Austrian right 'playing with fire

Relations between Austria and the European Union deteriorated further yesterday when the European commission warned Vienna that any delay in budget contributions would be met with tough action.

The warning came after Austria's finance minister, Karl-Heinz Grasser, a member of the far-right Freedom party, threatened on Sunday to delay EU payments and stymie decision making unless the EU ends its political isolation of Austria.

"I do not want to push it so far that we could be condemned for violating the [EU] treaties. But there could be delays in the payment of our contributions. Being unpunctual, we can do that," Mr Grasser told the Kurier newspaper.

He went on to endorse calls by his former party leader, Jörg Haider, for Austria to use its veto to disrupt EU business.

But the commission yesterday warned Mr Grasser that he was treading on dangerous ground.

"We take such statements extremely seriously. People are playing with fire," said a senior EU source, who claimed Austria would be brought before the European court of justice. The source added: "We also send EU money to Austria and it would be strange if it did not cross our mind to review that."

Other commission sources ruled out any move to suspend payments to Austria, which are mostly in the form of structural aid for poorer regions. But they agreed that court action would be on the agenda.

Vienna is pressing for EU nations to unfreeze diplomatic ties, severed in February over the inclusion of the Freedom party in Austria's government.