area handbook series Austria a country study Austria a country study Federal Research Division Library of Congress Edited by Eric Solsten and David E. McClave Research Completed December 1993 On the cover: Coat of arms of the Republic of Austria Second Edition, First Printing, 1994. Library of Congress Cataloging-in-Publication Data Austria : a country study / Federal Research Division, Library of Con- gress ; edited by Eric Solsten and David E. McClave. — 2nd ed. p. cm. — (Area handbook series, ISSN 1057-5294) (DA pam ; 550-176) "Supersedes the 1976 edition of Area handbook for Austria, coauthored by Eugene K. Keefe et al." — T.p. verso. "Research completed December 1993." Includes bibliographical references (pp. 273-286) and index. ISBN 0-8444-0829-8 1. Austria. I. Solsten, Eric, 1943- . II. McClave, David E., 1947- . III. Library of Congress. Federal Research Division. IV. Area handbook for Austria. V. Series. VI. Series: DA pam ; 550-176. DB17.A8 1994 943— dc20 94-21665 CIP Headquarters, Department of the Army DA Pam 550-176 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 Foreword This volume is one in a continuing series of books prepared by the Federal Research Division of the Library of Congress under the Country Studies/ Area Handbook Program sponsored by the Department of the Army. The last two pages of this book list the other published studies. Most books in the series deal with a particular foreign country, describing and analyzing its political, economic, social, and national security systems and institutions, and examining the interrelation- ships of those systems and the ways they are shaped by cultural factors. Each study is written by a multidisciplinary team of social scientists. The authors seek to provide a basic understanding of the observed society, striving for a dynamic rather than a static portrayal. Particular attention is devoted to the people who make up the society, their origins, dominant beliefs and values, their com- mon interests and the issues on which they are divided, the nature and extent of their involvement with national institutions, and their attitudes toward each other and toward their social system and political order. The books represent the analysis of the authors and should not be construed as an expression of an official United States govern- ment position, policy, or decision. The authors have sought to adhere to accepted standards of scholarly objectivity. Corrections, additions, and suggestions for changes from readers will be wel- comed for use in future editions. Louis R. Mortimer Chief Federal Research Division Library of Congress Washington, DC 20540-5220 iii Acknowledgments This edition supersedes the Area Handbook for Austria, published in 1976. The authors wish to acknowledge their use of portions of that edition in the preparation of the current book. The authors also are grateful to individuals in various United States government agencies who gave their time and special knowledge to provide information and perspective. These individu- als include Ralph K. Benesch, who oversees the Country Studies/ Area Handbook Program for the Department of the Army. Frank J. LaScala reviewed portions of the manuscript and provided mili- tary photographs. In addition, the authors wish to thank various members of the staff of the Embassy of Austria in Washington, especially Hedwig Sommer, and of the Austrian National Tourist Office in New York for their assistance. Various members of the staff of the Federal Research Division of the Library of Congress assisted in the preparation of the book. Sandra W. Meditz made helpful suggestions during her review of all parts of the book, as did Andrea M. Savada. Tim L. Merrill assisted in the preparation of some of the maps, checked the con- tent of all the maps, and reviewed the sections on geography and telecommunications. Thanks also go to David P. Cabitto, who provided graphics support; Wayne Horn, who designed the cover and chapter art; Marilyn L. Majeska, who managed editing and edited portions of the manuscript; Laura C. Wells, who helped pre- pare the Country Profile, tables, and Bibliography; Andrea T. Mer- rill, who managed production; and Barbara Edgerton, Alberta Jones King, and Izella Watson, who did the word processing. Others who contributed were Harriett R. Blood and the firm of Greenhorne and O'Mara, who assisted in the preparation of maps and charts; Martha E. Hopkins, who edited portions of the manuscript; Sheila L. Ross, who performed the final prepublica- tion editorial review; and Joan C. Cook, who prepared the Index. Linda Peterson of the Library of Congress Composing Unit pre- pared camera-ready copy under the direction of Peggy Pixley. The inclusion of photographs was made possible by the generosity of various public and private agencies. v Contents Page Foreword iii Acknowledgments v Preface xiii Country Profile XV Introduction xxi Chapter 1. Historical Setting 1 Steven R. Harper THE ALPINE-DANUBIAN REGION BEFORE THE HABSBURG DYNASTY 4 The Celtic and Roman Eras 4 The Early Medieval Era 5 The Holy Roman Empire and the Duchy of Austria . 6 RISE OF THE HABSBURG EMPIRE 7 The Habsburg Dynasty in the Late Medieval Era ... 7 Territorial Expansion, Division, and Consolidation . . 8 The Protestant Reformation in the Habsburg Lands . . 9 The Turkish Threat 10 THE COUNTER-REFORMATION AND THE THIRTY YEARS' WAR 11 Division and Rebellion 11 The Thirty Years' War, 1618-48 11 The Peace of Westphalia 12 THE BAROQUE ERA 13 Political and Religious Consolidation under Leopold . . 13 The Turkish Wars and the Siege of Vienna 14 The War of the Spanish Succession 14 The Pragmatic Sanction and the War of the Austrian Succession, 1740-48 15 THE REFORMS OF MARIA THERESA AND JOSEPH II 16 Baroque Absolutism and Enlightened Despotism .... 16 The Strategic Impact of the Reform Era 17 THE HABSBURG EMPIRE AND THE FRENCH REVOLUTION 18 The Napoleonic Wars 18 The Congress of Vienna 19 vii AUSTRIA IN THE AGE OF METTERNICH 21 International Developments, 1815-48 21 Domestic Policies 21 THE REVOLUTION OF 1848 AND NEOABSOLUTISM . . 22 Revolutionary Rise and Fall 22 The Failure of Neoabsolutism 24 Loss of Leadership in Germany 25 AUSTRIA-HUNGARY TO THE EARLY 1900s 26 The Founding of the Dual Monarchy 26 Final Defeat in Germany and Reconciliation with Prussia 27 The Eastern Question 29 Internal Developments in Austria 30 THE FINAL YEARS OF THE EMPIRE AND WORLD WAR I 33 The Crisis over Bosnia and Hercegovina 33 World War I 33 The End of the Habsburg Empire and the Birth of the Austrian Republic 35 THE FIRST REPUBLIC 35 Overview of the Political Camps 35 The Foundation of the First Republic 38 Political Life of the 1920s and Early 1930s 39 The End of Constitutional Rule 41 Growing German Pressure on Austria 43 THE ANSCHLUSS AND WORLD WAR II 44 Absorption of Austria into the Third Reich 44 Nazi Economic and Social Policies 45 Repression and Compliance 47 World War II and the Defeat of Nazi Germany 47 RESTORED INDEPENDENCE UNDER ALLIED OCCUPATION 48 Foundation of the Second Republic 48 Four Power Occupation and Recognition of the Provisional Government 50 The 1945 Election and Consolidation of the Austrian Government 51 Consolidation of Democracy 52 Austria's Integration with the West 54 The 1955 State Treaty and Austrian Neutrality 55 THE GRAND COALITION AND THE AUSTRIAN PEOPLE'S PARTY CODA, 1955-70 56 Foreign Policy in the Late 1950s and the 1960s 56 Elections and Parties 58 Vlll Domestic Tranquillity under the Grand Coalition .... 59 THE KREISKY YEARS, 1970-83 60 Electoral Politics in the Kreisky Era 60 Domestic Issues 61 Foreign Policy 62 End of the Kreisky Era 63 Chapter 2. The Society and Its Environment 65 Lonnie Johnson GEOGRAPHY 69 Landform Regions 70 Human Geography 73 Climate 75 Ecological Concerns 76 AUSTRIAN NATIONAL IDENTITY 78 DEMOGRAPHY 80 Demographic Development 80 Immigration 83 Emigration 86 SOCIAL MINORITIES 86 Official Minority Groups 87 Other Minorities 89 Attitudes Toward Minorities 93 SOCIAL STRUCTURE 94 FAMILY LIFE 96 Family Developments after the 1960s 96 Status of Women 99 RELIGION 101 EDUCATION 104 SOCIAL SECURITY 109 Employment, Unemployment, and Pension Benefits 110 Health and Health Insurance Ill Family Benefits 113 HOUSING 114 Chapter 3. The Economy 117 W.R. Smyser ECONOMIC GROWTH AND GOVERNMENT POLICY 121 Historical Background 121 Developments During the 1970s and 1980s 126 The New Policies 127 IX The Magic Pentagon 130 The Subsidy Policy 130 Foreign Workers in Austria 132 PRINCIPAL ECONOMIC INTEREST GROUPS 133 The Chambers of Commerce 134 The Chambers of Agriculture 134 The Chambers of Labor 135 The Professions 135 The Austrian Trade Union Federation 136 Works Councils 137 The Federation of Austrian Industrialists 137 SOCIAL PARTNERSHIP 138 STRUCTURE OF THE ECONOMY 140 The Agricultural Sector 143 The Industrial Sector 146 Energy 149 The Services Sector 150 FOREIGN ECONOMIC RELATIONS 159 Foreign Trade and the Balance of Payments 159 Austria and European Integration 160 Openings Toward the East 162 Chapter 4. Government and Politics 165 John F. Schaettler CONSTITUTIONAL FRAMEWORK 168 GOVERNMENT INSTITUTIONS 171 The Federal President 172 Chancellor and Cabinet 174 Nationalrat 175 Bundesrat 179 Bundesversammlung 179 Judicial System 180 Civil Service 183 Provincial Government 184 Local Government 185 Electoral System 186 POLITICAL DYNAMICS 188 The Social Democratic Party of Austria 190 The Austrian People's Party 194 The Freedom Party of Austria 197 The Green Parties 200 Political Developments since 1983 202 x MASS MEDIA 210 Newspapers and Periodicals 210 Radio and Television 212 FOREIGN RELATIONS 213 Foreign Policy During the Kreisky Era 213 New Focus on Europe 216 Regional Issues 219 Chapter 5. National Security 221 Jean R. T artier HISTORICAL BACKGROUND 224 The Habsburg Military 224 Two World Wars, 1914-18 and 1939-45 226 STRATEGIC CONCEPTS AND MISSIONS OF THE AUSTRIAN ARMED FORCES 228 NEUTRALITY AND THE ARMED FORCES 232 NATIONAL DEFENSE 233 Army 235 Personnel, Conscription, Training, and Reserves .... 237 Army Equipment 241 Air Force 242 Uniforms, Ranks, and Insignia 244 Military Justice 245 The Defense Budget 247 Domestic and Foreign Sources of Military Equipment 248 INTERNAL SECURITY 249 Penal Codes 252 Criminal Court Proceedings 253 Police 253 Incidence of Crime 257 Penal System 257 Appendix. Tables 261 Bibliography 273 Glossary 287 Index 291 Contributors 311 List of Figures 1 Administrative Divisions of Austria, 1993 xx 2 Europe in the Sixteenth Century 10 xi 3 Austrian Empire, 1815 20 4 Austria-Hungary, 1867-1918 28 5 Topography and Drainage 72 6 Population by Age and Gender, 1990 82 7 Population by Age and Gender, Projected 2020 84 8 Structure of the Education System, 1993 108 9 Economic Activity, 1993 148 10 Transportation System, 1993 154 11 Structure of Government, 1993 172 12 Organization of National Defense, Planned 1995 236 13 Major Military Installations, Planned 1995 238 14 Military Ranks and Insignia, 1993 246 xii Preface Like its predecessor, this study attempts to review the history and treat in a concise and objective manner the dominant social, political, economic, and military aspects of Austria. Sources of in- formation included books, scholarly journals, foreign and domes- tic newspapers, official reports of government and international organizations, and numerous periodicals on Austrian and inter- national affairs. Chapter bibliographies appear at the end of the book, and brief comments on some of the more valuable sources recommended for further reading appear at the end of each chap- ter. A glossary also is included. Spellings of place-names used in the book are in most cases those approved by the United States Board on Geographic Names. Ex- ceptions are the use of Vienna rather than Wien, Danube rather than Donau, Lake Constance rather than Bodensee, and the En- glish names of four Austrian provinces rather than their German names: Carinthia rather than Karnten, Lower Austria rather than Niederosterreich, Styria rather than Steiermark, and Upper Aus- tria rather than Oberosterreich. Measurements are given in the metric system. A conversion ta- ble is provided to assist readers unfamiliar with metric measures (see table 1, Appendix). The body of the text reflects information available as of Decem- ber 31, 1993. Certain other portions of the text, however, have been updated. The Introduction discusses significant events that have occurred since the completion of the research, the Country Profile and Glossary include updated information as available, and the Bibliography lists recently published sources thought to be par- ticularly helpful to the reader. xiii Country Profile Country Formal Name: Republic of Austria. Short Form: Austria. Term for Citizens: Austrian(s). Capital: Vienna. NOTE — The Country Profile contains updated information as available. XV Geography Size: Approximately 83,859 square kilometers. Topography: Most of country Alpine or sub- Alpine; heavily wood- ed mountains and hills cut by valleys of fast-flowing rivers. Plains around Vienna and Danube Valley in northeast only lowland areas and contain most of population. Danube, flowing east through northern provinces and Vienna, principal river. Of total area, 20 percent arable land, 29 percent pasture, 44 percent forest, and 7 percent barren. Climate: Continental weather systems predominate; temperatures and rainfall vary with altitude. Temperate, cloudy, cold winters with frequent rain in lowlands and snow in mountains; cool sum- mers with occasional showers. Humidity highest in wetter western regions, diminishing toward east. Society Population: In May 1991 census, population 7,795,786. Language: Of native-born population, 99 percent German- speaking with small minorities speaking Serbo-Croatian or Slovenian. Religion: Of native-born and foreign-born population combined, about 78 percent Roman Catholic, 5 percent Protestant, 8 percent other (includes Jewish, Muslim, and Orthodox), and 9 percent no denomination. Education: Public elementary, secondary, and higher education free; nine years compulsory. By ninth year, students usually in preuniversity academic schools or vocational education. Literacy 99 percent for population over age fifteen. Health and Welfare: Social insurance covers all wage-earners and salaried employees, self-employed workers, and dependents. Cover- age compulsory. State-required health insurance covers 99 percent of population. In 1990 average life expectancy almost seventy-six years (seventy-two for males and seventy-nine for females). Economy Gross National Product (GNP): US$174.8 billion in 1992 with 2 percent growth rate; US$22,110 per capita with 2.4 percent growth rate. Agriculture and Forestry: Agriculture and forestry accounted for 2.8 percent of gross domestic product (GDP) and 7.4 percent of xvi labor force in 1991. Principal crops: grains, fruit, potatoes, sugar beets, sawn wood, cattle, pigs, and poultry. About 80 to 90 per- cent self-sufficient in food. Industry: Major sector with 36.3 percent of GDP and 36.9 per- cent of employment in 1991. Services: Services accounted for 60.9 percent of GDP and 55.8 percent of employment in 1991 . Largest growth sector; 10 percent growth in share of GDP and 1 4 percent growth in share of labor force since 1970. Major Trading Partners: Most trade with European Union (EU). Germany largest single trading partner (in 1993 accounted for 38.9 percent of exports and 41.5 percent of imports), followed by Italy and Switzerland. Imports: US$48.6 billion in 1993. Major imports: machinery and equipment, manufacturing products, chemical products, fuels and energy, and foodstuffs. Exports: US$40.2 billion in 1993. Major exports: machinery and equipment, paper and paper products, transport equipment, metal manufactures, and textiles and clothing. Balance of Payments: Current account deficit US$900 million in 1993. Persistent trade deficit. Per capita income from tourism highest in world; helps balance deficit. General Economic Conditions: Stable economy with generally good rates of growth; high living standards, comparable with other coun- tries of Western Europe. In 1992 real GDP growth 1.6 percent, in- flation 4.1 percent, and unemployment 5.9 percent; in 1993 real GDP growth -0.3 percent, inflation 3.6 percent, and unemploy- ment 6.8 percent. Currency and Exchange Rate: Schilling. In March 1994, exchange rate US$1 = S12.1. Transportation and Communications Railroads: 6,028 kilometers total (94 percent standard-gauge 1.435 meter and 6 percent 0.760 meter), of which about 5,388 kilometers state owned and 640 kilometers privately owned. Highways: As of December 1992, 108,000 kilometers of roads, of which about 1,800 kilometers major highways, 9,900 kilo- meters main roads, and 25,900 kilometers secondary roads. xvn Inland Waterways: More than 350 kilometers, carrying approx- imately one-fifth of total trade. Danube River only navigable water- way with barges carrying up to 1,800 tons; important connection with North Sea, Germany, and Black Sea. Ports: Vienna major river port. Civil Airports: Fifty-five total; twenty with permanent- surface run- ways. Main international airport at Vienna-Schwechat, southeast of Vienna; international flights also from Graz, Innsbruck, Klagen- furt, Linz, and Salzburg. Telecommunications: Highly developed and efficient system with 4 million telephones, twenty-seven radio stations, forty-seven tele- vision stations, and four satellite ground stations. Government and Politics Government: Federal republic with nine provinces, each with own assembly and government. 1920 constitution, revised 1929, forms constitutional basis of government. Government consists of execu- tive, legislative, and judicial branches. President head of state, elected every six years by popular vote. Executive headed by chancellor (prime minister) and cabinet, which reflect party composition of parliament. Legislative power vested in bicameral parliament con- sisting of Nationalrat (National Council) and Bundesrat (Federal Council). Nationalrat primary legislative power, with 183 popularly elected members; Bundesrat represents the provinces with sixty- three members elected by provincial assemblies. Independent judiciary. Legal System: Supreme Court for civil and criminal cases, Adminis- trative Court for cases involving administrative agencies, and Consti- tutional Court for constitutional cases. Four higher provincial courts, seventeen provincial and district courts, and numerous local courts. Politics: Dominated by Social Democratic Party of Austria (Sozial- demokratische Partei Osterreichs — SPO) and Austrian People's Party (Osterreichs Volkspartei — OVP); government coalition of these two parties since 1987. Freedom Party of Austria (Freiheit- liche Partei Osterreichs — FPO) gaining strength despite split in early 1993 with formation of The Liberal Forum (Das Liberale Forum). Environmentalists also represented in parliament. Foreign Relations: Founding member of European Free Trade Association (EFT A) and member of United Nations (UN) and European Economic Area (EEA). Admission into European Union (EU) expected in January 1995. xvin National Security Armed Forces: In 1994 defense forces consisted of 51,250 troops, of which 44,000 were in Bundesheer (Federal Army; including 19,500 conscripts) and 7,250 in air force (including 2,400 con- scripts). No women serve in armed forces. Treaty Commitments: State Treaty of 1955 prohibits union with Germany. Constitutional Law of October 26, 1955, declares per- manent neutrality, rejects participation in any military alliance, and prohibits establishment of any foreign military base on terri- tory. Conscription and Reserves: Males obliged to perform total of six months of active duty and two months of reserve training (or eight months of active duty with no reserve training). Ready reserves (ready within seventy-two hours) 1 19,000 in 1994. Each year 66,000 receive refresher training. Additional 960,000 under age fifty with reserve training (all ranks). Standing Forces: According to The Military Balance, 1994-1995, army consists of three corps (one organized as mechanized divi- sion consisting of three armored infantry brigades) and one provin- cial military command. Air force (part of Bundesheer) has one air division headquarters, three air regiments, and three air defense battalions. Reorganization of Bundesheer under New Army Struc- ture to be completed in 1995. Troops Abroad: In 1994 Austrian military troops serving in UN peacekeeping forces included deployment in Cyprus, Golan Heights, Iraq-Kuwait border, and Rwanda. Sources of Equipment: Heavily dependent on foreign suppliers: United States, 29 percent; Western Europe, excluding Germany, 67 percent. State Treaty precludes arms imports from Germany. Sweden primary source of aircraft and missiles. Defense Expenditures: In 1993 defense budget US$1.63 billion, lowest proportion of GNP (1 to 2 percent) in Europe, except for Luxembourg. Internal Security: Most important law enforcement agencies part of national government and organized by Ministry for Interior. Federal Police, oriented to urban areas; Gendarmerie, responsi- ble for rural areas and towns without federal or local contingent; State Police, concerned with counterterrorism and counterintel- ligence. xix s xx Introduction THE AUSTRIAN PEOPLE ENDURED a series of political, so- cial, and economic upheavals between the outbreak of World War I and the division of Europe into two hostile blocs shortly after World War II. In the next few decades, however, they succeeded in establishing a prosperous and stable democracy. Indeed, they were so successful that by the 1970s Austria had come to be wide- ly characterized as "an island of the blessed" because of the material well-being of its people and the virtual absence of social conflict. Devised in the first decade after War World II, the system of governing — the social partnership — that made this achievement pos- sible gave each of Austria's main social groups a decisive say in the management of the country's affairs. In marked contrast to the social tensions of the interwar period, which culminated in a brief civil war in 1934, in the postwar era the representatives of agriculture, commerce, and labor were able to work together har- moniously for the benefit of all. By the 1990s, the decades of prosperity engineered through the system of social partnership had given Austrians one of the world's highest living standards. Sus- tained prosperity and social peace yielded yet another achievement, the creation of a viable nation supported by the overwhelming majority of its citizens. Thus, the Austrian state assembled out of the ruins of the Habsburg Empire at the end of World War I — said by many to be "the state no one wanted" — was replaced by one that gradually won the allegiance of its citizens by providing them with a long period of uninterrupted peace and prosperity. At the beginning of the twentieth century, the territory occupied by present-day Austria had been ruled by the Habsburg Dynasty for more than 600 years. This territory was the core of an empire that at its height in the sixteenth century included Spain and its colonies in the New World, and much of Italy and the Low Coun- tries. Although a military defeat at the hands of Prussia in 1866 had weakened Emperor Franz Joseph I (r. 1848-1916) and had obliged him to make such significant concessions to his Hungari- an subjects the following year that the lands he ruled came to be known as Austria-Hungary (also seen as the Austro-Hungarian Em- pire), his empire remained one of Europe's great powers. In the last decades of the nineteenth century, it allied itself with Germany and Italy and in the years leading up to World War I actively pur- sued an aggressive foreign policy to extend Habsburg influence far- ther south in the Balkans. xxi The Habsburg Empire was supranational in nature. Many eth- nic groups lived within its boundaries, including Germans, Czechs, Slovaks, Poles, Hungarians, Slovenes, Croats, Serbs, and Roma- nians. Most of the empire's German-speaking subjects lived in the territory that makes up present-day Austria, but significant num- bers also lived in Bohemia, Moravia, and Silesia, and smaller num- bers were found throughout the empire. Although the Hungarians had been granted the right to govern themselves and to have a sig- nificant say in determining the empire's affairs, German speakers remained dominant within the empire. Their dominance had gone on for centuries, although they made up only one-fourth of the population. Perhaps owing to their privileged status, the German speakers were more loyal to the empire than any other ethnic group. They did not see themselves as Austrian, however, but instead felt a strong local patriotism for their native provinces. They also thought of themselves as