Two German newspapers published video of the leader of far-right Freedom Party appearing to offer favours to a purported Russian investor.

Austria's president on Sunday recommended a new election be held in early September, saying he wanted to restore trust in the government after a video scandal led to the resignation of the vice chancellor.

Austria's vice chancellor and longtime far-right leader, Heinz-Christian Strache, said on Saturday he was stepping down over video footage that threatened to bring down the right-wing coalition government.