German Chancellor Angela Merkel congratulated Sebastian Kurz on his victory and the "energetic" modernization of his party, which is aligned with her Christian Democrats. She declined to comment on which coalition arrangement she wanted to see, but said the Freedom Party's strength would be a "major challenge" for its Austrian rivals.

Merkel said the challenge posed by the right-wing populist Alternative for Germany was "manageable" compared with the FPÖ's strength. She hoped for close cooperation with Kurz at the European level.

Read more: Make Austria Great Again — the rapid rise of Sebastian Kurz

Hungary's foreign minister Peter Szijjarto was full of praise for his Austrian counterpart and "friend" Kurz, who at 31 is expected to become Europe's youngest national leader following an election victory on Sunday. 

"He's hijacked neither by hypocrisy nor by political correctness. He's always honest, he's always very direct and I think it's very necessary currently, that European leaders speak directly," Szijjarto told reporters in Brussels.

Szijjarto welcomed Kurz's stance on migration as close to that of Budapest and expected Austria to work more closely with anti-immigration eastern and central European states including Hungary, Poland, Slovakia and the Czech Republic. East-West divides over migration policy have strained unity in the bloc.

Read more: 'Putin's friends' in Austria's right-wing FPÖ achieve strong election result 

Immigration - a key issue in the election

The conservative Austrian People's Party (ÖVP), which Kurz remodeled in his image, won Sunday's election by taking about 32 percent of the vote. To govern he would need to form a coalition with either the center-left Social Democratic Party (SPÖ) or the far-right Austrian Freedom Party (FPÖ) which are both hovering around 26-27 percent pending Thursday's final count. He is expected to favor the FPÖ, whose immigration policies align closely with his own.

Read more: Opinion: A right-wing coalition in Austria threatens the EU 

Migration was a major issue in the election campaign, after Austria became a major transit and destination country during the migration crisis of 2015 and 2016. Kurz favors tough enforcement of the EU's borders and played a major role in introducing the border restrictions in the Balkans which largely shut down the main migration route to Western Europe in 2015/2016.

Congratulations, unease in Brussels

While many European leaders expressed congratulations to Kurz, there was also unease about his potential coalition partner the FPÖ. The far-right, euroskeptic party has previously clashed with the bloc. Back in 2000 when the FPÖ was part of the government, other EU member states at the time temporarily reduced cooperation with Vienna amid concern over anti-immigrant rhetoric.

Read more: Freedom Party of Austria - what you need to know

European Commission President Jean-Claude Juncker said Austria was set to face many challenges, including holding the rotating EU presidency in the second half of 2018. That's when Brussels wants to conclude Brexit talks.

"Therefore I wish you great success in establishing a stable, pro-European government," Juncker wrote to Kurz.

EU Commissioner for Enlargement Johannes Hahn, an Austrian from Kurz's party, sought to allay concerns about Austria moving to the right.

"Each government will have a very pro-European agenda because all the major political parties are very much committed to the European Union," he added.

The far-right in France had a different interpretation of the result, calling the rise of the FPÖ "another welcome defeat for the European Union" despite FPÖ leader Heinz-Christian Strache having taken care to distance himself from radical anti-EU positions during the campaign.

se/rt (Reuters, dpa, AFP, AP)