belonging to the German cultural com- munity, a community found not only in Austria but also in Ger- many and Switzerland, and anywhere else German was spoken. Germany's unification in 1871 under Prussian leadership after many centuries of division was only the most notable result of the powerful force of nationalism that appeared in many areas of Eu- rope in the nineteenth century. Just to the south of the Habsburg Empire, for example, the many small states of the Italian penin- sula had come together to form a united Italy. The nationalist ideal also came to touch with an ever-growing strength many of the peo- ples living within the Habsburg Empire. It was an ideal complete- ly at variance with the supranational foundations of the empire and would in the end lead to its destruction. As nationalism gained in influence, growing numbers of the empire's inhabitants came to believe that they more rightly owed allegiance to their own ethnic group than to a ruling elite speaking a different language. In response to the nationalist movements emerging within Austria-Hungary, the empire's German speakers formed their own political groups, often described as German nationalist-liberal, to protect their rights. Because the German-speaking community re- mained loyal to Emperor Franz Joseph, few of its members wished to see the areas in which they lived secede from the empire and become part of the newly united and powerful Germany. Their aims were to maintain their privileged position within the empire and to ensure that the German language did not lose ground to the empire's other languages. In addition to the German nationalist-liberal parties active in the late nineteenth century, German speakers created political par- ties that had other goals. The Social Democratic Workers' Party xxn and the Christian Social Party were the most important political parties. The former sought to establish a socialist society based on Marxist principles. The latter sought to improve society, particu- larly (but not exclusively) rural society, by emphasizing Christian values and traditions. Because the memberships of both parties were largely German speaking, they had some sympathy with the aims of the empire's German nationalists. Their main concerns, however, were elsewhere. World War I was set off by the June 1914 assassination of Arch- duke Franz Ferdinand, heir to the Habsburg throne, by Serbian nationalists. Within weeks, a system of interlocking alliances set the Great Powers of Europe against one another. By the war's end in November 1918, the Habsburg Empire had ceased to exist. Some of the empire's ethnic groups formed new nations. A German Aus- trian state was established on October 21, 1918. On November 12, 1918, one day after the war ended, the new state was declared a republic. The new Austrian state was only one-fourth as large as the em- pire. In the eyes of many of its citizens, it was a mere "rump state" and was neither economically nor socially viable. Many argued that it logically should be part of Germany. The war's victors — the United States, Britain, and France — feared such a union would strengthen Germany, and they prohibited it. They also required that the new state be called the Republic of Austria rather than the German Austrian Republic. Despite the Allied prohibition, desire for union with Germany remained strong in Austria, par- ticularly among German nationalist-liberals and socialists. Shorn of many of the traditional economic connections it had had within the empire, Austria was poorly positioned to prosper. Its struggling economy was also hurt by the European economic slump of the early 1920s. The new republic's economic troubles diminished the support it needed from its citizens to survive. Rather than joining together to build a nation, Austrians sought social and economic security by withdrawing into the three large social groups, or camps {Lager), that predated the war: German nationalist-liberal, socialist, and Christian Social. Austrians usually gave their loyalty to the Lager in which they were born rather than to the country as a whole. Each Lager maintained a network of organizations such as credit unions, sports clubs, home mortgage funds, and the like that ministered to the economic and social needs of its members. Thus, contact among Austrians of different social backgrounds was lessened. The hostility the groups felt for one another increased their in- ner cohesion. Socialist plans to establish a society founded on xxiii Marxist principles frightened the right-wing German nationalist- liberals and Christian Socials and heightened their determination to defend their property. Socialist and German nationalist-liberal anticlericalism caused Christian Socials to be more resolute in defending their religious values. German nationalist-liberal and Christian Social anti-Semitism caused many Austrian Jews to be- come active in the socialist movement. This in turn meant that many on the right came to hate socialism even more because they saw it as a Jewish-controlled conspiracy to subvert all cherished values. In response to the animosity the Lager felt for one other, armed militias were soon formed. The right-wing militia joined at times with state forces to oppose the socialists. Organized violence be- came frequent as the Christian Socials combined with the German nationalist-liberals to exclude socialists from the national govern- ment. Socialists governed only in Vienna. The many leftist social measures they enacted in "Red Vienna" further hardened con- servative opposition. A failed uprising in February 1934, in which the socialists sought to stand up to the central authorities, marked the definitive end of Austrian parliamentary democracy, already partially suspend- ed the previous year. The Christian Social Engelbert Dollfuss es- tablished a right-wing authoritarian regime that attempted to govern Austria according to Christian principles. Austrian National So- cialists, or Nazis, who desired to unite Austria with Germany, then ruled by Adolf Hider, assassinated Dollfuss in July 1934. They were not strong enough to seize power, however, and the Dollfuss re- gime continued under the leadership of Kurt von Schuschnigg. Despite the failed Nazi coup d'etat, agitation for annexation, or Anschluss, of Austria by Germany continued. Schuschnigg resist- ed Hitler's demands for Anschluss for a time, but in March 1938 German troops occupied Austria. Because most Austrians felt lit- tle loyalty to their country, its seizure by Germany was widely sup- ported, even by many socialists. Austria was quickly and thoroughly absorbed by Nazi Germa- ny. The country's new rulers attempted to expunge all traces of an independent Austria by ruthless personnel and administrative practices. Even the name Austria was replaced by a new designa- tion — Ostmark. Austrians were drafted into the German army, the Wehrmacht, and when World War II began, they fought until Ger- many's unconditional surrender in May 1945. Austria's human and material losses from the war were great. Furthermore, the country was divided into four zones, each oc- cupied by one of the victorious Allies: the United States, Britain, xxiv France, and the Soviet Union. Under the watchful eyes of the oc- cupation powers, Austrians reestablished a government based on the constitution of 1920, as amended in 1929. This second attempt of Austrians to govern themselves in a parliamentary democracy proved eminently successful. In what came to be called the Second Republic, Austrians enjoyed a long period of social peace and prosperity. A key reason for the success of the Second Republic was the manifest failure of the First Republic (1918-38). Confronted with a defeat of this magnitude, Austrian politicians vowed not to repeat the mistakes of the earlier period. Leaders of opposing parties im- prisoned together in Nazi concentration camps discussed what was needed to rebuild their country and agreed to play down the ideo- logical differences that had made interwar politics so bitter. In ad- dition, Nazi barbarities gave them good reason to emphasize what distinguished Austria from Germany. External forces also contributed to the eventual success of the Second Republic. The occupation of Austria by foreign troops and the need to resist their demands encouraged a new Austrian uni- ty, as opposed to the lethal divisiveness of the First Republic. Fur- thermore, the gradual extinguishing of political freedom in Eastern Europe in the first years after World War II made the principles of parliamentary democracy more attractive than they had been in the interwar period. The Soviet Union's practices in its occu- pation zone were a daily affront to Austrians and discredited po- litical groups not committed to parliamentary democracy. In the interwar period, in contrast, no political party had fully supported this form of government, and several had been actively opposed to it. In addition to failing to establish a working democracy during the First Republic, Austrians also had failed to put in place a na- tion supported by most of its citizens. During the Second Republic — likewise born in defeat at the end of a world war — a stable, prosperous society was created that with time engendered in its members a sense of pride in their Austrian identity. This feel- ing of a national identity was new. As late as 1956, only 49 per- cent of Austrians believed that they constituted a nation, whereas 46 percent saw themselves as Germans. Several decades of success as a nation altered the views of most Austrians on this matter. An opinion poll in 1989, for example, found that 78 percent of Aus- trians agreed that they constituted a nation, and only 9 percent held that they did not. After World War I, Austria's economy floundered for a time, improved in the second half of the 1920s, then collapsed with the xxv onset of the Great Depression. In contrast to this failure, after World War II an initial period of hardship was followed by decades of economic growth, which has continued into the 1990s. In the first years after World War II, Austrians nationalized a large portion of their economy to protect it from foreign seizure, particularly by the Soviet Union. They also worked out mechan- isms to involve the main participants in the economy — agriculture, commerce, and labor — in determining democratically how the econ- omy was to be managed. During the 1950s and 1960s, further bargaining institutions were created, most notably the Parity Com- mission for Prices and Wages, that involved economic interest groups and the government in major economic decisions. The resulting system, the social partnership, is responsible for the ex- tremely low incidence of strikes in Austria and the sustained sta- bility crucial for economic growth. The economy fostered by the social partnership has grown stead- ily in the postwar period, often at growth rates above the Organi- sation for Economic Co-operation and Development (OECD — see Glossary) average. Between 1955 and 1990, the economy increased in size by two-and-one-half times. In step with the rest of Western Europe, the Austrian economy modernized quickly. Agriculture, still a significant part of the economy in the 1950s, by the early 1990s provided only about one-twentieth of the work force with employment and accounted for an even smaller share of the gross domestic product (GDP — see Glossary). In 1970 the industrial sec- tor and the services sector accounted for roughly equal shares of GDP; by the 1990s the latter had become twice the size of the former and provided jobs for more than half the work force. Although Austrian industry has a smaller place in the overall economy than it did earlier in the postwar period, it has become more specialized and produces high-quality goods that are com- petitive on the world market. Despite its small size, Austria is an active participant in the global economy, and foreign trade, two- thirds of it with the European Union (EU — see Glossary), accounts for two-fifths of GDP. A persistent trade deficit is largely offset by high earnings from tourism. Austria's place in the global econ- omy has made imperative its membership in international economic organizations, such as the European Free Trade Association (EFTA — see Glossary) and the European Economic Area (EEA — see Glossary). Austria is scheduled to become a member of the EU on January 1, 1995. The expanding economy has brought higher living standards for nearly all Austrians. Automobile ownership and travel abroad are commonplace, and an ever- widening range of state- supervised social xxvi benefits has made material want a thing of the past for ordinary Austrians. Sustained prosperity and a modernizing economy have permitted many Austrians to find better employment than did their parents. White-collar salaried employees now outnumber blue-collar workers. Much of the menial work is done by foreigners, who first began to arrive in significant numbers in the early 1960s and who at times have made up nearly 10 percent of the work force. The great increase in white-collar employment permitted a ten- fold increase in the number of Austrians enrolled at institutions of higher learning between the mid-1950s and the early 1990s. The upgrading of education at lower levels, such as specialized voca- tional training, is also impressive. As a result, many Austrians who themselves attended only elementary school have seen their chil- dren receive an education that results in well-paid skilled em- ployment. Social mobility has eroded the interwar division of Austria into Lager. The farming sector has dwindled into insignificance. The traditional blue-collar working class has diminished both in size and in cohesion as workers have become more middle class in their habits and expectations because of improvements in their hous- ing, working conditions, and general standard of living. Many of their children have entered the ever-expanding middle class, which is no longer closed to outsiders. Younger Austrians, growing up in a more prosperous and egalitarian society than their parents, not only earn their livelihood in new ways but also have different social and political attitudes than the older generation. In the decades after World War II, Austrian society has become more secularized. Regular church attendance has declined sharp- ly, although the number of Austrians who have officially withdrawn from the Roman Catholic Church in this overwhelmingly Roman Catholic country has increased only slightly. The church itself has changed, withdrawing from the active and polarizing role it played in the interwar period. It speaks out only on issues it regards as within its legitimate sphere of interest. One such issue has been abortion. In the early 1970s, the church waged an ultimately un- successful campaign against the legalization of abortion. The role of women also has changed in this new social environ- ment. The so-called three Ks of Kinder, Kirche, and Kiiche (children, church, and kitchen) no longer dominate women's lives to the ex- tent they did in the past. Marriage is no longer seen as the only socially acceptable goal of a woman's life. Families are smaller, and by the 1990s the birthrate was below that needed for the popu- lation to increase. Divorce is more frequent, as is cohabitation by unmarried couples. The number of illegitimate births also has risen, xxvn although most of these children are subsequently legitimized by marriage. Women now work outside the home in greater numbers than in the past. Although as of the first half of the 1990s women still earned less than men at all levels of employment, more women than ever before hold responsible positions. Some of the country's foremost politicians are women, and the number of seats held by women in the nation's lower house of parliament, the Nationalrat (National Council), increased from eleven in 1970 to thirty-nine in 1994. Laws have been passed to improve women's position in society. The Equal Treatment Law of 1979 mandates equal pay for equal work, and the Women's Omnibus Law of 1993 aims at increasing the employment of women in government agencies. The economic and social changes Austria underwent in the post- war era began to affect the country's political life only in the se- cond half of the 1980s. It was during this period that the dominance of political life by two large parties — a dominance that began im- mediately after World War II — began to be threatened by several smaller parties. Representing two of the country's three tradition- al social camps, the two parties are the Socialist Party of Austria, known since 1991 as the Social Democratic Party of Austria (Sozi- aldemokratische Partei Osterreichs — SPO), the successor to the So- cial Democratic Workers' Party, and the Austrian People's Party (Osterreichische Volkspartei — OVP), descended from the Chris- tian Social Party. The SPO and OVP have governed Austria since 1945, often together in coalition governments. The latest of these so-called grand coalitions was formed in November 1994. Until 1970 the OVP was generally the stronger of the two parties. In that year, however, the SPO was led to power by the able and extremely popular Bru- no Kreisky, who remained chancellor until 1983. In 1986 another effective leader, Franz Vranitzky, took over the SPO and through his personal popularity has been able keep the party in power, even though the party's share of the vote has declined steadily. However strong their political rivalry may be, both parties are committed to democracy, and they have adopted less ideological positions than did their predecessors in the interwar period. De- cades of governing together have reduced the ideological differ- ences between the two parties, and both support maintaining Austria's mixed economy and social welfare state. They have also been bound together by the elaborate patronage system of divid- ing between them the right to fill many positions in government agencies, in the extensive social welfare system, in the numerous bodies that make up the social partnership system, and in the large xxvin state-owned business enterprises. Because appointments to these positions often depend more on party membership than on qualifi- cations, there have been instances of corruption and incompetence. As an indication of the overall success of the SPO and OVP in governing Austria in the postwar era, only in 1990 did their joint share of the vote in a national election drop below 80 percent. In fact, in many national elections their joint share had been over 90 percent. Beginning in 1986, however, their support began to fall steadily. In the national election of October 1994, they received only 62.6 percent of the vote. The decline stems in part from the slow breakup of the Lager, which had loyal voting habits, and the emergence of a sizable pool of ' 'floating voters, ' ' no longer invari- ably tied to the SPO or to the OVP. The decline of the large parties also stems from voter dissatis- faction with the inefficiency and corruption of traditional political practices of governing the country and the emergence of new is- sues in a rapidly changing economy and society. The most serious challenger to the two main parties is a right-wing populist party formed in 1956, the Freedom Party of Austria (Freiheitliche Par- tei Osterreichs — FPO), descended from prewar German nationalist- liberal groups. The party had seemed doomed to extinction until a young politician, Jorg Haider, seized control of it in 1986 and through his dynamic leadership increased its share of the vote to 9.7 percent in that year's national election. The FPO nearly dou- bled its share in the national election of 1990 and won 22.5 per- cent of the vote in the national election of October 1994. This last victory occurred despite a split within the FPO in early 1 993 , when some of its members left to form a new party, The Liberal Forum (Das Liberale Forum). These members disagreed with Haider's position on foreigners in Austria and his departure from classic po- sitions of European liberalism. A superbly gifted politician, Haider has campaigned as a con- servative populist, speaking out against the SPO-OVP decades- long stewardship of the country's affairs. He has exploited the anger of many voters at the pervasive cronyism and corruption of the SPO-OVP coalition and promised to end its system of patronage. Despite his clearly expressed hostility to socialism and the role of government in general, he has been able to successfully court many blue-collar SPO voters worried by the challenges posed to their country's small economy by a united Europe. With what many regard as demagogy, he has won votes by addressing that portion of the electorate who are concerned about the foreign presence in Austria and who fear Uberfremdung, that is, Austria's submersion in xxix a flood of foreign immigrants fleeing the social and economic chaos of Eastern Europe. Traditional politics has also been challenged by the emergence of an environmentalist movement. Widespread economic security has freed young Austrians from immediate practical concerns and has allowed them to become concerned with longer-term issues such as protection of the environment. Galvanized by the construction of a large SPO-sponsored nuclear power plant in 1978, citizen groups focusing on the environment were formed; shortly there- after, several environmentalist parties were established. In 1986 environmentalists were first elected to the Nationalrat; they have increased their share of the vote in each national election since. In the national election of 1994, the largest environmentalist party, The Greens (Die Griinen), won thirteen seats. The European trend toward unification has also altered Austri- an politics. In the first half of the 1990s, Austria's possible mem- bership in the EU was likely the issue of greatest significance for the country's future. In 1989 Austria applied for admission to the European Community (EC — see Glossary), the predecessor of the EU. An interim step before admission was the January 1994 en- try into the EE A. After years of negotiations with EC officials, in which the central points were protection of the environment, for- eign ownership of real estate property, and farm subsidies, the SPO-OVP government called for a June 1994 referendum about EU membership. The referendum was hotly contested. Although 66.4 percent of the electorate voted in favor of EU membership, the outcome of the vote was uncertain until the end. In addition to the SPO-OVP coalition, The Liberal Forum also supported membership. The most eloquent spokesman for this position was the minister for foreign affairs, Alois Mock, who had conducted the difficult negotiations concerning the conditions under which Austria would join the EU. In the late 1980s, Mock had persuaded his party, the OVP, that it should advocate Austria's becoming part of a united Europe. The SPO gradually came to the same view, even though EU mem- bership would conflict with Austria's traditional neutrality. The EU has as a long-term goal not only economic unity but also a common foreign and security policy, which would by its nature preclude neutrality. Proponents of EU membership argued that it would bring economic benefits and contribute to the nation's security in a new and rapidly changing world. Opponents of EU membership included many Austrian intellec- tuals, environmentalists, and the FPO, which had reversed its previ- ously positive stance. Opponents argued that membership would xxx bring a loss of Austrian sovereignty and that bureaucrats in Brus- sels would come to exert a suffocating control over the country's affairs. They feared that Austria's national identity might gradu- ally be lost in a united Europe, given the country's small size. Haider justified his party's change of opinion by saying that it still desired European unity, but not one in which Austrian liberty was so restricted. The overwhelming support voters gave to EU membership was a win for the coalition, but support came from many sectors of so- ciety, not just from traditional SPO and OVP voters. In fact, some members of the SPO and OVP opposed their parties' position be- cause they feared the social and economic consequences of mem- bership. This drop in support can be seen by comparing the two-thirds majority the two parties received in the referendum with the three-quarters majority the coalition received in the 1990 na- tional election. The national election of October 9, 1994, was a resounding set- back for the coalition. Both parties suffered significant losses in this election, which had an 82 percent voter turnout. The SPO remained the largest party in the Nationalrat. However, its share of the vote fell from 42.8 percent in the 1990 election to 34.9 percent, and