Austria's coalition talks between ÖVP, SPÖ, and Neos are entering a critical phase as budget challenges dominate discussions.

Party leaders Karl Nehammer, Andreas Babler, and Beate Meinl-Reisinger have outlined plans to continue negotiations through the holidays.

The country faces a budget shortfall of up to €24 billion, with debates centering on whether to cut spending or introduce new taxes.

While progress has been made in some areas, key issues remain unresolved, particularly in economic and fiscal policies.

Meinl-Reisinger has called for more streamlined negotiations and the inclusion of regional leaders, though this proposal has sparked debate.

Despite the challenges, leaders remain cautiously optimistic about forming a stable government, though no agreement is expected before Christmas.