna, Austrian Chancellor Wolfgang Schuessel described the EU statement as "a great success for Austria".

Riess-Passer: triumph of common sense

He said the EU was now "a family" again.

Vice-Chancellor Susanne Riess-Passer, leader of the Freedom Party, said the decision was "a triumph of common sense."

Leaders of the opposition Greens and Social Democrats also welcomed the move, saying Austria's isolation had simply served to strengthen the popularity of the coalition parties.

Canada has also announced that it is following the European Union in lifting sanctions against Austria.

Foreign Minister Lloyd Axworthy said it was time for the two countries "to reengage at the ministerial level and resume full bilateral coperation".

No apology needed

In Berlin, the German Government strongly defended the imposition of sanctions.

Joerg Haider: shocked Europe with his views on Nazis and immigration

In a parliamentary debate, Foreign Minister Joschka Fischer sharply rejected calls from opposition parties to apologise to Austria for what they described as a "mistake".

Mr Fischer said that while the Austrian Government was legitimate, it should not be taken for granted that a party which had politically exploited hostility toward foreigners should participate in government in a united Europe.

Denmark decider

Diplomats said that France, which first led the call for sanctions and is the EU's current president, had wanted to attach some conditions to the normalisation of relations.

But other countries led by Denmark - where the sanctions were seen by many as EU bullying - pushed for a complete lifting, which they finally won.

EU states may have been spurred to act to remove the issue ahead of a 28 September referendum on Denmark joining the single European currency.

The move may increase the likelihood of Denmark voting "yes" for the euro.

Austria had threatened to hold a potentially divisive referendum on the sanctions if they were not lifted quickly.