its number of seats in the 183 -member body fell from eighty to sixty-five. The OVP fared nearly as badly. Its share of the vote dropped from 32.1 percent in 1990 to 27.7 percent in 1994, and its share of seats fell from sixty to fifty-two. The FPO continued its upward trend by increasing its share of the vote, going from 16.6 percent in 1990 to 22.5 percent in 1994, and by winning forty- two seats, compared with thirty-three seats four years earlier. The largest of the environmentalist parties, The Greens, increased its share of the vote from 4.8 percent to 7.3 percent and the number of its seats from ten to thirteen. The Liberal Forum, in its first national election, won 6.0 percent of the vote and gained eleven seats. The election showed that the political trends that had been un- der way through the 1980s had continued. The SPO-OVP share of the vote continued to drop precipitously, amounting to only 62.6 percent in 1994. As a result of these losses, the SPO-OVP coali- tion government formed in late November 1994 with Vranitzky as chancellor will not have the two-thirds majority needed to pass some legislation. The election was a triumph for Haider, who throughout its course had determined the issues on which the election was fought: the alleged threat of foreign immigration to the welfare of ordinary Aus- trians; and the incompetence and corruption of the pervasive system xxxi of governmental, party, and economic interest organizations that the SPO and OVP coalition had devised and that supposedly was suffocating the country's social and economic life. Haider saw his victory as merely another step toward becoming chancellor in 1998. To reach this goal, he has begun transforming his party into a po- litical movement similar to that headed by Ross Perot in the Unit- ed States. Whether or not Haider achieves his goal, he is likely to remain one of Austria's foremost politicians because of his skill in raising issues that have become central concerns to voters fac- ing the challenges of the new Europe emerging after the end of the Cold War. The end of the Cold War and the breakup not only of the War- saw Pact but also of some of the countries that belonged to it have ended the decades of relative stability in Central Europe. In addi- tion, in the early 1990s Yugoslavia, Austria's neighbor to the south, also broke into a number of separate states, some of which were soon at war. Large numbers of refugees have fled to Austria and other Western countries, seeking temporary or permanent asylum. As a result of these events, Austria, once securely tucked away in one corner of Western Europe and sheltered from the East by the Iron Curtain, has come to occupy a more exposed and less secure position in Central Europe. In the postwar era, Austria has pursued a neutral and active for- eign policy. The State Treaty of 1955 ended the country's occu- pation by foreign troops and restored its sovereignty. As a condition for winning its independence, Austria pledged itself to permanent neutrality and promised never to join a military alliance or to al- low foreign troops to be stationed on its territory. Lying between the two military alliances of the Cold War, Austria became an in- termediary between the two blocs. Vienna became the home to in- ternational organizations and the site of important international meetings. An Austrian diplomat, Kurt Waldheim, was secretary general of the United Nations (1971-81), and Austrian military forces regularly participated in that organization's multinational peacekeeping missions around the world. In the post-Cold War environment, however, Austria's active neutrality is seen by many as no longer relevant. Hence, policy makers are searching for a security policy better adapted to Aus- tria's newly exposed position. Entry into the EU will reduce Aus- tria's foreign policy independence and its traditional neutrality. Austria is expected to apply for observer status in the Western European Union (WEU — see Glossary) after it joins the EU and is likely to eventually become a member of this security organi- zation. Austria's foreign policy makers contend that there is no xxxn conflict between being a member of the WEU and maintaining the constitutional pledge of permanent neutrality, stating that it is Austria's right to interpret its neutrality. Whatever new security agreements are entered into later in the 1990s, however, Austria's policy of permanent and active neutrality, at least as it has so far been practiced, is probably nearing an end. The likely extension of EU membership early in the next century to East European nations with free-market economies and parliamentary democracy will also reduce Austria's postwar role as an intermediary between East and West. As a result of the new Europe forming after the political and economic revolutions be- ginning in 1989, Austria is faced with abandoning the foreign poli- cies that have served it so well in the postwar era. However, Austria will meet this new international environment not as a small poor nation surrounded by more powerful neighbors, as it did twice in the twentieth century after defeats in world wars, but as a prosperous and stable society and an integral part of a united Europe. December 5, 1994 Eric Solsten xxxiii Chapter 1. Historical Setting Coat of arms of the province of Styria GERMANIC TRIBES WERE not the first peoples to occupy the eastern Alpine-Danubian region, but the history and culture of these tribes, especially the Bavarians and Swabians, are the foundation of Austria's modern identity. Austria thus shares in the broader history and culture of the Germanic peoples of Europe. The terri- tories that constitute modern Austria were, for most of their history, constituent parts of the German nation and were linked to one another only insofar as they were all feudal possessions of one of the leading dynasties in Europe, the Habsburgs. Surrounded by German, Hungarian, Slavic, Italian, and Turk- ish nations, the German lands of the Habsburgs became the core of their empire, reaching across German national and cultural borders. This multicultural empire was held together by the Habs- burgs' dynastic claims and by the cultural and religious values of the Roman Catholic Counter-Reformation that the Habsburgs cul- tivated to provide a unifying identity to the region. But this cultural- religious identity was ultimately unable to compete with the rising importance of nationalism in European politics, and the nineteenth century saw growing ethnic conflict within the Habsburg Empire. The German population of the Habsburg Empire directed its nationalist aspirations toward the German nation, over which the Habsburgs had long enjoyed titular leadership. Prussia's success- ful bid for power in Germany in the nineteenth century — culminat- ing in the formation in 1871 of a German empire under Prussian leadership that excluded the Habsburgs' German lands — was thus a severe political shock to the German population of the Habsburg Empire. When the Habsburg Empire collapsed in 1918 at the end of World War I, its territories that were dominated by non-German ethnic groups established their own independent nation-states. The German-speaking lands of the empire sought to become part of the new German republic, but European fears of an enlarged Ger- many forced them to form an independent Austrian state. The new country's economic weakness and lack of national consciousness contributed to political instability and polarization throughout the 1920s and 1930s and facilitated the annexation (Anschluss) of Aus- tria by Nazi Germany in 1938. As part of Germany, Austria came under Nazi totalitarian rule and suffered military defeat in World War II. To escape this Nazi German legacy, Austrians began to seek refuge in a national identity 3 Austria: A Country Study that emphasized their cultural and historical differences with Ger- mans even before the end of the war. Thus, the population wel- comed the 1945 decision of the victorious Allied powers to restore an independent Austria. The bitter experience of the Anschluss and World War II en- abled Austrians to overcome the extreme political polarization of the interwar years through a common commitment to parliamentary democracy and integration with the West. The close cooperation of the two major parties, the Socialist Party of Austria (Sozialistische Partei Osterreichs — SPO) and the Austrian People's Party (Os- terreichische Volkspartei — OVP), helped Austria frustrate Soviet efforts after World War II that might have seen the country's ab- sorption into the Soviet bloc or division into communist and non- communist halves. The signing of the State Treaty in 1955 ended Allied occupation of Austria and any immediate danger of com- munist dictatorship and/or partition. But the occupation era and the continuing Cold War shaped the country's identity and self- understanding as it positioned itself as a neutral country bridging East and West. This new Austrian cultural, political, and international identity laid the foundation for a stable democracy, a strong economy tied to the West, and neutrality between communist and democratic Europe. At the same time, however, it discouraged close exami- nation of the role played individually and collectively by Austri- ans in Nazi aggression and war crimes. Revelations about the wartime record of Kurt Waldheim during the presidential election in 1985 thus initiated a painful reassessment of Austria's Nazi past. Moreover, the end of the Cold War has undercut Austria's self- appointed mission as a bridge between East and West. A redefini- tion of Austrian nationalism and its international role thus seems likely in the 1990s. The Alpine-Danubian Region Before the Habsburg Dynasty The Celtic and Roman Eras Around 400 B.C., Celtic peoples from Western Europe settled in the eastern Alps. A Celtic state, Noricum, developed around the region's ironworks in the second century B.C. The Romans occupied Noricum without resistance in 9 B.C. and made the Danube River the effective northern frontier of their empire. North of the Danube, various German tribes were already ex- tending their territory. By the latter half of the second century A.D. , they were making devastating incursions into Roman territories. 4 Historical Setting Nevertheless, Roman arms and diplomacy maintained relative sta- bility until the late fourth century, when other Germanic tribes, including the Ostrogoths, Visigoths, and Vandals, were able to es- tablish settlements in Roman territory south of the Danube. The Roman province gradually became indefensible, and much of the Christian, Romanized population evacuated the region in 488. In 493 the Ostrogoths invaded Italy, seized control of what remained of the western half of the Roman Empire, and brought the Ro- man era in the eastern Alps to an end. The Early Medieval Era Various Germanic and Slavic tribes vied for control of the eastern Alpine-Danubian region following the withdrawal and collapse of Roman authority. Among the Germanic tribes, Alemanni (later known as Swabians) and Bavarians were the most notable. The Alemanni had arrived during the Roman era and by 500 were per- manently established in most of modern-day Switzerland and the Austrian province of Vorarlberg. The early history of the Bavarians is not clear, but by the mid-500s they were established alongside remnants of earlier, Romanized peoples in areas north and south of the present-day border between Austria and Germany. Both Swa- bians and Bavarians were subject to another Germanic tribe, the Franks, but effective Frankish control did not occur until the time of Emperor Charlemagne in the late 700s. Slavic peoples, including Slovenes, Croats, Czechs, and Slovaks, settled in the region as subject peoples of the Avars, a nomadic tribe, and gradually absorbed their nomadic overlords. During the Carolingian era (eighth and ninth centuries), the areas of Slavic settlement, like those of the Swabians and Bavarians, became sub- ject to the Franks. Under Frankish patronage, Irish monks, most notably Saint Columban and Saint Gall, pioneered the Christian evangelization of the region in the seventh and eighth centuries. Their work gave rise to important monasteries whose agricultural activities on the frontiers of the Carolingian Empire helped open the region's primeval forests to wider settiement. Eventually integrated into the feudal political structure, the abbots of these monasteries vied with bishops and secular lords for religious and political influence well into the modern era. Bishoprics were established in four major Bavarian towns in the 730s. Salzburg, the only one of these to lie within modern Austria, was raised to the status of an archbishopric in 798 and was given jurisdiction over the other bishoprics. Salz- burg became the center of the Christian evangelization efforts in 5 Austria: A Country Study the Slavic territories, which were instrumental in spreading the po- litical reach of the Carolingian Empire. The Holy Roman Empire and the Duchy of Austria The gradual eastward extension of the Carolingian Empire was stopped by the arrival of the Magyars — a Finno-Ugric people who form the ethnic core of the Hungarian nation — in the Danubian region in 862. Within fifty years, the Magyars had seized the Hun- garian Plain, conquered Moravia and the eastern Danubian marches of the Carolingian Empire, and raided deep into Frankish territory. A reorganization of the German portion of the Carolin- gian Empire in the first half of the tenth century enabled the Ger- mans to rally their forces and defeat a Magyar invasion force at the Battle of Lechfeld in 955. This new and essentially German empire became known as the Holy Roman Empire and eventual- ly regained much of the territory lost to the Magyars. Neverthe- less, the Magyars' continuing military strength and their conversion to Christianity during the reign of King Stephen (r. 997-1038) en- abled Hungary to become a legitimate member of Christian Eu- rope and check German expansion to the east. Under the Holy Roman Empire, the territories that constitute modern Austria were a complex feudal patchwork under the sway of numerous secular and ecclesiastical lords. Most of the territo- ries originally fell within the boundaries of the Duchy of Bavaria. Over the years, various territories were effectively detached from Bavaria, either becoming part of the newly established duchies of Carinthia (976) and Styria (1 180) or, like Salzburg and Tirol, falling under the jurisdiction of powerful bishops. In the final years of the reign of Emperor Otto the Great (r. 936-73), a small margravate roughly corresponding to the present-day province of Lower Aus- tria was formed within Bavaria. This margravate became known as Ostarrichi (literally, Eastern Realm), from which the modern name Austria (Osterreich) ultimately derives. The Margravate of Austria was detached from Bavaria and became a separate duchy in 1156. Between 976 and 1246, the Duchy of Austria was one of exten- sive feudal possessions of the Babenberg family. Through their ties of blood and marriage to two successive German imperial dynasties, the Babenbergs gradually acquired lands roughly corresponding to the modern provinces of Upper Austria, Lower Austria, Styr- ia, and Carinthia. When the Babenberg line died out in 1246, their lands passed to the ambitious king of Bohemia, Otakar II. As king of Bohemia, Otakar was one of the small circle of "elector-princes" who were entitled to participate in the election of the Holy Roman 6 Emperor Maximilian I, Holy Roman Emperor from 1493 to 1519, greatly expanded Habsburg territory. Courtesy Austrian National Tourist Office, New York Emperor. When Otakar failed to be elected emperor in 1273, he contested the election of the new emperor, Rudolf von Habsburg. The Bohemian king met his defeat and death in battle in 1278, and the former Babenberg lands passed to the Habsburgs, who added them to their already extensive lands in present-day Swit- zerland, southwestern Germany, and eastern France. Rise of the Habsburg Empire The Habsburg Dynasty in the Late Medieval Era Although the Duchy of Austria was just one of the duchies and lands that the Habsburgs eventually acquired in the eastern Alpine- Danubian region, the Habsburgs became known as the House of Austria after the Swiss peasantry ousted them from their original family seat in Habichtsburg in the Swiss canton of Aargau in 1386. The name Austria subsequently became an informal way to refer to all the lands possessed by the House of Austria, even though it also remained the proper, formal name of a specific region. Thus, through the legacy of common rule by the House of Austria, the lands that constitute the modern state of Austria indirectly adopted the name of one region of the country as the formal national name in the early twentieth century. Because the elector-princes of the Holy Roman Empire gener- ally preferred a weak, dependent emperor, the powerful Habsburg 7 Austria: A Country Study Dynasty only occasionally held the imperial title in the 150 years after Rudolf's death in 1291. After the election of Frederick III in 1452 (r. 1452-93), however, the dynasty came to enjoy such a dominant position among the German nobility that only one non- Habsburg was elected emperor in the remaining 354-year history of the Holy Roman Empire. The Habsburgs' near monopoly of the imperial title, however, did not make the Habsburg Empire and the Holy Roman Empire synonymous. The Habsburg Empire was a supernational collec- tion of territories united only through the accident of common rule by the Habsburgs, and many of the territories were not part of the Holy Roman Empire. In contrast, the Holy Roman Empire was a defined political and territorial entity that became identified with the German nation as the nation-state assumed greater im- portance in European politics. Although the succession of Holy Roman Emperors from the Habsburg line gave the House of Austria great prestige in Ger- many and Europe, the family's real power base was the lands in its possession, that is, the Habsburg Empire. This was because the Holy Roman Empire was a loosely organized feudal state in which the power of the emperor was counterbalanced by the rights and privileges of the empire's other princes, lords, and institutions, both secular and ecclesiastical. Habsburg power was significantly enhanced in 1453, when Em- peror Frederick III confirmed a set of rights and privileges, dubi- ously claimed by the Habsburgs, that paralleled those of the elector-princes, in whose ranks the family did not yet sit. In addi- tion, the lands the Habsburgs possessed in 1453 were made inherita- ble through both the male and the female line. Because feudal holdings usually reverted to the emperor to dispose of as he wished when the holder of the fief died, the right of inheritable succession measurably strengthened the Habsburgs. The lands they held in 1453 became known collectively as the Hereditary Lands, and — with the exception of territories possessed by the archbishops of Salzburg and Brixen — encompassed most of modern Austria and portions of Germany, France, Italy, Croatia, and Slovenia. Territorial Expansion, Division, and Consolidation The Habsburgs also increased their influence and power through strategic alliances ratified by marriages. Owing to premature deaths and/or childless marriages within the Burgundian and Spanish dy- nasties into which his grandfather, Maximilian I (r. 1493-1519), and his father had married, Emperor Charles V (r. 1519-56) in- herited not only the Hereditary Lands but also the Franche-Comte 8 Historical Setting and the Netherlands (both of which were French fiefs) and Spain and its empire in the Americas. Challenged on his western borders by France and on his eastern borders by the Turkish Ottoman Empire, Charles V divided his realm geographically in 1522 to achieve more effective rule. Re- taining the western half under his direct control, he entrusted the eastern half, the Hereditary Lands, to his brother, Ferdinand (r. 1522-64). Although Ferdinand did not become Holy Roman Em- peror until 1556 when Charles V abdicated, this territorial divi- sion effectively created two branches of the Habsburg Dynasty: the Spanish Habsburgs, descended through Charles V, and the Aus- trian Habsburgs, descended through Ferdinand (see fig. 2). In addition to the lands he received from his brother, Ferdinand also increased his territorial reach by marrying into the Jagiellon family, the royal family of Hungary and Bohemia. When his brother-in-law, King Louis, died fighting the Turks at the Battle of Mohacs in 1526, Ferdinand claimed the right of succession. Although the diets representing the nobility of Bohemia (and its dependencies of Moravia and Silesia) did not acknowledge Ferdi- nand's hereditary rights, they formally elected him king of Bohemia. As king of Bohemia, he also became an elector-prince of the Holy Roman Empire. In Hungary and in the subordinate Kingdom of Croatia-Slavonia-Dalmatia, however, Ferdinand faced the rival claim of a Hungarian nobleman and the reality of the Turkish con- quest of the country. He was able to assert authority only over the northern and western edges of the country, which became known as Royal Hungary. His Hungarian rival became a vassal of the Turks, ruling over Transylvania in eastern Hungary. The rest of Hungary became part of the Ottoman Empire in 1603. Although Ferdinand undertook various administrative reforms in order to centralize authority and increase his power, no meaning- ful integration of the Hereditary Lands and the two newly acquired kingdoms occurred. In contrast to the authority of kings of Western Europe, where feudal structures were already in decline, Ferdi- nand's authority continued to rest on the consent of the nobles as expressed in the local diets, which successfully resisted adminis- trative centralization. The Protestant Reformation in the Habsburg Lands From the beginning of the Protestant Reformation in the 1520s, Protestant doctrines were welcomed by the people living in the areas under Habsburg domination. By the middle of the sixteenth cen- tury, most inhabitants were Protestant. Lutherans predominated in German- speaking areas, except in Tirol, where the Anabaptists 9 Figure 2. Europe in the Sixteenth Century were influential. Nevertheless, the Roman Catholic Church retained the support of the Habsburg Dynasty and was able to maintain a strong presence throughout the area. Religious violence and serious persecution were rare after the 1520s, and an uneasy coexistence and external tolerance prevailed for most of the sixteenth century. Ferdinand pressed Rome for con- cessions that would bridge the positions of moderate reformers and Catholics, but at the Council of Trent (1545-63), the Catholic Church chose instead a vigorous restatement of Catholic doctrine combined with internal reforms. The council thus hardened lines of division between Catholicism and Protestantism and laid the foundation for the Counter-Reformation, which the Habsburgs would pursue aggressively in the 1600s. The Turkish Threat After the Turkish siege of Vienna in 1529, Ferdinand recognized 10 Historical Setting that defense of the Habsburg lands required that Hungary form a bulwark against the Turks. Although Turkey's ultimate objec- tive was the conquest of Europe, Western Europe did not see the Turks as a threat and was unwilling to aid Ferdinand in the defense of the continent's eastern borders. He thus signed a peace agree- ment with the Turks in 1562 that formalized the stalemated status quo in Hungary. The Counter-Reformation and the Thirty Years' War Division and Rebellion Ferdinand I died in 1564, and Habsburg territories in Central Europe were divided among his three sons, with the eldest, Max- imilian III.