After striking a coalition deal that will significantly toughen Vienna’s stance on immigration and asylum seekers, the far-right nationalist Freedom party will control several powerful ministries when the new government is sworn in on December 18.

In a breakthrough for the Eurosceptic Freedom party, it will govern together with the centre-right People’s party of 31-year-old chancellor-elect Sebastian Kurz.

As reported by The Financial Times, the Freedom party will take control of the defence, interior and foreign ministries while its leader Heinz-Christian Strache, who has warned of Austria’s “Islamification”, will become vice-chancellor.

The progress and policies of Kurz’s government will be closely watched around the EU, where mainstream politicians have grown increasingly concerned about the rise of nationalist and populist political forces.

Pierre Moscovici, the EU’s centre-left commissioner for economics, warned that the Freedom party’s presence should “arouse the vigilance” of democrats who supported European values. “The presence of the extreme right in power is never trivial,” he said.

Marine Le Pen, the leader of France’s National Front who failed in her presidential bid in May, said Freedom’s government role in Austria was “excellent news for Europe”.

Kurz won Austria’s national election in October after a campaign promising to halt illegal immigration, as well as tax cuts and institutional reforms. He is slated to meet EU leaders in Brussels on December 19.

In a separate report, the Agence France-Presse (AFP) noted the coalition also wants a “slimmer state” and a “brake on bureaucracy”, with the aim of cutting state expenditure by several billion euros. Lawmakers will see their salaries frozen.

Austria, the programme says, is the “world champion when it comes to regulation and limiting freedom and personal responsibility”. It no longer has the lowest unemployment rate in the EU.

Looser labour laws will see workers be able to work up to 12 hours a day in what the parties say is a “win-win” for employees and employers.