German Foreign Minister Frank-Walter Steinmeier said all of Europe was "breathing more easily" after Norbert Hofer, the far-right candidate for Austrian President, lost Sunday's election to Green candidate Alexander Van der Bellen.
However, the fact that Van der Bellen won by a mere 31,000 votes among the 4.64 million cast has triggered renewed concerns about the rise of far right parties in Europe.
The final result put Hofer, of the Freedom Party, on 49.7 per cent and Van der Bellen on 50.3 per cent - the biggest vote share for the far right in Europe since 1945.
Reaction from the EU was swift, with Reinhard Bütikofer and Monica Frassoni, co-Chairs of the European Green Party, saying the election "will probably be remembered as one of the closest Europe has ever seen."
They said, "It comes with a decisive symbolic message for the wider European public: Europe's values and our shared republican and democratic goals can be defended against insurgent right-wing populism.
"The narrative of a European tilt to the far right is wrong. But, we have to break with the status-quo laziness and initiate credible policies of sweeping political, economic, social and environmental reforms to successfully combat extremism."
They warned that van der Bellen now faces a "difficult task in reuniting Austrian citizens."
Further comment came from French Prime Minister Manuel Valls, who said it was a "relief" to see Austrians "reject populism and extremism."
A leader in Belgium's most-read daily, Het Laatste Nieuws, argued that "there is no reason to celebrate. Half of Austria's population has voted against Europe being all-powerful, which should set the alarms off across the EU."
Pieter Cleppe, of the UK-based think tank Open Europe, said "If the mainstream governs badly, the fringe profits."
Elsewhere, Jan Gerhard, an analyst at the UK-based organisation, IHS Country Risk, said Austria's election result "confirms a wider trend across Europe where an increasing number of people feel disillusioned by centrist parties and political elites, boosting right-wing parties."
Gerhard says, "While the Austrian presidential office is a predominantly ceremonial role, the election added to the heightened levels of political instability in the country."
He says that although the Freedom Party's strong performance in the presidential election would not be "repeatable" in a general election in the long term, the party has been clearly strengthened in recent months and polls indicate that the FPÖ would come first if Austria were to hold general election now.
He said, "This adds to the already high pressure on the newly appointed chancellor who will have to consolidate his own party and improve collaboration with the ÖVP to counteract the strong opposition.
"The election result also confirms a wider trend across Europe where an increasing number of people feel disillusioned by centrist parties and political elites.
"It is likely that this development will continue to boost support for right-wing parties which also benefit from a change in traditional voting behaviour as ideological divisions between the left and the right are increasingly blurred by socio-economic factors such as concerns over austerity, migration, and labour-market reforms."
Meanwhile, Charles Grant, of the Centre for European Reform think tank, said the election was clearly a protest vote, cast as "trade, migrants and globalisation are increasingly unpopular."
European Council President Donald Tusk, in a statement, said he hopes the country can benefit from a period of political stability.