(r. 1564-76), becoming Holy Roman Emperor. Al- though Maximilian's sympathetic policies toward the Protestants contrasted with his brothers' efforts to reestablish Catholicism as the sole religion in their lands, military policy, not religious doc- trine, was to divide the dynasty in the final years of the sixteenth century and open the door to the religious wars of the seventeenth century. Maximilian's son, Rudolf II (r. 1576-1612), succeeded his father as both king of Hungary and Holy Roman Emperor. After the Turks reopened the war in Hungary in 1593, Rudolf was blamed for the rebellion among Protestant nobles in Royal Hungary caused by his brutal conduct of the war. Backed by junior members of the dynasty, Rudolfs younger brother, Matthias (r. 1612-19), con- fiscated Rudolfs lands, restored order, and, after Rudolfs death, became Holy Roman Emperor. But the religious and political con- cessions that the two brothers had made to the nobility to win their support in this dynastic feud created new dangers for the Habsburgs. The childless Matthias chose his cousin Ferdinand as his suc- cessor. To facilitate Ferdinand's eventual election as Holy Roman Emperor, Matthias secured his election as king of Bohemia in 1617. Before accepting Ferdinand as king, however, the Protestant no- bility of Bohemia had required this strong proponent of the Catholic Counter-Reformation to confirm the religious charter granted them by Rudolf II. A dispute over the charter in 1618 triggered a rebel- lion by the Protestant nobles. Hopes for an arbitrated settlement were dashed when Matthias died in March 1619, and other areas under Habsburg control rebelled against Habsburg rule. The Thirty Years' War, 1618-48 The anti-Habsburg rebellions reflected the rising tensions be- tween Catholics and Protestants in the early 1600s. Proponents of 11 Austria: A Country Study the Counter-Reformation, often operating under Habsburg pro- tection, were reaping the fruits of a generation of work: monastic life was reviving, Catholic intellectual life was regaining confidence, and prominent figures were returning to the Catholic Church. As a result, Protestants were increasingly on the defensive. The Ger- man princes split into two military camps based on religious affili- ation: the Evangelical Union and the Catholic League. In August 1619, a Bohemian diet elected as king the Protestant elector-prince of the Palatinate, Frederick V, and the conclave of elector-princes elected Ferdinand II (r. 1619-37) Holy Roman Em- peror. On November 8, 1620, a force combining troops from the Catholic League and the imperial army decisively defeated Freder- ick V's largely mercenary force at the Batde of White Mountain. Throughout the 1620s, the combined imperial and Catholic forces maintained the offensive in Germany, enabling Ferdinand to establish his authority in the Hereditary Lands, Bohemia, and Hungary. Equating Protestantism with disloyalty, Ferdinand imposed re- ligious restrictions throughout the Hereditary Lands. In 1627 he implemented a long-planned decree to make Bohemia a one- confession state: Protestants were given six months to convert or leave the country. In the face of a strong Hungarian nationalist movement headed by the Calvinist prince of Transylvania, how- ever, Ferdinand could maintain his hold on Royal Hungary only by confirming guarantees of religious freedom. Foreign intervention by Denmark, Sweden, and France kept Fer- dinand from bringing the war to a conclusion through military power and also frustrated his efforts in the mid- 1630s to reach a compromise with the Protestant German princes. The subsequent military campaigns of the Thirty Years' War, however, only mar- ginally affected those portions of the Habsburg territories that are part of modern Austria. The Peace of Westphalia The Thirty Years' War was finally ended in 1648 by the Peace of Westphalia. The treaty guaranteed the religious and political constitution of the Holy Roman Empire, giving the German princes the sovereign right to settle the religious question in their respec- tive territories. France also achieved its main war aim because the costly war and the concessions to the princes effectively stopped the Habsburgs from transforming the Holy Roman Empire into an absolutist state under their direction. Nonetheless, in their own lands, the Habsburgs enjoyed greater political and religious con- trol than before the war: they had gained loyal new followers from 12 Historical Setting among the nobles by redistributing estates confiscated from rebels, and they were free to enforce religious conformity, which they did based on the model applied earlier in Bohemia. The Baroque Era Political and Religious Consolidation under Leopold Reconstruction of the social, political, and economic infrastruc- ture destroyed by the Thirty Years' War began during the reign of Ferdinand III (r. 1637-57) and continued through the reign of his son, Leopold I (r. 1658-1705). Central to the restoration of the Habsburgs' social and political base was the reestablishment of the Roman Catholic Church. But the Habsburgs did not seek to make the church an independent force within society. They found no contradiction between personal piety and use of religion as a political tool and defended and advanced their sovereign rights over and against the institutional church. The Habsburg effort to establish religious conformity was based on the model already implemented in Bohemia. Closure of Prot- estant churches, expulsions, and Catholic appointments to vacated positions eliminated centers of Protestant power. Reform commis- sions made up of clergy and representatives of local diets appointed missionaries to Protestant areas. After a period of instruction, the populace was given a choice between conversion and emigration — an estimated 40,000 people emigrated between 1647 and 1652. The reestablishment of Catholic intellectual life and religious orders and monasteries was a key component of Habsburg Counter- Reformation policies. The Jesuits led this effort, and their influence was broadly disseminated throughout Central European society, owing to their excellent schools, near monopoly over higher edu- cation, and emphasis on lay organizations, which provided a chan- nel for popular devotional piety. Benedictine, Cistercian, and Augustinian monastic foundations were also revitalized through the careful management of their estates, and their schools rivaled those of the Jesuits. Through the court's patronage of the arts and religious orders and through public celebrations, both secular and religious, the dynasty transmitted a worldview based on the values of the Counter- Reformation. These values, rather than common governmental in- stitutions and laws, gave the Heriditary Lands a sense of unity and identity that compensated for the continued weakness of adminis- trative bodies at the center of Habsburg rule. 13 Austria: A Country Study The Turkish Wars and the Siege of Vienna In 1663 rivalries between the Ottomans and the Habsburgs in Transylvania triggered renewed fighting between the Ottoman Em- pire and the Habsburg Empire. The Turkish threat, which included a prolonged but unsuccessful siege of Vienna in 1683, prompted Poland, Venice, and Russia to join the Habsburg Empire in repel- ling the Turks. In 1686 Habsburg forces moved into central Hun- gary and captured Buda. By 1687 the Ottoman Empire had been eliminated as a power in central Hungary. In the late 1690s, com- mand of the imperial forces was entrusted to Prince Eugene of Sa- voy. Under his leadership, Habsburg forces won control of all but a small portion of Hungary by 1699. The War of the Spanish Succession In 1700 the death of Charles II of Spain ended the Spanish Habs- burg line. Spain's steady decline throughout the seventeenth century had already led to minor armed conflicts aimed at a realignment of power among European countries, and these rivalries blossomed into the War of the Spanish Succession (1701-14). Both Leopold I and King Louis XIV of France, Charles's two nearest relatives, hoped to establish a junior branch of his own dynasty in Spain. But neither was willing to rule out the possibility that a single heir might someday inherit the lands of both the principal line and its Spanish offshoot. The strong central government and political in- stitutions of France made the possible union of Spain and France a far greater threat to other European countries than the possible union of Spain and the Habsburg lands in Central Europe. Thus, when the dying Spanish king named as his heir Louis's son, Philip, England and a number of other European countries rallied to the Habsburg cause. Despite early victories by the Austro-English alliance, the allies were unable to install the Austrian Archduke Charles on the Spanish throne. As the war dragged on, the alliance began to unravel, es- pecially when, after the death of Leopold's elder son, Charles be- came Holy Roman Emperor in 1711. The actual unification of the Habsburg lines in Charles VI (r. 1711-40) posed a greater threat to other European powers than did the possible union of war- weakened France and Spain. Austria's allies made peace with France in 1713 and signed the Treaty of Utrecht. Because his former allies negotiated a treaty to protect their own interests, the settle- ment Charles received when he finally abandoned the war in 1714 was meager: the Spanish Netherlands (present-day Belgium) and various Italian territories. 14 Historical Setting The Pragmatic Sanction and the War of the Austrian Succession, 1740-48 Although the Habsburg Empire continued to expand in the east at Turkish expense, Charles VI recognized that defense of Aus- tria's position in Europe required greater economic and political centralization to foster the development of a stronger economic base. Because he lacked a male heir, however, the continued unity of the Habsburg Empire was jeopardized. In 1713 Charles promul- gated the Pragmatic Sanction to establish the legal basis for trans- mission of the Habsburg lands to his daughter Maria Theresa (r. 1740-80). The price extracted by local diets and rival European powers for approval of the Pragmatic Sanction, however, was aban- donment of many centralizing reforms. Nonetheless, Charles's concessions did not prevent the War of the Austrian Succession (1740-48) from breaking out on his death in 1740. Prussia occupied Bohemia's Silesian duchies that same year. Late in 1741, the elector-prince of Bavaria, Charles Albert, occupied Prague, the capital of Bohemia, with the aid of Saxon and French troops and was crowned king of Bohemia. This paved the way for his election as Holy Roman Emperor in 1742, thus breaking the Habsburgs' three-hundred-year hold on the imperial crown. The Austrians, however, retook Prague, and Maria Theresa was crowned queen of Bohemia in the spring of 1743. Aided by a Brit- ish diplomatic campaign, Austria also made important military gains in Central Europe. Thus, when Charles Albert unexpectedly died in January 1745, his son made peace with Austria and agreed to support the Habsburg candidate for emperor. This enabled Maria Theresa's husband, Franz (r. 1745-65), to be elected Holy Ro- man emperor in October 1745. In the west, the war with France and Spain gradually settled into a military stalemate, and negoti- ations finally led to the Peace of Aix-la-Chapelle in 1748. Although Maria Theresa emerged with most of her empire intact — owing largely to the early support she received from Hun- garian nobles — Austria was obliged to permanently cede Silesia, its most economically advanced territory, to Prussia. Recognizing that the costiy war with France had done more to promote British colonial interests in North America than its own interests in Cen- tral Europe, Austria abandoned its partnership with Britain in favor of closer ties with France. This reversal of alliances was sealed by the marriage of Maria Theresa's youngest daughter, Marie An- toinette, to the future Louis XVI of France. 15 Austria: A Country Study The Reforms of Maria Theresa and Joseph II Baroque Absolutism and Enlightened Despotism Although her husband was emperor, Maria Theresa ruled the Habsburg lands. However, when her son Joseph became Holy Ro- man Emperor after the death of her husband in 1765, she made her son coregent. Following Maria Theresa's death in 1780, Joseph II reigned in his own right until his death in 1790. The Counter- Reformation's political and religious goals had largely been accom- plished by the time Maria Theresa came to the throne, but main- taining Austria's great-power status urgentiy required broad internal reform and restructuring to strengthen the central authority of the monarchy and curtail the power of the nobility. Maria Theresa began administrative and economic reforms in 1749, drawing on mercantilist theory and examples provided by Prussian and French reforms. In addition, she undertook reforms in the social, legal, and religious spheres. During the coregency and after Maria Theresa's death, Joseph continued the reforms along the lines pursued by his mother. But mother and son had sharply different motivations. Maria Theresa was a pious Catholic empress working within the structure of a paternalistic, baroque absolutism and was unsympathetic to the Enlightenment. Joseph, in contrast, gave the reforms an ideological edge reflecting the utilitarian theories of the Enlightenment. Because his reforms were more ideologically driven and thus less flexible and pragmatic, they frequently were also less successful and disrupted the stability of the Habsburg Empire. Although the statist religious policy that evolved in this era be- came known as Josephism, Joseph's policy was largely an exten- sion of his mother's, whose piety did not exempt the church from reforms designed to strengthen state authority and power. Joseph's utilitarianism, however, contributed to two important divergences from Maria Theresa's policy: greater religious toleration and sup- pression of religious institutions and customs deemed contrary to utilitarian principles. The Edict of Tolerance, issued in 1781, grant- ed Protestants almost equal status with Catholics; other decrees lifted restrictions on Jews and opened up communities, trades, and educational opportunities previously barred to them. The utilitar- ian principles behind religious toleration, however, also inspired Joseph to dissolve Catholic monasteries that were dedicated solely to contemplative religious life and to suppress various traditional Jewish customs he viewed as detrimental to society and a hinder- ance to the Germanization of the Jewish population. 16 Maria Theresa (r. 1740-80) reformed and united Habsburg holdings. Courtesy Embassy of Austria, Washington The reforms created an administrative, fiscal, and judicial bureaucracy directly responsible to the monarch. As the seat of the new centralized institutions, Vienna grew from merely being the sovereign's place of residence to a true political and administra- tive capital. Hungary, however, was not included in these centraliz- ing administrative reforms. In appreciation for the support Austria had received from the Hungarian nobles during the War of the Austrian Succession, Maria Theresa never extended her reforms to that kingdom. The Strategic Impact of the Reform Era Although the reforms improved Austrian military preparedness, they fell short of their original goal of enabling Austria to defend its interests in Europe. Hopes of regaining Silesia and partition- ing Prussia were abandoned after only limited military success in the Austro-Prussian Seven Years' War (1756-63). Efforts to check Russian expansion yielded mixed results. Unable to prevent Rus- sian and Prussian ambitions against Poland, Austria reluctantly joined them in the First Partition of Poland in 1772 and gained the province of Galicia. Five years later, Austria intervened be- tween Russia and Turkey to prevent Russian gains at Turkish ex- pense and in the process acquired Bukovina, a territory adjacent to Galicia and Transylvania. Because the new territories were eco- nomically backward, their acquisition served mainly to shift the 17 Austria: A Country Study ethnic balance of the Habsburg Empire through the addition of a large Slavic population (Poles and Ruthenians), a sizable Jewish minority (which accounted for 60 percent of the empire's total Jew- ish population), and a lesser number of Romanians. The ideological rigidity with which Joseph II carried out his re- forms also weakened the Habsburg Dynasty by provoking social unrest and, in Hungary and Belgium, rebellion. When Joseph died in 1790, his brother, Leopold II (r. 1790-92), had to reverse many of the reforms and offer new concessions to restore order. To get Prussian support for the military action that reestablished Habs- burg authority in Belgium in 1790, Leopold foreswore further Aus- trian territorial gains at Turkish expense. He also confirmed Hungary's right not to be absorbed into a centralized empire, but to be ruled by him as king of Hungary according to its own ad- ministration and laws. In exchange, the Hungarian nobility ended their rebellion. The Habsburg Empire and the French Revolution The Napoleonic Wars What began as a retrenchment in Austria's reform program ground to a complete halt when the international crisis caused by the French Revolution engulfed Europe in a generation of war. Meeting in Potsdam in 1791, Leopold II and the king of Prussia jointly declared that the revolutionary situation in France was a common concern of all sovereigns. Although the declaration did not become the framework for European military intervention in France as its authors had hoped, it set Austria and the French Revo- lution on an ideological collision course. In April 1792, revolution- ary France declared war on Austria. The first war lasted for five years until Austria, abandoned by its allies, was forced to make peace on unfavorable terms. Austria renewed the war against France in 1799 and again in 1805 but was swiftly defeated both times. In the otherwise unfavorable settle- ment after the defeat in 1805, however, Austria did receive Salz- burg, a territory formerly ruled by an archbishop, in compensation for the loss of various Italian and German possessions. Because French domination of Germany raised the possibility that Napoleon Bonaparte or one of his subordinates could be elected Holy Roman Emperor, Leopold's son, Franz II (r. 1792-1835), took two steps to protect Habsburg interests. First, to guarantee his family's continued imperial status, he adopted a new, heredi- tary title, Emperor of Austria, in 1804, thus becoming Franz I of Austria. Second, to preclude completely the possibility of 18 Historical Setting Napoleon's election, in 1806 he renounced the title of Holy Roman Emperor and dissolved the Holy Roman Empire. In the final years of the decade, the German Habsburg area was swept with anti-French nationalist fervor. Erroneously believing that similar nationalist fervor throughout Germany would produce a victory, Austria declared war on France in April 1809. In the Tirol, then under Bavarian rule, the peasants, led by Andreas Hofer, rebelled and scored surprising victories before being sub- dued by Napoleon's forces. Elsewhere in Germany, however, na- tionalist feeling had little effect. Austria's defeat was swift, and significant territorial losses followed. In the wake of this defeat, Franz appointed a new foreign minister, Clemens von Metternich, who sought reconciliation with France. He accomplished this by arranging a marriage between Franz's daughter, Marie Louise, and Napoleon, who was eager for the prestige of marriage into one of the principal dynasties of Europe and the creation of an heir. The marriage took place in the spring of 1810 but yielded litde immediate return for Austria. In 1813 Napoleon's position began to weaken. His invasion of Russia had failed, and Britain was scoring victories in the Iberian Peninsula. Both sides of the conflict began bidding for Austria's support. In August of that year, Austria broke its alliance with France and declared war. Despite generous subsidies from Britain, the final campaigns against Napoleon in 1814 and 1815 strained Austria's financial and human resources. Thus, Austria emerged as a victor from the war but in a severely weakened state. The Congress of Vienna From September 1814 to June 1815, representatives of the Eu- ropean powers met in Vienna. Guided by Metternich, the Con- gress of Vienna redrew the map of Europe and laid the foundation for a long period of European peace. The Habsburg Empire emerged with boundaries both more extensive and compact than it had had for several centuries. Belgium and the Habsburg lands in southwest Germany were los't, but Austria regained all other possessions that it had held in 1 792 and virtually all of those it had obtained during the long years of war, including Salzburg (see fig. 3). The Holy Roman Empire was not resurrected but was replaced with a German Confederation composed of thirty-five sovereign princes and four free cities. Austria held the permanent presiden- cy of the confederation and probably had more real influence in Germany than it had had under the Holy Roman Empire. Austria also enjoyed the dominant position on the Italian peninsula, where it possessed the northern territories of Lombardy and Venetia. 19 Austria: A Country Study Figure 3. Austrian Empire, 1815 The wartime allies — Austria, Britain, Russia, and Prussia — concluded the Congress of Vienna by signing the Quadruple Alli- ance, which pledged them to uphold the peace settlement. In a secondary document, the European monarchs agreed to conduct their policies in accordance with the Christian principles of charity, peace, and love. This "Holy Alliance," proposed by the Russian tsar, Alexander I, was of little practical import, but it gave its name to the cooperative efforts of Austria, Russia, and Prussia to main- tain conservative governments in Europe. Although Austria emerged from the Congress of Vienna as one of the great powers in Europe, throughout the nineteenth century its status and territorial integrity depended on the support of at least one of the other great powers. As long as the allies were will- ing to cooperate in the "Congress System" to maintain the peace, order, and stability of Europe, Austrian interests were protected. But the other great powers, which were better able to defend their 20 Historical Setting interests by force, did not always share Austria's devotion to Met- ternich's creation. Austria in the Age of Metternich International Developments, 1815-48 Clemens von Metternich was initially successful in maintaining a European consensus favorable to Austrian interests. He used the example of liberal revolutions in Spain and Naples and revolution- ary activity in Germany to demonstrate the universal menace posed by liberalism and thus won Austria the support of Prussia and Rus- sia. Britain also supported Austria because the two countries had common interests favoring a strong Austrian presence in Germany, limited French influence in Italy, and the maintenance of the Ot- toman Empire to prevent Russian advances in the Balkans. The support from the other great powers dissipated, however, in the mid- and late 1820s. Russia became more assertive in the Balkans, and British policy increasingly reflected that nation's liberal popular opinion. But Metternich was able to regain Russian and Prussian support in the early 1830s, following another round of liberal uprisings in Europe. Even Britain returned to close cooper- ation with the other powers to block French interests in Egypt. Nevertheless, Metternich failed to respond effectively to Prussia's formation of a German customs union in 1834. The customs union excluded Austria and promoted the economic integration of the other German states, thus facilitating German political unifi- cation under Prussian leadership later in the century. Domestic Policies Despite Metternich 's high profile, it was the emperor's conser- vative outlook and hostility toward the values and ideas of the French Revolution that set the parameters for Austrian policy. This was especially true of domestic policy, which Franz I retained un- der his direct personal control until his death in 1835. The com- position of the state council that Franz selected to rule in the name of his mentally incompetent son Ferdinand I ensured the continu- ance of his policies until revolution shook the foundations of Habs- burg rule in 1848. Franz's aim was to provide his subjects with good laws and material well-being. To accomplish the first, he issued a new penal code in 1803 and a new civil code in 1811. He expected that the second — material well-being — would evolve naturally with the reestablishment of peace, and he considered additional measures un- necessary. Political and cultural life was kept under careful scrutiny, 21 Austria: A Country Study however, to prevent the spread of nationalism and liberalism. These two movements were a common threat to Franz's conservative re- gime because his political opponents looked to the establishment of a unified German nation-state incorporating Austria as a means for realizing the liberal reforms impossible in the frame- work of the Habsburg state. Political stagnation, however, did not prevent broader socioeco- nomic changes in the empire. By 1843 the population had risen to 37.5 million, an increase of 40 percent from 1792. The urban population was rising quickly, and Vienna counted nearly 400,000 inhabitants. Economically, a degree of stability was reached, and the massive wartime deficits gave way to almost balanced bud- gets. This was made possible by cutting state expenditures to a level near actual revenues, and not by instituting fiscal reforms to in- crease tax revenues. Austria's ability to protect its interests abroad or carry out domestic programs thus continued to be severely re- strained by lack of revenue. The Revolution of 1848 and Neoabsolutism Revolutionary Rise and Fall In 1848 liberal and nationalist ideologies sparked revolutions across Europe. In late February, the proclamation of the revolutionary Second Republic in France shook conservative Austria. Popular ex- pectations of war caused a financial panic in the Habsburg Empire that worked to the advantage of the revolutionaries. By early March, events throughout the empire were accelerating faster than the government could control them. As a symbol of conservative govern- ment, Metternich was an early casualty of the revolution. His resig- nation and flight in mid-March only led to greater demands. By mid- April the court had sanctioned sweeping liberal reforms passed by the Hungarian diet. In May the government was forced to an- nounce plans for a popularly elected constituent assembly for the Habsburg lands. This assembly, the first parliament in Austrian his- tory, opened in July 1848. As part of the German Confederation, the German- speaking Habsburg lands were also caught up in the revolutionary events in Germany. German nationalists and liberals convened an assem- bly in Frankfurt in May 1848 that suspended the diet of the German Confederation and took tentative steps toward German unification. However, the close association of nationalism and liberalism in Germany belied the growing conflict between these two ideolo- gies. Although ethnic Germans from Bohemia were participating in the Frankfurt assembly, Czech nationalists and liberals rejected 22 Clemens von Metternich (1773-1859) restored Habsburg power after the defeat of Napoleon. Courtesy Embassy of Austria, Washington Bohemian participation in the German nation being born in Frank- furt. They envisioned a reconstituted Habsburg Empire in which the Slavic nations of central and southern Europe would assume equality with the German and Hungarian components of the em- pire and avoid absorption by either Germany or Russia. The government gave concessions that appeared to endorse this plan, and the Czechs convened an Austro-Slavic congress in Prague in June as a counterpart to the Frankfurt assembly. As conservative political authority gave way before the revolu- tionary forces, two bold military commanders began to reassert control over the situation, often ignoring or contravening timid orders from the court. General Alfred Windischgratz routed the revolutionaries from Prague and Vienna and reestablished order by military force. South of the Alps, General Joseph Radetzky reestablished Austrian control of Lombardy-Venetia by August. Although only Hungary remained in the hands of the revolu- tionaries, the Austrian government began to reorganize in the fall of 1848. A team of ministers associated with constitutionalism was presented to the constituent assembly in November. The minister- president not only committed the government to popular liberties and constitutional institutions but also to the unity of the empire. To cap the reorganization, the mentally incompetent Ferdinand formally abdicated on December 2, 1848, and his eighteen-year- 23 Austria: A Country Study old nephew was crowned Emperor Franz Joseph I (r. 1848-1916). The young emperor faced three pressing tasks: establishing effec- tive political authority in the empire, crushing the rebellion in Hun- gary, and reasserting Austrian leadership in Germany. To accomplish the first, the government promulgated a secretly prepared constitution in March 1849. thus undercutting the con- stituent assembly. This constitution contained guarantees of in- dividual liberties and equality under the law. but its greatest significance lay in provisions that established a centralized govern- ment based on unitary political, legal, and economic institutions for the entire empire. The new constitution exacerbated the revolutionary situation in Hungary. The Hungarian diet deposed the Habsburg Dynasty and declared Hungarian independence. Although Austria could have eventually restored order on its own. the need to deal simultane- ously with events in Germany prompted Emperor Franz Joseph to ask for and get Russian military assistance, thus accomplishing his second objective. The rebellion was effectively, if brutally, ended by September 1849. Austria's decision to organize itself as a unitary state also set the terms for dealing with the German nationalists and liberals sit- ting in Frankfurt: Austria would enter a unified Germany with all of its territories, not merely the German and Bohemian portions. This contradicted an earlier decision of the assembly, so the as- sembly turned from the grossdeutsch (large German) model of a united Germany that included Austria to the kleindeutsch (small German) model that excluded Austria. The assembly offered a hereditary crown of a united Germany to the Prussian king. The conditions under which the offer was made, however, caused the Prussian king to decline in early April 1849. Combined with the withdrawal of the Austrian representatives, his rejection effectively ended the Frankfurt assembly. The German Confederation was restored, and Franz Joseph's tasks were completed. However. Austria and Prussia continued to jockey for influence and leadership in Germany. The Failure of Neoabsolutism Initially, the new Austrian government apparently intended to implement the constitutional political structures promised in March 1849. But on December 31. 1851. Franz Joseph formally revoked the constitution, leaving in place only those provisions that estab- lished the equality of citizens before the law and the emancipation of the peasants. Popular representation was eliminated from all government institutions. In order to solidify a political base sup- porting neoabsolutist rule, the government also eliminated the 24 Historical Setting Josephist religious regulations that had been the source of continuing conflict with the church. In 1855 the government signed a concor- dat with the Vatican that recognized the institutional church as an autonomous and active participant in public life. The agree- ment signaled a new era of cooperation between throne and altar. Neoabsolutism, with its aim of creating a unified, supranational state, however, ran counter to the prevailing European trend. The empire's peoples could not be isolated from the larger nationalist struggles of the German, Italian, and Slavic peoples. In Hungary active resistance to the Austrian government declined, but passive resistance grew. During the Crimean War (1853-56), the situa- tion in Hungary made Austria vulnerable to economic and politi- cal pressure from Britain and France, the allies of Turkey against Russia. Thus, when Russia asked for Austria's support, Austria initially sought to mediate the conflict but then joined the western allies against Russia. By failing to repay Russia for its help in Hun- gary in 1849, Austria lost critical Russian support for its position in Germany and Italy. France took advantage of the estrangement between Austria and Russia to set up a military confrontation between Austrian and Italian nationalist forces. This opened the door to French military intervention in support of the Italians in 1859. Because Franz Joseph was unwilling to make the concessions that were Prussia's price for assistance from the German Confederation and because he feared the French might stir up trouble in Hungary, Franz Joseph surrendered Lombardy in July 1859. These failures did not bode well for the anticipated conflict with Prussia over German unification, so the emperor began to aban- don absolutism and create a more viable political base. He ex- perimented with various arrangements designed to attract the support of the military, the Roman Catholic Church, German liber- als, Hungarians, Slavs, and Jews, who were assuming a strong presence in the economic and political life of the empire. Urgently needing to resolve the tensions with the Hungarians, the govern- ment opened secret negotiations with them in 1862. The outline of a dual monarchy was already taking shape by 1865, but negoti- ations were deadlocked on the eve of the war with Prussia. Loss of Leadership in Germany Through the early 1860s, Austria maintained hope of retaining leadership in Germany because the smaller states preferred weak Austrian leadership to Prussian domination. Nonetheless, by mid- 1864 Franz Joseph realized that war was inevitable if Austrian leadership were to be preserved. 25 Austria: A Country Study The immediate cause of the Seven Weeks' War between Aus- tria and Prussia in 1866 was Prussia's desire to annex the Duchy of Holstein. Austria and Prussia had together fought a brief war against Denmark in 1864 to secure the predominantly German duchies of Schleswig and Holstein for Germany. Pending final de- cision on their future, Prussia took control of Schleswig, and Aus- tria took control of Holstein. In April 1866, however, Prussia plotted with Italy to wage a two-front war against Austria that would en- able Prussia to gain Holstein and Italy to gain Venetia. Although Austria tried to keep Italy out of the war through a last-minute offer to surrender Venetia to it, Italy joined the war with Prussia. Austria won key victories over Italy but lost the decisive Battle of Koniggratz (Hradec Kralove in the present-day Czech Republic) to Prussia in July 1866 (see The Habsburg Military, ch. 5). Defeated, Austria agreed to the dissolution of the German Con- federation and accepted the formation of a Prussian-dominated North German Confederation, which became the basis of the Ger- man Empire in 1871 . The south German states — Bavaria, Baden, Wiirttemberg, and Hesse-Darmstadt — were accorded an "indepen- dent international existence" and, in theory, could have gravitat- ed toward Austria. Nevertheless, their military and commercial ties to Prussia militated against such an outcome. The province of Venetia, Austria's last Italian possession, was transferred to Italy. Austria-Hungary to the Early 1900s The Founding of the Dual Monarchy Defeat in the Seven Weeks' War demonstrated that Austria was no longer a great power. Looking to the future, Franz Joseph set three foreign policy objectives designed to restore Austrian leader- ship in Germany: regain great-power status; counter Prussian moves in southern Germany; and avoid going to war for the fore- seeable future. Because reconciliation with Hungary was a precon- dition for regaining great-power status, the new foreign minister, Friedrich Ferdinand von Beust, became a strong advocate of bring- ing the stalemated negotiations with the Hungarians to a success- ful conclusion. By the spring of 1867, a compromise had been reached and was enacted into law by the Hungarian Diet. The Compromise (Ausgleich) of 1867 divided the Habsburg Em- pire into two separate states with equal rights under a common rul- er, hence the term "Dual Monarchy." Officially, these states were Hungary and the "Kingdoms and Lands represented in the Parlia- ment," the latter being an awkward designation necessitated by the 26 Historical Setting lack of a historical name encompassing all non-Hungarian lands (see fig. 4). Unofficially, the western half was called either Austria or Cis-Leithania, after the Leitha River, which separated the two states. The officially accepted name of the Dual Monarchy was Austria-Hungary, also seen as the Austro-Hungarian Empire. The two national governments and their legislatures in Vienna and Budapest shared a common government consisting of a monarch with almost unlimited powers in the conduct of foreign and military affairs, a ministry of foreign affairs, a ministry of defense, and a finance ministry for diplomatic and military estab- lishments. In the absence of a shared parliament, discussion of the empire's common affairs was conducted by parallel meetings of delegates from the two national legislatures communicating with each other through written notes. A key topic of these meetings was the common commercial policy and customs union that had to be renegotiated every ten years. The Austrian parliament passed legislation implementing the Ausgleich in late 1867. This "December Constitution" was the product of German-speaking Liberals, who were able to dominate parliament because of a boycott by Czech delegates. The Decem- ber Constitution closely followed the constitution of 1849 and placed no significant restrictions on the emperor with regard to foreign and military affairs but did add a list of fundamental rights en- joyed by Austrians. The lower house of the Austrian parliament was elected through a highly restricted franchise (about 6 percent of the male population). Seats were apportioned both by province and by curiae, that is, four socioeconomic groups representing the great landowners, towns, chambers of commerce, and peasant com- munities. By building on the two dominant nationalities in the empire, German and Hungarian, dualism enabled Austria-Hungary to achieve relative financial and political stability. It did not, however, provide a framework for other nationalities, in particular the Slavs, to achieve equivalent political stature. Indeed, the Hungarian state used its power to preclude such an outcome. Hungary interpreted provisions in the Ausgleich as requiring Austria to retain its basic constitutional structure as a unitary state, so that any federalist ac- commodation with the Czechs would invalidate the Ausgleich and dissolve the Dual Monarchy. Final Defeat in Germany and Reconciliation with Prussia Because Russia was aligned with Prussia and because Britain had retreated into isolationism, Austria- Hungary turned to France as an ally in its bid to regain leadership in Germany. France wanted 27 Austria: A Country Study International boundary • Populated place Austria-Hungary boundary ITALY Country Boundary separating Austria and Hungary Dalmatia Historical region Note - Austria-Hungary governed Bosnia and 25 50 Kilometers Hercegovina from 1878-1918. 25 50 Miles Figure 4. Austria- Hungary, 1867-1918 gains in Germany at Prussia's expense and was receptive to an al- liance. Open cooperation with French expansionist ambitions, however, was inconsistent with Austria-Hungary's efforts to be the leader and defender of the German nation. The success of the alli- ance thus depended on France's position as the defender of the south German states against Prussia — which France failed to do. France declared war on Prussia and invaded German territory in July 1870. The south German states rallied to Prussia's side in the Franco-Prussian War, and Beust's patient effort to detach those states from Prussia lay in ruins. Austria watched helplessly as Prus- sia, the presumed underdog, quickly and soundly defeated France. In January 1871, Prussia founded the Second German Empire, uniting the German states without Austria. Unable to undo what Prussian military prowess had wrought in Germany, Austria-Hungary trimmed its sails accordingly. Count 28 Historical Setting Gyula Andrassy, a Hungarian, replaced Beust as foreign minister, and the empire's foreign policy began to reflect the anti-Russian sentiments of the Hungarians. Before 1871 ended, Austria-Hungary and Germany were working toward a united foreign policy. This diplomatic cooperation with Prussian-dominated Germa- ny contributed to the internal political stability of Austria- Hungary. Exclusion from a united Germany was a psychological shock for German Austrians because their claim to leadership in the Habs- burg Empire had rested in part on their leadership of the German nation. Cut off from Germany, they became just one of many na- tional groups in the Habsburg Empire and constituted only slight- ly more than one-third of Austria's population. Had Prussia remained hostile, Austria-Hungary's German population might have been the excuse for Prussian territorial ambitions similar to those harbored by the other nation-states that surrounded Austria- Hungary. Aligned with Austria-Hungary, however, Prussia dis- tanced itself from German nationalists in Austria-Hungary, and the annexation movement remained politically insignificant. But, because German Austrians no longer had their majority status guaranteed by participation in the larger German nation, many felt increasingly vulnerable and threatened. German Austrians thus became open to a nationalism based on ethnic fear and hostility that contrasted with the self-confident Liberal nationalism of earlier decades. The Eastern Question Having reconciled itself to exclusion from Germany and Italy, Austria- Hungary turned to the east, where declining Turkish power made the Balkans the focus of international rivalries. Foreign Minister Andrassy was opposed to any annexation of Balkan ter- ritories because that would have increased the empire's Slavic popu- lation. Ideally, he favored maintenance of Turkish authority in order to check the expansion of Russian influence. This option, however, was not viable. To prevent either Russia from replacing Turkey as the dominant power in the region or the already indepen- dent Balkan states (Serbia, Montenegro, Greece, and Romania) from dividing up the remaining Turkish territory, Austria-Hungary was forced to seek a partition of the Balkans with Russia. Because Germany was aligned with both Russia and Austria- Hungary, it acted as a moderating force on Russia to prevent war between its partners in the 1870s. So successful was Germany at limiting Russian gains after the costly Russo-Turkish War (1877-78), that Russia's relations with Germany cooled consider- ably. With Germany's support, Austria- Hungary acquired Bosnia 29 Austria: A Country Study and Hercegovina as part of the settlement to that war. Andrassy, however, did not directly annex Bosnia and Hercegovina but ob- tained the right of an Austro-Hungarian occupation, while Turkey retained sovereignty. With relations strained between Russia and Germany, Austria- Hungary exploited Germany's need to strengthen its position against France and obtained an anti-Russian alliance. Under the resulting Dual Alliance, Austria-Hungary and Germany pledged to help defend the other against an attack by Russia. In the event of war between Germany and France, however, Austria-Hungary promised nothing more than neutrality unless Russia were also in- volved. As favorable as the Dual Alliance appeared, it drew Austria- Hungary into Otto von Bismarck's web of alliances and diplomatic maneuverings. Austria-Hungary thus became party to conflicts with France and Britain, countries with which it had no directly con- flicting interests. The Triple Alliance signed by Germany, Italy, and Austria-Hungary in 1882, for example, mainly protected Italian and German interests against France and did nothing to resolve outstanding issues between Austria-Hungary and Italy. Great-power tensions in the Balkans eased in the 1890s, as Africa and the colonial territories in the Far East became the focus of com- petition among European powers. Although Austria-Hungary was not involved in this colonial competition, Russia was. Its interests in the Far East paved the way for an accommodation with Austria- Hungary to maintain the status quo in the Balkans. In 1903, however, Serbia, a Balkan country that European powers had as- signed to the Austro-Hungarian sphere of influence, launched an expansionistic program directed against Austria- Hungary. Without Russian support, however, Serbia's threat was not a major concern. Internal Developments in Austria The Czech boycott of the Austrian parliament enabled the Ger- man Austrian Liberals to dominate the government of Austria until the late 1870s. They used their position to block concessions to Czechs and Poles in the early days of the Dual Monarchy, and they further protected their interests in 1873 by altering the fran- chise law to increase the representation in parliament of their constituency — the urban, ethnically German population and as- similated Jews. The Liberals' legislative program focused on an- ticlerical measures, but conflict over foreign policy issues, not religious ones, caused the Liberals' fall from power in 1879. The Liberals opposed the annexation of Bosnia and Hercegovina — which was favored by the emperor — and claimed certain powers 30 Historical Setting in the conduct of foreign policy that Franz Joseph saw as an in- fringement on his sovereign authority. After the fall of the Liberals, a nonparty government known as the Iron Ring was formed under Eduard Taaffe. Intended to en- circle and limit the influence of the Liberals, the Iron Ring represented court interests and enjoyed broad support from cleri- cal parties, German Austrian conservatives, Poles, and Czech representatives, who had decided to end their boycott. Backed by this comfortable parliamentary majority, the executive branch was able to operate smoothly. Although the concessions given the Czechs in return for their support were linguistic and cultural rather than political, the concessions raised sensitive issues because the expanded use of the Czech language in Bohemian public life weighed heavily on the ethnic German minority. The major legislative initiative of the Taaffe government was the 1883 franchise reform. This measure broadened the socioeco- nomic base of the electorate and thus weakened the support of the Liberals while strengthening the conservatives. An even broader franchise reform was proposed in 1893 after the election of 1891, which had been conducted in an atmosphere of heightened ethnic tensions in Bohemia. The proposed reform would have given the vote to all male citizens over the age of twenty-five and thus dilut- ed still further the middle-class urban vote that the court associat- ed with fervid nationalism. The bill, however, was widely rejected by the conservative backers of the Iron Ring, and Taaffe resigned. Ethnic tensions, however, did not subside, even though a modi- fied version of the franchise legislation proposed in 1893 was ulti- mately enacted. With the parliament highly fragmented both nationally and politically, Minister-President Count Kasimir Badeni offered new concessions to the Czechs in 1897 to forge the majority coalition he needed to conduct customs and trade policy negotia- tions with the Hungarians. These concessions, which dealt with the use of the Czech language by the bureaucracy, inflamed Ger- man-speaking Austrians. Violent rioting on a near-revolutionary scale erupted not only in Bohemia but also in Vienna and Graz. The Badeni government fell. Because no effective majority could be assembled in the polarized parliament, the government increas- ingly used emergency provisions that allowed the emperor to enact laws when parliament was not in session. The political stalemate in parliament was a reflection of socioeco- nomic changes in the empire that were heightening tensions among social classes and nationalities. Although the economic and psy- chological impact of the economic crash of 1873 endured for some time, Austria experienced steady industrialization and urbanization 31 Austria: A Country Study in the late nineteenth century. By 1890 Austria stood midway be- tween the rural societies that bordered it on the east and south and the industrially advanced societies of Western Europe. The German-speaking middle class, including assimilated Jews, had been the first group to translate growing numerical and eco- nomic power into political leverage. Even after the 1879 fall of the Liberal government, which had represented this group's interests, the government had to consider the concerns of the German- speaking middle class in order to maintain political stability. In contrast to that of the middle class, the positions of the aristocracy and the Roman Catholic Church weakened. Individu- al aristocrats played prominent roles in the government, but the bureaucracy was assuming many functions once played by the aristocracy as a whole. For the church, the 1855 concordat between the empire and the Vatican had been a high-water mark for its formal role in political life. The Liberals' anticlerical legislation and abrogation of the concordat in 1870 curtailed the church's pub- lic presence and influence. Nonetheless, popular support for the church remained strong, and a new form of Catholic political par- ticipation was beginning to take shape based on a socially progres- sive platform endorsed by the 1891 papal encycylical Rerum Novarum. This largely urban movement coalesced into the Christian Social Party (Christlichsoziale Partei — CSP). Papal support was not suffi- cient to win the new party the approval of the conservative Austrian bishops, who continued to work through the older clerical-oriented parties. Initially, the CSP found strong support in Vienna and controlled the city administration at the turn of the century. Nonetheless, the party was unable to hold its desired base among industrial workers in the face of competition from the Social Democratic Workers' Party (Sozialdemokratische Arbeiterpartei — SDAP). Founded in 1889 at a unity conference of moderate and radical socialists, the SDAP adhered to a revisionist Marxist program. The SDAP be- came a political home for many Austrian Jews uncomfortable with the growing anti-Semitism of the German nationalist movement, the other major political current of the time., Rising ethnic tensions made it difficult for political parties to ig- nore the influence of German nationalism in the closing decades of the nineteenth century. The Liberal movement faded, largely because of its resistance to becoming a specifically German party, and dissatisfied Liberals were key figures in the formation of new nationalist movements and parties. Even though the CSP and SDAP were based on political ideologies that transcended nation- al identity, they too were obliged to make concessions in their 32 Historical Setting program to German nationalism. In the late 1890s, all German- oriented parties, with the exception of the SDAP and the Catholic People's Party, united in the German Front. The specific demands of the German Front were modest, but by calling for recognition of a special position for Germans in light of their historic role in the empire, German Austrians were on a collision course with other national groups. The Final Years of the Empire and World War I The Crisis over Bosnia and Hercegovina Around 1906 the Balkans again became the focus of great-power rivalry, as Russia renewed its interest in the Balkans and became Serbia's great-power patron. A crisis erupted in 1908, when Tur- key began to be reorganized as a constitutional state. Bosnia and Hercegovina, which was Turkish territory under Austro-Hungarian administration, was invited to send delegates to the new Turkish parliament. Austria- Hungary responded by formally annexing Bos- nia and Hercegovina in violation of various international agree- ments. It quelled Turkey's objections with financial compensation. But by alienating Russia and Italy, the annexation was a costly diplomatic victory for Austria-Hungary at a time when the mili- tary alliance system of Europe was moving against it. Britain had resolved colonial rivalries with both France and Russia, paving the way for the cooperation of the three countries in the Triple Entente. Following the crisis over Bosnia and Hercegovina, Russia en- couraged the independent Balkan states to form what was intended to be an anti- Austro-Hungarian coalition. But the new coalition, called the Balkan League, was more interested in partitioning the remaining Turkish territories in the Balkans, and it defeated Tur- key in the First Balkan War in 1912. The Balkan allies turned on each other in 1913 in a war over the division of the former Tur- kish territories. In this Second Balkan War, Serbia doubled both its territory and its population. World War I Austria-Hungary considered the newly enlarged and Russian- backed Serbia to be the principal threat to its security because Serbian military intelligence supported anti-Habsburg groups and activities in Bosnia and Hercegovina. Thus, when the heir to the Habsburg crown, Franz Ferdinand, and his wife were assassinated in Sarajevo by Bosnian nationalists on June 28, 1914, the presump- tion of Serbian complicity was strong. The idea of a preemptive 33 Austria: A Country Study war against Serbia was not new in Vienna, and, despite the weak pretext, Germany indicated a willingness to back its ally. On July 23, Austria-Hungary presented Serbia with an ultima- tum designed to be rejected. The key demands were that Serbia suppress anti-Habsburg activities, organizations, and propaganda and that Habsburg officials be permitted to join in the Serbian in- vestigation of the assassination. Serbia responded negatively but appeared conciliatory. Nonetheless, Austria-Hungary declared war on Serbia on July 28 without further consultations with Germany. Russia's decision to mobilize on July 30 escalated the war be- yond a regional conflict by bringing into play the system of Euro- pean alliances. Because German war strategy depended on avoiding a two-front war, Germany had to defeat France before Russia could fully mobilize. Thus, Germany responded to Russia's mobiliza- tion by immediately declaring war on France and Russia. On August 4, Britain declared war on Germany. On August 6, Austria- Hungary declared war on Russia. Finally, on August 12, France and Britain declared war on Austria-Hungary. Once the major powers were engaged, they sought to enlist the support of the smaller powers. Despite its partnership with Austria- Hungary and Germany in the Triple Alliance, Italy was not bound by that treaty to join the war, and it declared its neutrality. Ger- many pressed Austria-Hungary unsuccessfully to cede to Italy Aus- trian territories it desired, in order to win Italian support. Because the Triple Entente powers readily promised transfer of the territo- ries in the event of victory, Italy entered the war on their side in April 1915. Although German and Austro-Hungarian military victories in the east during the spring of 1915 overcame the military disasters that Austria-Hungary experienced early in the war, the empire's internal economic situation steadily grew more precarious. Austria- Hungary was not prepared for a long and costly war. The death of Emperor Franz Joseph on November 21, 1916, deprived Austria-Hungary of his symbolic unifying presence. His twenty-nine-year-old grandnephew, Karl (r. 1916-18), was unpre- pared for his role as emperor. But by this time, the future of the monarchy no longer depended on what the emperor did; rather, its fate hinged on the outcome of the war. Despite revolutionary Russia's withdrawal from the war, military success in the east could not counter events in the west. The United States had entered the war on the side of the Allies in April 1917, and with the failure of its military offensive in the spring of 1918, Germany was no longer capable of continuing the war. 34 Historical Setting The End of the Habsburg Empire and the Birth of the Austrian Republic The dismantling of the Habsburg Empire had not been an ob- jective of the Allies. Following the collapse of the tsarist govern- ment in Russia, however, the Allies increasingly portrayed the war as pitting freedom and democracy against oppression and autocracy. This strategy benefited the representatives of Czech, Slovak, Hun- garian, and other nationalist committees-in-exile, which skillfully played on the theme of self-determination expressed in United States president Woodrow Wilson's Fourteen Points. Austria- Hungary was unable to put forward a meaningful program of reform while still preserving the monarchy and so could not successfully resist the centrifugal forces pulling it apart. By mid- 1918 the Allies be- gan recognizing the national committees-in-exile and made plans for an independent Poland and Czechoslovakia. By October 1918, when the Austro- Hungarian government was seeking an armistice, control of the empire's constituent lands was passing to national committees, including one representing German Austrians. On October 21, German Austrian delegates to the Austrian parliament voted to establish an Austrian state incorporating all districts inhabited by ethnic Germans. At the end of the month, the delegates established a coalition provisional government. On November 3, imperial authorities signed an armistice, bringing Austro-Hungarian participation in World War I to an official end. On November 1 1 , Karl renounced any role in the new Austrian state, and the next day the provisional government issued a con- stitution for the German Austrian Republic. The First Republic Overview of the Political Camps Conditioned to view themselves as the ruling elite of a suprana- tional empire by virtue of what they regarded as their superior Ger- man culture, German Austrians (including assimilated Jews and Slavs) were the national group least prepared for a post-Habsburg state. The provisional government formed at the end of the war in- cluded representatives from three political groups: the Nationalists/ Liberals, the Christian Social Party (Christlichsoziale Partei — CSP), and the Social Democratic Workers' Party (Sozialdemokratische Arbeiterpartei — SDAP). These three groups dominated political life in interwar Austria and reflected the split of Austrian society into three camps {Lager): pan-German nationalists, Catholics and Christian Socials, and Marxists and Social Democrats, respectively. 35 Austria: A Country Study The parliamentary bloc represented by the Nationalists/Liberals was the smallest and most internally divided. Seventeen nation- alist groups were unified in the Greater German People's Party (Grossdeutsche Volkspartei), commonly called the Nationals, which described itself as a ' 'national-anti-Semitic, social libertarian party." The political heirs of the Liberals, the Nationals drew their sup- port from the urban middle class and retained liberalism's strong anticlerical views. Unification (Anschluss) with Germany was the Nationals' key objective, and they were cool, if not openly hostile, toward restoration of the Habsburg Dynasty to rule in Austria. In rural Austria, another party, the Agrarian League (Landbund), endorsed a nationalist program in conjunction with a corporatist and anti-Semitic platform. Radical nationalists were few in number, and some, Adolf Hitler, for example, had emigrated to Germany. The National Socialist German Workers' Party (National - Sozialistische Deutsche Arbeiterpartei — NSDAP, or Nazi Party) represented this segment of the nationalist movement but was nu- merically insignificant during the 1920s. The NSDAP originated in prewar Bohemia, where the German Workers' Party (Deutsche Arbeiterpartei) drew on a virulentiy racist movement headed by Georg von Schonerer to put together an anti- Semitic, anti-Slav nationalist program hostile toward capitalism, liberalism, Marxism, and clericalism. In 1918 the party changed its name to the National Socialist German Workers' Party. After World War I, the party split into two wings, one in Czechoslova- kia among Sudeten Germans (German Austrians of Bohemia, Moravia, and Silesia), and one in Austria. A similar party was founded in Germany and eventually came under the leadership of Hitler. Although the Austrian party leader favored parliamen- tary participation and internal party democracy in contrast to Hit- ler's antiparliamentarianism and emphasis on the "leadership principle," the Austrian and German parties united in 1926 but maintained separate national organizations. The original Christian Social Party (Christlichsoziale Partei — CSP) had merged with one of the rural-based clerical parties in 1907 and had become more conservative in outlook. Because the church had lost the political protection of the Habsburg Dynasty with the collapse of the monarchy in 1918, the church was increas- ingly reliant on the political power of the CSP to protect its in- terests. Nevertheless, the church hierarchy, which was distrustful of parliamentary democracy, remained cool toward the CSP. During the 1920s and early 1930s, the CSP was dominated by Ignaz Seipel, a priest and theologian who had served in the last im- perial ministry. The party was well disposed toward the Habsburg 36 Vienna's Karlsplatz art nouveau subway stop with baroque Karlskirche in the background Courtesy Austrian National Tourist Office, New York Dynasty and inclined toward its restoration under a conservative, constitutional monarchy. The CSP gave only conditional support for unification with Germany and emphasized Austria's distinct mission as a Christian German nation. In light of public opinion favoring unification, however, the party was circumspect in voic- ing its doubts. The CSP inherited an anti-Semitic strain from its association with the prewar nationalist movement. In addition, the close identification of Jews with both liberalism and socialism, which were the ideological foes of the CSP, made anti-Semitism an easy way to cultivate a political base. The Social Democratic Workers' Party (Sozialdemokratische Arbeiterpartei — SDAP) endorsed a revisionist Marxist program. Although it spoke of the dictatorship of the proletariat, it sought to gain power through the ballot box, not through revolution. Karl Renner, who headed the provisional government, was the chief 37 Austria: A Country Study spokesman for this revisionist program after the war, but leader- ship of the party was held by Otto Bauer, who vocally supported a more radical, left-wing position. Bauer's rhetoric helped the party outflank the Communist Party of Austria (Kommunistische Partei Osterreichs — KPO). But because CSP leader Seipel was given to similarly strong rhetoric, the two contributed to the polarization of Austrian society. The Social Democrats (members of the SDAP), were strong supporters of unification with Germany, their fervor declining only with the rise of the Nazi regime in the early 1930s. The Foundation of the First Republic Although the SDAP was the smallest of the three parliamentary blocs, it received a preeminent role in the postwar provisional government because it was perceived as best able to maintain public order in the face of the revolutionary situation created by economic collapse and military defeat. With Bauer's Marxist rhetoric and the party's strong ties to organized labor, the SDAP was able to outmaneuver the KPO for control and direction of workers' and soldiers' councils that sprang up in imitation of the revolutionary government in Russia. The SDAP suppressed the old imperial army and founded a new military force, the Volkswehr (People's De- fense), under SDAP control, to contain revolutionary agitation and guard against bourgeois counterrevolution. When parliamentary elections were held in February 1919, the SDAP won 40.8 percent of the vote, compared with 35.9 percent for the CSP and 20.8 percent for the Nationals. As a result, the Nationals withdrew from the coalition and left a SDAP-CSP government headed by Renner to negotiate a settlement to the war and write a constitution. At the peace talks in the Paris suburb of St. Germain, however, the Allies allowed no meaningful negoti- ations because Austria-Hungary had surrendered uncondition- ally. The Allies had decided that Austria was a successor state to Austria-Hungary, so the treaty contained a war-guilt and war- reparations clause and limitations on the size of Austria's military. Although the provisional government had declared the Austrian state to be a constituent state of the German republic, the treaty barred Austria from joining Germany without the consent of the League of Nations and compelled the new state to call itself the Republic of Austria rather than the German Austrian Republic. After Austria's parliament approved these unexpectedly harsh terms, the Treaty of St. Germain was signed on September 10, 1919. In setting the territorial boundaries of the Austrian state, some- times referred to as the First Republic, the Allies were faced with 38 Historical Setting the basic problem of carving a nation-state out of an empire in which ethnic groups did not live within compact and distinct boundaries. Austria received the contiguous German or German-dominated territories of Upper Austria, Lower Austria, Styria, Carinthia, Tirol (north of the Brenner Pass), Salzburg, and Vorarlberg, as well as a slice of western Hungary that became the province of Burgen- land. Under the empire, however, no specifically "Austrian" iden- tity or nationalism had ever developed among these provinces. Thus, despite a common language and historical ties through the Habsburg Dynasty, pressure from the Allies was necessary to keep even these contiguous areas together. Although geographically contiguous and ethnically German, South Tirol was transferred to Italy as promised by the Allies when Italy joined the war. The Sudeten Germans were not geographi- cally contiguous and could not be included in the new Austrian state. As a result, the Sudeten Germans were incorporated in the new Czechoslovakia. Austria's population numbered 6.5 million, as against Czechoslovakia's 11.8 million, of whom 3.1 million were ethnic Germans. The constitution of 1920 established a bicameral parliament, with a lower house, the Nationalrat (National Council) elected directly by universal adult suffrage, and an upper house, the Bundesrat (Federal Council) elected indirectly by the provincial assemblies (see Government Institutions, ch. 4). In accordance with the SDAP desire for a centralized state, real political power was concentrat- ed in the Nationalrat. Significantly, however, none of the three major parties was truly committed to the state and institutions es- tablished by the constitution. The SDAP goal was an Austria united with a socialist Germany, and the party's inflammatory Marxist rhetoric caused the other parties to fear that the SDAP could not be trusted to maintain democratic institutions if it ever achieved a parliamentary majority. Although the CSP under Seipel came closest to accepting the idea of an independent Austria, it preferred a monarchy over a republic. Seipel himself voiced increasingly an- tidemocratic sentiments as the decade advanced. The Nationals were fundamentally opposed to the existence of an independent Austrian state and desired unification with Germany. Political Life of the 1920s and Early 1930s With traditional sources of food and coal located across new na- tional borders, Austria suffered extreme economic dislocation, and the country's economic viability was in doubt. Moreover, having settled the immediate questions of the peace treaty and constitu- tion, the SDAP and CSP found it increasingly difficult to cooperate. 39 Austria: A Country Study Unfortunately, the October 1920 parliamentary elections did not provide the basis for a stable government. The CSP increased its share of the vote to 41.8 percent, while the SDAP declined to 36.0 percent and the Nationals to 17.2 percent. Seipel tried to form an antisocialist coalition with the Nationals, but that party was not yet prepared to set aside its own ideological differences with the CSP. Weak, neutral governments guided the country for the next two years. In 1922 Seipel assumed the office of chancellor (prime minister). By adroitly manipulating the European political situation and ac- cepting renewed prohibitions on union with Germany, he managed to obtain foreign loans to launch an economic stabilization plan. Although the plan stabilized the currency and set state finances on a sound course, it provided no solution to the underlying eco- nomic problems and dislocation, and it extracted a high social cost by cutting government social programs and raising taxes. Otto Bauer, leader of the SDAP, kept the party in self-imposed isolation after the collapse of the initial SDAP-CSP coalition in the belief that the natural role for a socialist party in a bourgeois democracy was opposition. Thus, Seipel remained the key public figure in Austrian national politics throughout the 1920s, even though he did not continuously serve as chancellor. Nevertheless, the CSP was not able to win an outright majority in the National- rat, and the SDAP registered steady gains among voters, polling 41 percent of the vote in 1927 against 55 percent of the CSP- National coalition. Vienna, which was given the status of a province under the 1920 constitution, was the SDAP stronghold. Vienna's city government of Social Democrats purposely sought to make health and housing programs and socialist-inspired "workers 'cul- ture "of "Red Vienna" a model for the rest of Austria. Although the CSP had secured the suppression of the SDAP- controlled Volkswehr in 1922 when a more traditional army was established, the SDAP responded by forming the Republikanischer Schutzbund (Republican Defense League). Well armed and well trained, it numbered some 80,000 members by the early 1930s. Of even greater political significance, however, were the provincial- based homeland militias, variously called the Heimwehr (Home Guard) and the Heimatschutz (Homeland Defense). Independently organized, these militias initially lacked any overarching political ideology except anti- Marxism. Until 1927 they were not an effec- tive political force and were viewed by many, including Seipel, as a military reserve supplementing inadequate military and police forces. In the late 1920s, however, the Heimwehr gained greater ideological coherence from contact with Italian fascism. But with 40 Historical Setting the exception of the Styrian branch, the Heimwehr was unable to bridge differences with Austrian Nazis. For this reason, the Heim- wehr leader, Prince Ernst Riidiger von Starhemberg, founded a Heimwehr political wing, the Heimatbloc (Homeland Bloc), in 1930. In the parliamentary election of 1930, the CSP experienced a severe setback, winning only sixty-six seats to the SDAP's seventy- two. The Heimatbloc picked up the seven seats lost by the CSP. Although the CSP-National coalition had broken down in the late 1920s, a new government was formed that combined the CSP with the Nationals and the peasant-based Landbund. Eager for a politi- cal success to bolster its popular support, the government began negotiations with Germany for a customs union in March 1931. When France learned of the negotiations, however, it immediate- ly denounced the proposal as a violation of the international ban on Austrian-German unification. Under severe diplomatic pres- sure, Austria and Germany were forced to drop their plans, but not before France's economic retaliation had led to the collapse of Austria's largest bank, the Creditanstalt, in June 1931. In the wake of this foreign policy and economic disaster, Seipel sought a new coalition between the CSP and the SDAP but was rebuffed. With no other alternative, Seipel resurrected the CSP- National coalition. The growing political strength of the Nazis in Germany and the worsening economic conditions marked by the rise in unemployment from about 280,000 in 1929 to nearly 600,000 in 1933, however, were effecting a political realignment in Aus- tria. In the spring of 1932, the Austrian branch of the Nazi Party registered important gains in local elections. Although the CSP lost important segments of its constituency to the Nazis, the parties in the nationalist camp suffered greater defections, especially after Nazi triumphs in Germany in early 1933. Austrian elections were in- creasingly three-way contests among the CSP, the SDAP, and the Nazi Party. The End of Constitutional Rule In May 1932, a new cabinet was formed under the leadership of Engelbert Dollfuss, a CSP member. Dollfuss's coalition, com- posed of the CSP, the Landbund, and the Heimatbloc, had a one- vote majority. Both the SDAP and the Nazi Party pressed for new elections, but Dollfuss refused, fearing defeat. Instead, he sought support from fascist Italy and the Heimwehr and increasingly re- lied on authoritarian measures to maintain his government. In early March 1933, parliamentary maneuvering by the SDAP, which was trying to block government action against a pro-Nazi 41 Austria: A Country Study labor union, created a procedural crisis in the Nationalrat. Urged on by the Italian dictator, Benito Massolini, Dollfuss exploited the confusion in the Nationalrat to end parliamentary government and began governing on the basis of a 1917 emergency law. Dollfuss outlawed the Nazi Party, the politically insignificant KPO, and the Republikanischer Schutzbund. All, however, continued to ex- ist underground. Seeking a firmer political footing than that offered by Italy and the coercive power of the police, military, and Heimwehr, Doll- fuss formed the Fatherland Front (Vaterlandische Front) in May 1933. The front was intended to displace the existing political par- ties and rally broad public support for Dollfuss 's vision of a specif- ically Austrian nationalism closely tied to the country's Catholic identity. Dollfuss rejected union with Germany, preferring instead to see Austria resume its historical role as the Central European bulwark of Christian German culture against Nazism and com- munism. In September 1933, Dollfuss announced plans to organize Austria constitutionally as a Catholic, German, corporatist state. The opportunity to put the corporatist constitution in place came after a failed socialist uprising in February 1934 triggered by a police search for Schutzbund weapons in Linz. An unsuccessful general strike followed, along with artillery attacks by the army on a Vienna housing project. Within four days, the socialist rebellion was crushed. Both the SDAP and its affiliated trade unions were banned, and key leaders were arrested or fled the country. Dollfuss 's con- stitution was promulgated in May 1934, and the Fatherland Front became the only legal political organization. Austrian society, however, remained divided into three camps: the nationalist bloc that was associated with the Heimwehr and the bloc represented by the CSP struggled for control of the Fatherland Front; the so- cialist bloc fell back on passive resistance; and the nationalist bloc dominated by the Nazis boldly conspired against the state with sup- port from Germany. Although a variety of political labels have been applied to the Dollfuss regime, it eludes simple classification. Its ideology harked back to early religious and romantic political critiques of liberal democracy and socialism. The regime incorporated many elements of European fascism, but it lacked two features widely viewed as essential to fascism: adherence to the "leadership principle," and a mass political base. In any event, the complex corporatist struc- tures of the 1934 constitution, in which citizens participated in so- ciety on the basis of occupation and not as individuals, were never fully implemented. And the regime's relations with the Roman Catholic Church were never as straightforward as the regime's 42 Historical Setting ideology suggested. Although the incorporation of a new concor- dat with the Vatican in the 1934 constitution bespoke harmony between church and state, in practice the concordat became the bulwark on which the church claimed its autonomous rights. Long- standing rivalries between church and state actually intensified as state-affiliated organizations intruded on what the church viewed as its interests in youth, family, and educational policies and or- ganizations. Growing German Pressure on Austria In June 1934, Hitler and Mussolini had their first meeting. Mus- solini defended his support of Dollfuss, while Hitler denied any intent to annex Austria but made clear his desire to see Austria in Germany's sphere of influence. Austrian Nazis, however, were embarked on a more radical course. They conspired to seize top government officials and force the appointment of a Nazi-dominated government. The Dollfuss government learned of these plans before the putsch began on July 25 but did not make adequate preparations. Although the army and the Heimwehr remained loyal and the coup failed, Dollfuss was killed. Strong international indignation over the putsch forced Hitler to rein in the Austrian Nazis, but Hitler's goal re- mained the eventual annexation (Anschluss) of Austria. Dollfuss was succeeded as chancellor by Kurt von Schuschnigg, another of Seipel's CSP proteges. Schuschnigg' s political survival directly depended on Italian support for an independent Austria, but by 1935 Mussolini was already moving toward accommoda- tion with Hitler and began to advise Schuschnigg to do the same. Schuschnigg was in fact prepared to make concessions to Germa- ny, if Hitler in turn would make a clear statement recognizing Aus- trian independence. Schuschnigg, however, did not understand the degree to which even moderate nationalists, whose support he needed, were already operating as fronts for Hitler and the Nazis. Thus, in the agree- ment signed with Germany on July 11, 1936, Hitler gave Austria essentially worthless pledges of Austrian independence and sovereignty, while Schuschnigg agreed to bring into his govern- ment members of the "National Opposition," who, unbeknownst to him, were taking their orders from Berlin. The 1936 agreement furthered Germany's desire to isolate Aus- tria diplomatically and encouraged other European countries to view Austrian-German relations as a purely internal affair of the German people. Bereft of external support and in no position to resist German pressure, Schuschnigg agreed to meet Hitler in 43 Austria: A Country Study Berchtesgaden on February 12, 1938. Hitler used the meeting to intimidate the Austrians with an implicit threat of military inva- sion, and Schuschnigg accepted a list of demands designed to strengthen the political position of the Austrian Nazis. Although the list did not include the legalization of Austria's Nazi Party, the Nazis and their sympathizers began to come into the open. On his return to Vienna, Schuschnigg began secret plans for one last desperate bid to preserve Austrian sovereignty: a plebiscite designed to secure a yes vote "for a free and German, indepen- dent and social, for a Christian and united Austria, for peace and work and equality of all who declare themselves for Nation and Fatherland." Representatives of the SDAP agreed to call a plebi- scite in exchange for various concessions. Hitler recognized that the plebiscite would be a new obstacle to Anschluss and a symbolic defeat for Nazi Germany, so he quickly moved against it. The German army began preparing for an in- vasion on March 10, and Nazi sympathizers in the Austrian cabi- net demanded that the plebiscite be postponed. Schuschnigg agreed to cancel it altogether and then acceded to demands for his resig- nation. Nonetheless, on March 12, Hitler sent the German army into Austria. The Anschluss and World War II Absorption of Austria into the Third Reich Most Austrian proponents of the Anschluss had foreseen a gradual coordination and merger of the two German states that would preserve some semblance of Austrian identity. But, influenced by the tumultuous welcome he received on his arrival, Hitler made an impromptu decision for quick and total absorption of Austria into the Third Reich. The Anschluss violated various international agreements, but the European powers offered only perfunctory opposition. Italy had acquiesced to the invasion beforehand, and in return Hitler later agreed to allow Italy to retain the South Tirol despite his aggres- sive policies elsewhere to bring all German populations into the Third Reich. Britain was following a policy of appeasement in 1938 and was unwilling to risk war over Austria's independence, while France, traditionally the strongest foe of German unification, was incapable of unilateral military action. To provide a legal facade for the Anschluss, Hitler arranged a plebiscite for April 10, 1938. The Nazis portrayed the plebiscite as a vote on pan-Germanrsm and claimed a 99.7 percent vote in favor of the Anschluss. Although the outcome was undoubtedly 44 Historical Setting influenced by Nazi intimidation, the Anschluss enjoyed broad popu- lar support. Nevertheless, the positive vote reflected the Austri- ans' desire for change far more than it did widespread support for Hitler and Nazism. Unification offered a way out of the political turmoil of the First Republic, and ties with the larger German econ- omy promised economic revitalization. Many Austrians probably also harbored unrealistic notions of Austria's position within the Third Reich, expecting an arrangement similar to the Dual Monar- chy in which Austria and Germany would be equal partners. And the full dimensions of Nazi barbarism were not yet apparent. Un- derlying these factors, however, was the widespread appeal of pan- Germanism that cut across political lines. Austrians had traditionally thought of themselves as Germans, and the Austrian nationalism cultivated by Dollfuss and Schuschnigg had not taken root. Although the SDAP had moderated its long-standing support for unification when Hitler came to power in Germany, Karl Renner urged a yes vote in the Nazi-organized plebiscite. Once unifica- tion was a fact, other Socialist leaders felt that the Nazi regime was not sufficient reason to reject the fulfillment of what they viewed as a progressive goal of German nationalism. Hitler moved quickly to suppress what little independent iden- tity and national unity Austria had. The name Austria was banned, provinces were freed of central administration from Vienna, and provincial loyalty and identification were cultivated. In addition, Austrian Nazis and Nazi sympathizers who might have become effective national leaders were transferred to relatively unimpor- tant jobs in the administration of the Third Reich or, after World War II began, were sent to administer the occupied territories. Thus, a disproportionate number of Austrians came to be in charge of the bureaucracy overseeing the implementation of the Nazis' extermination of the Jews and other peoples and groups deemed undesirable. Nazi Economic and Social Policies Between 1938 and mid- 1940, the Nazi administration in Aus- tria focused on stimulating the economy and relieving social dis- tress in order to win popular support, woo the working class away from socialism, and enable Austria to contribute to the German war machine. By early 1939, the Austrian economy was recover- ing, and unemployment was falling rapidly. Policies designed to speed economic efficiency and integration with Germany led to the rise of large firms and to the relocation of industry from the east to the Austria-Germany border in the west. Although these changes brought much of the Austrian economy 45 Austria: A Country Study under the control of the Third Reich, the economy was modern- ized and diversified. Thus, in spite of the wartime damage done to the Austrian economy and economic infrastructure, the An- schluss years helped overcome the belief that Austria was econom- ically inviable and laid the foundation for the mixed economy of the postwar years. These economic advances, however, came hand-in-hand with the Nazis' political repression and barbaric racial policies, of which the Jews were the principal victims. Unification with Nazi Ger- many legitimized the full venting of Austria's anti-Semitic politi- cal heritage in which the pronounced Jewish presence in key areas of economic, political, and cultural life — especially in Vienna — had associated Jews with many developments in Austrian society that were opposed by the country's conservative, rural, and Catholic population. The Jewish population of Austria — almost all of whom lived in Vienna — numbered around 220,000 in 1938. In general, Nazi anti- Semitic legislation and policies were imposed more quickly and more comprehensively in Austria than in Germany, and Austria became the testing ground for the political acceptability of policies later adopted in Germany. After allowing a wave of violent popular anti- Semitism in the weeks immediately after the Anschluss, the Nazis systematized anti-Semitic harassment. Laws and regulations were implemented to drive Jews from the economic sector, and out of Austria in general, in an orderly manner to ensure that the transi- tion did not disrupt the economy or cause the loss of economically valuable assets. Initially, Jews were encouraged to emigrate — after they had been stripped of money and assets — and the Central Office for Jewish Emigration (Zentralamt jiidischer Auswanderung — ZjA) was set up in Vienna to streamline the emigration process. In 1938 about 80,000 Jews left Austria, legally and illegally, and ultimately some 150,000 fled. In October 1941, however, Germany's policy of encouraging emigration, already made difficult by the war, was replaced with policies to exterminate the Jews. The ZjA, which had been expanded to the occupied countries, organized the regis- tration and transportation of Jews to death camps to implement the so-called Final Solution. About one-third of Austria's Jewish population is estimated to have died in the Holocaust. In addi- tion to the Jews, there were other victims of murderous Ger- man nationalism. Austrian Slavic minorities, such as the Czechs, Slovaks, Slovenes, and Croats, for example, were targeted for assimilation, deportation, or extermination (see Social Minorities, ch. 2). 46 Historical Setting Repression and Compliance In comparison with non-German minorities, the political repres- sion suffered by German Austrians was lenient but still effective in preventing significant organized resistance. The left had already been the target of political repression before the Anschluss, but as early as March 1938, conservative political leaders associated with the Dollfuss-Schuschnigg regime were also subject to arrest and detention. Some 20,000 people were arrested in the early days of the Anschluss. Most were quickly released, but some, like Schusch- nigg, were held at the Dachau concentration camp throughout the Nazi era. During the entire 1938-45 period, some 100,000 Aus- trians were arrested on political charges. About 34,000 of these died in prisons or concentration camps, and some 2,700 were executed. Prior to the Anschluss plebiscite, the Nazis courted and received the support of the Roman Catholic hierarchy for annexation. Af- ter the plebiscite, the church desired to maintain loyal coopera- tion with what was perceived as legitimate state authority, but the Nazis were just as eager to eliminate the church's influence in so- ciety on both the institutional and the ideological level. In July 1938, the government declared the 1934 concordat void and closed Catho- lic education institutions, dissolved some 6,000 church-affiliated associations, and took control of the Catholic press. In August re- lations between the church hierarchy and the state were broken off. Although it did not see its role as supporting open resistance to the Nazi state, the Catholic Church, as the only legal entity propagating an ideology intrinsically hostile to Nazism, was a fo- cus of opposition to the regime and was closely watched by the state. The persecution of the church over the next several years was designed to gradually wear it down by depriving it of resources and institutional unity. These measures, which evoked popular resentment, were eased in late 1941 because of the need to main- tain public support of the regime during the war. Nevertheless, by detaching the church from the state, the policies had the effect of increasing the church's legitimacy and credibility and helped lay the groundwork for a more positive redefinition of the church's role in society after the war. World War II and the Defeat of Nazi Germany In a strict sense, Austria was not a participant in World War II because it did not formally exist when the war began with the invasion of Poland in September 1939, On an individual level, however, some 800,000 Austrians were drafted into the army (the German Wehrmacht), and another 150,000 served in the Waffen 47 Austria: A Country Study SS, an elite Nazi military unit. Austrians were integrated into Ger- man units, and no specifically Austrian military brigades were formed. Austrians loyally supported Germany through the early years of World War II. The early German military victories and Aus- tria's geographic location beyond the reach of Allied bombers shield- ed the Austrian population from the full impact of the war. Only after the German defeat at the Battle of Stalingrad in early 1943, when the course of the war increasingly turned against Germany, did popular support for the war and for the Anschluss begin to erode. More important for Austria's future, however, was the evolu- tion in the Allies' position on Austria. In November 1943, the for- eign ministers of the Soviet Union, Britain, and the United States met and issued the Moscow Declaration. In contrast to the earlier Allied acceptance of the Anschluss, the declaration described Aus- tria as "the first victim of Hitlerite aggression" and called for the reestablishment of an independent Austria. At the same time, however, the declaration also held Austria liable for its participa- tion in the war, effectively giving it the status of an enemy state. Allied advances in Italy in 1943 enabled bombers regularly to attack Austrian industrial and transportation centers. The winter of 1944-45 saw an intensification of the air campaign and steady advances toward Austria by the Soviet Union's Red Army. On March 30, 1945, the Red Army entered Austrian territory and cap- tured Vienna on April 1 3 . Although the Germans resisted the Soviet advances into eastern Austria, the Western Allies — the United States, Britain, and France — met minimal resistance as they ad- vanced into the country. United States forces began entering Aus- tria on April 30, and French and British troops soon followed. On May 8, 1945, Germany surrendered unconditionally. Restored Independence under Allied Occupation Foundation of the Second Republic As the Soviet troops advanced on Vienna, they occupied the town where Socialist leader Karl Renner lived in retirement. Despite his anti-Soviet reputation, Renner was chosen by the Soviet lead- ers to form and head a provisional government, apparentiy believing the aging politician would be an easily manipulated figurehead. Renner, however, established authority based on his leadership role in the last freely elected parliament, not on the backing of the Soviet Union. Conditions did not permit the members of the old parlia- ment to be summoned, as had been done in 1918, so Renner turned 48 St. Stephen's Cathedral, Vienna Courtesy Embassy of Austria, Washington 49 Austria: A Country Study to the leaders of the three nonfascist parties that the Soviet leaders had already allowed to become active and established a provisional city administration in Vienna in early April. The three parties con- sisted of the Socialist Party of Austria (Sozialistische Partei Osterreichs — SPO), a reorganization of the SDAP; the Austrian People's Party (Osterreichische Volkspartei — OVP), a reorgani- zation of the CSP; and the Communist Party of Austria (Kom- munistische Partei Osterreichs — KPO). Renner apportioned ministries in the provisional government's cabinet roughly based on the political balance of the pre- 1934 era, but the nationalist bloc was excluded and Communist representa- tion increased. The SPO held ten ministries; the OVP, nine; and the KPO, only three, but these included the important ministries of interior, which controlled the police, and of education. Three additional ministries were held by members without party affilia- tion. Because of widespread distrust of the Communists, Renner created undersecretary positions for the two other parties in the Communist-headed ministries. On April 27, 1945, the provisional government issued a decree nullifying the Anschluss and reestablishing an independent, democratic Republic of Austria under the 1920 constitution as amended in 1929. Germany had yet to surrender, however, and the formation of a provisional government in Soviet-occupied Aus- tria surprised the Western Allies, who had yet to enter Austria. The Western Allies feared that the provisional government was a puppet of the Soviet Union and declined to recognize it. This de- cision left the Renner government dependent on the Soviet Union but forced it to allow the provisional government the means to es- tablish reasonable credibility so Western acceptance could be won. Thus, as pre- 1938 political figures became active in the areas oc- cupied by United States, British, and French troops, the Renner government was allowed to establish contact with them despite in- itial Soviet plans to seal off its occupation zone. Four Power Occupation and Recognition of the Provisional Government The four Allied powers had not agreed to any firm plans for Aus- tria prior to the war's end, and only in early July 1945 were the borders dividing the country into four occupation zones finally set. Vienna's city center was placed under Four Power control, while the rest of the city was divided into specific occupation zones. Supreme authority in Austria was wielded by the Allied Council, in which the Four Powers were represented by their zonal 50 Historical Setting commanders. Each of the four Allies held veto power over the de- cisions of the council. The Allied Council held its first meeting in early September, but the Western Allies still declined to recognize the Renner govern- ment. Soon thereafter the provisional government held a meeting in Vienna attended by representatives from parties from all the occupation zones. Unlike the situation after World War I, the provinces displayed no separatist tendencies — the experience of the Anschluss and World War II had forged an appreciation of a com- mon Austrian identity. The provisional government was expand- ed to accommodate national representation, and the representatives agreed to national elections. Because of these developments, the Allied Council recognized the provisional government on October 20, 1945. The 1945 Election and Consolidation of the Austrian Government The first national election since 1930 was held on November 25, 1945. Nazi Party members were barred from participation. This exclusion sharply limited electoral participation by the nationalist camp, and no party was formed to represent its viewpoint. The OVP was thus able to monopolize the entire anti-left vote. Voters gave overwhelming support to the two democratic parties: the OVP received nearly 50 percent of the vote and eighty-five seats in the Nationalrat, and the SPO received 45 percent of the vote and seventy-six seats. The KPO received only 5 percent — well below its anticipated 25 percent — and four seats. Although the OVP thus held an absolute majority in parliament, the government, headed by Chancellor Leopold Figl of the OVP, preserved the three-party coalition. The distribution of cabinet seats was adjusted, however, with the KPO receiving only a specially created and unimportant Ministry for Electrification. In Decem- ber parliament elected Renner to the largely ceremonial position of president of the republic. With the Austrian government clearly evolving along democratic lines, the Western Allies grew more sup- portive, and the Soviet Union grew increasingly hostile. In 1946, however, the Soviet Union agreed to changes in the Four Power Control Agreement that governed the relationship between the Four Powers and the Austrian government, thus weak- ening their influence. Originally, Austrian legislation had to be unanimously approved by the Allied Council, effectively giving each of the Allies veto power. In light of the Austrian government's democratic bent, the Western Allies favored allowing laws passed by the government to take effect unless the Allied Council unani- mously rejected them. Although the Soviet Union was generally 51 Austria: A Country Study opposed to surrendering its veto power, it hoped to extract an agree- ment from the Austrians that would give the Soviet Union effec- tive control over Austrian petroleum resources and thus did not want the other Allies to be able to veto any eventual agreement. In June 1946, the Allied powers agreed to a compromise. Agree- ments between one of the occupying powers and Austria would not be subject to a veto. "Constitutional laws" would require the approval of the Allied Council and thus remain subject to vetoes by the individual Allies, but all other laws would take effect in thirty- one days unless rejected by the council. The Soviet Union only realized the implications of the new Con- trol Agreement when a dispute arose over German assets in Aus- tria. In early July 1946, the Soviet Union confiscated German assets in its occupation zone as war reparations — mines, industrial facil- ities, agricultural land, and the entire Austrian oil production in- dustry. To protect the Austrian economy from such Soviet seizures, the Austrian government nationalized German assets. The Soviet Union attempted to veto the nationalization law but was rebuffed by the other Allies, who made it clear that the Austrian govern- ment had wide latitude in determining whether a particular law was a constitutional law or not. Although the Soviet Union was able to prevent implementation of the nationalization law in its oc- cupation zone, the 1946 Control Agreement significantly enhanced the power of the Austrian government. By 1953 more than 550 laws had been implemented over the objection of the Soviet Union. Consolidation of Democracy The experience of the Anschluss and Nazi rule — which for many Austrian politicians had included imprisonment at Dachau — deepened the commitment of the OVP and SPO to parliamentary democracy and Austrian statehood. The electorate remained divided into three political camps — socialist/Marxist, Catholic, and nation- alist/liberal — but cooperation replaced extreme political polari- zation. The SPO ratified the moderate social democratic and anticom- munist outlook of Renner, while downplaying the legacy of Austro- Marxism associated with Otto Bauer, the party's leader after World War I. Over the objections of the left wing, the party rejected an alliance with the KPO, endorsed cooperation with the OVP, and sanctioned the rebuilding of a capitalist economy tied to the West. It also decided to seek broad support beyond its working-class base. The OVP underwent a similar transformation. Many of its post- war leaders, drawn largely from people associated with the pre- war CSP trade unions and peasant organizations, had developed 52 Historical Setting personal relationships with socialist leaders during their time at Dachau. After the war, they advanced a program emphasizing free- dom and social welfare. Although essentially a Christian democratic party, the OVP sought to broaden its constituency and downplayed its confessional identification. No formal organizational ties were established with the Roman Catholic Church, and clerics were barred from running for office on the party's ticket. Denazification posed a special problem for the emerging demo- cratic society, often referred to as the Second Republic. Favorable Allied treatment of Austria was based in part on the premise that it was a liberated victim of Nazi aggression and not a Nazi ally. Thus, the government wanted to avoid any suggestion of collec- tive guilt while at the same time prosecuting individual Nazis. The party and its affiliates were banned, and ex-members were required to register. Approximately 536,000 did so by September 1946. The government attempted to draw a distinction between committed Nazis and those who had joined because of economic, social, or personal coercion. Thus, the presumably more committed pre- 1938 Nazis were dismissed from the civil service and a variety of other professions. Special tribunals were created to try war crimes. Following the 1945 parliamentary election, the Allies sought more extensive denazification. In February 1947, the Figl government enacted the National Socialist Act. The law distinguished between "more implicated" persons, such as high party officials, and "less implicated" persons, such as simple party members. Individuals in both categories were subject to fines and employment restric- tions, but with different levels of severity. By 1948, however, po- litical and popular support for what was perceived as indiscriminate denazification was waning. Ex-Nazis and their families accounted for nearly one-third of the population, and both major parties feared that the stability of Austrian political and civil society would be undermined if they were not eventually reintegrated. In June 1948, the government promulgated the Amnesty Act, which restored full citizenship rights to the less implicated ex-Nazis before the 1949 election. Some 42,000 people, however, those categorized as more implicated, remained excluded from full participation in the na- tion's life. Both the SPO and the OVP actively solicited the electoral sup- port of ex-Nazis, but this new bloc of voters also enabled the for- mation of a successor party to the prewar parties in the nationalist-liberal camp. The SPO encouraged the formation of the new party, known as the League of Independents (Verband der Unabhangigen — VdU), expecting that it would split the antisocialist 53 Austria: A Country Study vote and thus weaken the OVP. In the October 1949 parliamen- tary election, however, the SPO lost nine seats, compared with the eight lost by the OVP. The VdU, with nearly 12 percent of the vote, won sixteen of these seventeen seats. The KPO, with 5 percent of the vote, increased its representation from four to five seats. Although the OVP thus lost its absolute majority in the Nationalrat, it was still the largest party, with seventy-seven seats and 44 percent of the vote. The SPO held sixty-seven seats, hav- ing won nearly 39 percent of the vote. The OVP and the SPO formed another coalition government with Figl as chancellor, con- tinuing what was to become known as the "grand coalition." To limit conflict between themselves, the coalition partners de- vised a system to divide not only cabinet ministries but also the entire range of political patronage jobs in the government and na- tionalized industries based upon each party's electoral strength. This proportional division of jobs, called the Proporz system, be- came an enduring feature of coalition governments. Austria's Integration with the West Early Soviet expectations for domination of Austria were pinned on a serious misreading of the KPO's electoral strength, and real- ity forced the Austrian Communists and their Soviet backers to turn to extraparliamentary means. With the Soviet Union occupy- ing Austria's industrial heartland, the KPO hoped first to gain con- trol of the labor movement and then to exploit popular discontent with the difficult postwar economic situation to bring mass pres- sure to bear on the government. As part of its overall strategy, the KPO sought to weaken the SPO by encouraging party factional- ism and to undermine the cooperation between the two major par- ties. Similar tactics successfully brought Communists to power in neighboring East European countries in the late 1940s. But in Aus- tria, Socialists united around Renner's social democratic approach and managed to outflank the Communists for worker support, as they had done after World War I. In 1947 and 1948, the Soviet Union attempted to block Aus- tria's participation in United States-sponsored aid programs, in- cluding the European Recovery Program (known as the Marshall Plan), and in the fall of 1947 the KPO pulled out of the coalition government over this issue. Ironically, the provisions that the Soviet Union itself had sought in the 1946 Control Agreement enabled Austria to freely sign the aid agreements and join the Organisa- tion for European Economic Co-operation (OEEC), the body charged with planning how to use the Marshall Plan. Member- ship in the OEEC facilitated Austria's economic integration with 54 The State Treaty of 1955, which ended Austria 's occupation and restored the country's sovereignty, is displayed by its signatories in Vienna. Courtesy Embassy of Austria, Washington the West and provided the economic basis for a stable parliamen- tary democracy in the postwar period. The 1955 State Treaty and Austrian Neutrality A key objective of post- 1945 Austrian governments was ending the Four Power occupation and preventing the permanent divi- sion of Austria. The Allies' greater preoccupation with Germany delayed formal treaty negotiations with Austria until January 1947. By then, however, the larger strategic issues of the Cold War over- shadowed the negotiations. The Soviet Union dropped its support for Yugoslav territorial claims against Austria in 1948 when Yu- goslavia broke with the Soviet Union, but new issues arose to block progress toward ending the occupation: the Berlin blockade of 1948; the founding of the North Atlantic Treaty Organization (NATO) and the division of Germany into two rival states in 1949; and the start of the Korean War in 1950. Following Soviet leader Joseph Stalin's death in March 1953, the Austrian government, headed by the newly elected chancel- lor, Julius Raab, sought to break the stalemate by proposing that Austria promise not to join any military bloc. The Indian ambas- sador to Moscow, acting as intermediary for the Austrians, went 55 Austria: A Country Study further and suggested permanent neutrality as the basis for a treaty. The Western Allies did not favor this proposal, and the Soviet Union continued to insist on the priority of a settlement in Germany. In late 1954 and early 1955, however, the Western Allies and the Soviet Union feared that the other side was preparing to in- corporate its respective occupation zones into its military bloc. In February the Soviet Union unexpectedly signaled its willingness to settle the Austrian question. In April a delegation composed of Raab, Figl, Adolf Scharf, and Bruno Kreisky went to Moscow. Four days of intense negotiations produced a draft treaty premised on permanent Austrian neutrality. The Western Allies only grudg- ingly accepted the draft for fear that it would be a model for Ger- man neutrality. They particularly objected to a proposed Four Power guarantee of Austrian neutrality, believing that it would pro- vide an opportunity for Soviet intervention in Austria. Under strong Western opposition, the Soviet Union dropped the proposal. On May 15, 1955, the State Treaty was signed. The treaty for- bade unification with Germany or restoration of the Habsburgs and provided safeguards for Austria's Croat and Slovene minori- ties. Austrian neutrality and a ban on foreign military bases in Aus- tria were later incorporated into the Austrian constitution by the Law of October 26, 1955. The 40,000 Soviet troops in Austria were withdrawn by late September. The small number of Western troops that remained were withdrawn by late October. The Grand Coalition and the Austrian People's Party Coda, 1955-70 Foreign Policy in the Late 1950s and the 1960s After the signing of the State Treaty, Austria's foreign policy con- cerns focused on three issues: South Tirol, European economic in- tegration, and the meaning of neutrality. The status of the ethnically German province of South Tirol had been an Austrian concern ever since the province's transfer to Italy after World War I. Austria hoped that Italy's participation on the losing side of World War II might open the door to the Allied powers' awarding of the disputed territory to Austria. But the strategic interests of the Western Allies after the war forced Austria to settle for a 1 946 agreement in which Italy promised South Tirol autonomous rights. In 1948, however, Italy undercut the autonomy of the South Tiroleans by expanding the autonomous region to include the en- tire province of Trentino, the total population of which was two- thirds ethnically Italian. The South Tiroleans appealed to Austria for assistance. The General Assembly of the United Nations (UN) 56 Historical Setting adopted a resolution in 1960 instructing Italy and Austria to enter into negotiations on the issue. Austria's right to intervene on be- half of the South Tiroleans was thus affirmed but brought no results until 1969. In the intervening years, South Tirolean activists un- dertook a terrorist bombing campaign, which, Italy alleged, Aus- tria facilitated through lax border controls. The 1969 agreement affirmed South Tirol's autonomous rights, including the use of Ger- man as the official language. The International Court of Justice in The Hague was given the right to judge disputes over implemen- tation of the pact, and Austria waived its rights to intervene. Although the OEEC continued to function as a coordinating body for European economic integration after the end of the Marshall Plan in 1952, six of its members sought closer economic integra- tion. In 1957 they formed the European Economic Community (EEC — see Glossary). Because Austria's main trading partners, the Federal Republic of Germany (West Germany) and Italy, be- longed to the EEC, Austria would have liked to join that organi- zation. But provisions in the EEC agreement imposed obligations in time of war, which were viewed as inconsistent with Austrian neutrality. Further, EEC membership also raised questions regard- ing unification with Germany, which was forbidden by the State Treaty. Austria thus joined six other countries in a looser, strictly economic association, the European Free Trade Association (EFT A — see Glossary), established in 1960. This was not an entirely sat- isfactory solution, and in 1961 Austria sought limited, associated membership in the EEC. The Soviet Union objected to Austria's association with the EEC as a violation of Austria's neutrality. Austria responded that be- cause its neutrality was a matter of Austrian law, Austria alone had the right to judge what were or were not violations. Nonethe- less, Austria proceeded cautiously to avoid needlessly provoking the Soviet Union. EEC members also questioned Austria's mem- bership. Italy blocked Austria's application to the EEC in 1967 because of the dispute over South Tirol. French president Charles de Gaulle was cool toward Austrian membership, both because of his desire to maintain relations with the Soviet Union and because of his concern that it might strengthen West Germany's position to the detriment of that of France. Austria's persistence, the reso- lution of South Tirol's status, and de Gaulle's retirement, however, paved the way for an agreement between Austria and the EEC in 1972 (see Austria and European Integration, ch. 3). When Austria adopted a policy of neutrality in 1955, its leaders made it clear that political neutrality did not mean moral neutrality. 57 Austria: A Country Study Austrian sympathies clearly lay with the Western democracies, an attitude that was reinforced by its opposition to the Soviet inva- sion of Hungary in 1956 and of Czechoslovakia in 1968. Nonethe- less, Austria attempted to cultivate good relations with the Soviet bloc countries, which accounted for about one-sixth of Austrian exports in the mid-1960s. Austria thus benefited when detente eased relations between East and West in the late 1960s and early 1970s. Austria's efforts to make itself a bridge between East and West — an idea the Austrians had proposed as early as 1945 — however, remained a largely unfulfilled ambition. Elections and Parties The outcome of the four parliamentary elections between 1955 and 1970 hinged on relatively small changes in the division of the votes. The OVP consistently held the largest number of seats in the Nationalrat and thus leadership of the OVP-SPO coalition, the so-called grand coalition, even though in the 1959 election it polled fewer votes than the SPO. Prior to the 1966 election, the share of the vote received by the OVP fluctuated between 44 and 46 percent. By achieving an increase to 48 percent in 1966, the party was able to win eighty-five parliamentary seats, an absolute majority. Julius Raab served as chancellor between 1953 and 1961, when he was replaced by Alphons Gorbach. Gorbach brought some younger politicians into the party's leadership, where they began to press for reforms. One of these younger men, Josef Klaus, replaced Gorbach as chancellor in 1964 and headed the OVP government between 1966 and 1970. His rise, coming about the same time as the deaths of Raab and Figl, marked the passing of party leadership to a younger generation that had not experienced the trauma of the 1930s. The SPO saw its share of the vote fluctuate between 42 and 45 percent over the course of the four elections. Although the SPO held the position of junior partner in the coalition, the electorate consistently gave the presidency of the republic to the SPO follow- ing reinstitution of direct elections for that post in 1951. Theodor Korner, who had succeeded Renner in 1951, died in office prior to the 1957 presidential election. Scharf, who had been chairman of the SPO since 1945, handily won the 1957 election and was re- elected in 1963. When he died in 1965, he was succeeded by the Socialist mayor of Vienna, Franz Jonas. The VdU was reorganized in 1956 as the Freedom Party of Aus- tria (Freiheitliche Partei Osterreichs — FPO). Its share of the vote ranged from about 5 percent to 8 percent. The party drew on a 58 Historical Setting diverse base of voters that included liberals, anticlerical conserva- tives, monarchists, and former Nazis. The KPO was hurt by its association with the Soviet Union and by events in Eastern Europe, particularly the Soviet invasion of Hungary. The party's already small share of the vote continued to decline, from about 4.5 percent in 1956 to just over 3 percent in 1962. After 1959 the KPO held no seats in the Nationalrat. Domestic Tranquillity under the Grand Coalition The pattern of political cooperation established during the oc- cupation years and the economic reconstruction that took place through the Marshall Plan laid the foundation for eleven years of political tranquillity and economic prosperity. In 1957 the govern- ment informally established the Parity Commission for Prices and Wages. This commission soon far exceeded its intended function of setting prices and wages and effectively established the coun- try's basic economic policy. By bringing together the representatives of the major economic interest groups — the social partners — and requiring unanimous decisions, the commission became a power- ful stabilizing force in Austrian society. The effort of the SPO to broaden its electoral base helped resolve long-standing questions about the status and role of the Roman Catholic Church. The party realized that its inheritance of liberal anticlericalism and Marxist hostility toward religion stood in the way of attracting supporters who were devout Roman Catholics. As the SPO moved away from Marxist rhetoric, party leaders be- gan to bridge the gulf between the SPO and Roman Catholics. In this eased atmosphere, the coalition partners were able to put the divisive issue of the 1934 concordat behind them. A new agree- ment with the Vatican was signed in 1960. The overall effect of the O VP- SPO grand coalition and the so- cial partnership represented by the Parity Commission, which brought together major economic groups, was to limit parliament's power. Most major economic and social decisions were made out- side parliamentary channels and simply ratified by the National- rat, usually unanimously. Because no major policy differences were at stake, elections mainly served to determine the proportion of the patronage positions that would be accorded to the coalition part- ners. As the country progressed from the trauma of World War II and the occupation, members of both major parties began to express dissatisfaction with the coalition and the toleration of mis- management and abuse of public office that the system appeared to condone. In the 1966 electoral campaign, OVP leader Klaus called for an end to the grand coalition. After winning an absolute 59 Austria: A Country Study majority, however, the OVP proposed terms for continuing the coalition, which Kreisky and other SPO leaders unsuccessfully urged their party to accept. Despite the breakup of the coalition, the Klaus government introduced no significant breaks with past policy. The OVP's four years in office were thus a coda to the grand coalition before the long period of SPO domination under Kreisky began in 1970. The Kreisky Years, 1970-83 Electoral Politics in the Kreisky Era As the Austrian economy developed in the 1950s and 1960s, the nature of the electorate slowly shifted. The declining economic im- portance of agriculture and forestry undermined the rural base of the OVP. Further, economic growth was occurring primarily in the service sector, not in heavy industry or manufacturing, the tradi- tional base of the SPO. By 1970 service- sector employees constituted just under 40 percent of the working population, and both parties sought to position themselves in the middle of the political spectrum in order to attract these voters. Under the leadership of Bruno Kreisky, the SPO proved more adept at redefining itself in this new era. Kreisky' s personal popularity played a large part in the success of the SPO, and the party capitalized on this by campaigning on slogans like "Kreisky — who else?" and "Austria needs Kreisky." Although Kreisky came from a wealthy Viennese Jewish family, he declared himself an agnostic. Kreisky had been imprisoned in the mid- and late 1930s for political activity, but the Nazi regime eventually allowed him to emigrate to Sweden, where he became acquainted with Swedish socialism and met Willy Brandt, the future leader of the German Social Democrats. Kreisky returned to Austria after the war and by the early 1950s was working in the Ministry for Foreign Affairs and becoming active in party politics. Kreisky was deeply involved in efforts to broaden SPO appeal in the 1950s. As chancellor, he continued to move the party toward the political center, reaching out toward swing voters and Roman Catholic and rural constituencies. Indicative of SPO reconciliation with the mainstream of Austrian culture and history was campaign literature in 1979 that featured Kreisky sitting beneath a portrait of Emperor Franz Joseph. As the differences between the two major political parties lessened, the OVP found it difficult to enunciate a distinct political identity because Kreisky so successfully occupied the middle ground. 60 Historical Setting In the election of 1970, the SPO emerged as the largest party but lacked a parliamentary majority. An attempt to revive the grand coalition failed. And Kreisky could not lure the FPO into a coali- tion. But the FPO did agree to cooperate in passing the SPO budget in exchange for electoral reform. Kreisky thus formed a minority government in 1970, and another election was held under a new electoral law in October 1971. The electoral reform raised the number of seats in the Nation- alrat from 165 to 183 and increased the degree of proportionality between a party's percentage of the popular vote and its parliamen- tary seats, thus boosting the fortunes of small parties. The SPO emerged from the election with an absolute majority, winning a bare 50 percent of the vote and ninety-three seats in the enlarged Nationalrat. The OVP won only eighty seats and 43 percent of the vote. The FPO won 5.5 percent of the vote, the same as in 1970, and held ten seats. The election of 1975 repeated the 1971 results. But in 1979, the SPO increased its share of the vote to 5 1 percent and won ninety- five seats. The OVP declined to just below 42 percent and won only seventy-seven seats. The FPO improved its performance slight- ly, getting 6 percent of the vote and taking eleven seats. While the electorate had opted for a Socialist chancellor, it also continued to elect a Socialist or Socialist-backed presidential can- didate throughout the Kreisky era. Six months before the 1970 parliamentary election, Jonas won reelection, defeating Kurt Wald- heim. Jonas died in 1974 and was succeeded by Kreisky's foreign minister, Rudolf Kirchschlager. Although he was not a member of the SPO, Kirchschlager, a practicing Catholic and a political independent, was a Kreisky associate, having been brought into Kreisky's cabinet in 1970. His reelection bid was unopposed in 1980. Domestic Issues Kreisky's style and tone struck a chord with the Austrian elec- torate, and his personal popularity was enhanced by the country's economic prosperity in the 1970s. His legislative and economic pro- gram was built on the existing political consensus and ratified by the social partners. Many measures continued to pass unanimously in the Nationalrat. Employee benefits were expanded, the work- week was cut to forty hours, and legislation providing for equality for women was passed. The period of mandatory military service was cut from nine months to six months. Three issues, however, divided the country: abortion, nuclear power and environmental damage, and ethnic minority rights. 61 Austria: A Country Study In 1973 the SPO passed a law over the opposition of the OVP and the FPO that legalized abortion on demand during the first trimester. Popular opposition backed by the Roman Catholic Church manifested itself in a petition drive that helped bring the issue before parliament again in the spring of 1976. The law, however, was upheld. In the early 1970s, the international energy crisis triggered by the Organization of the Petroleum Exporting Countries (OPEC) oil cartel and the Arab oil embargo exposed Austria's vulnerability to imported energy supplies. To reduce this vulnerability, Kreisky continued the construction of a nuclear power plant at Zwenten- dorf, sixty kilometers from Vienna, and planned the construction of three other plants. As the Zwentendorf facility neared comple- tion in the late 1970s, however, the public expressed growing con- cern about the safety of nuclear power. The SPO did not want to alienate the environmental movement and its bloc of voters, but it also needed to satisfy its trade union constituency, which favored the project. The issue was settled by means of a national referen- dum on November 5, 1978. Despite Kreisky' s vigorous campaign for the plant, the electorate narrowly rejected opening the plant. Seeking to implement provisions in the 1955 State Treaty regard- ing the rights of the country's Croat and Slovene minority com- munities, parliament enacted a law in 1972 to erect dual-language signs wherever the minority population of a locality was at least 20 percent. Such signs were placed in some 200 of the 2,900 towns and villages in Carinthia. With the support of local officials and police, however, the German- speaking population reacted violently and ripped the signs down, reflecting lingering hostility provoked by Yugoslav efforts to annex the province after World War II. In an effort to resolve the matter, the government took a census in 1976 to determine Carinthia's ethnic make-up. Because the Slo- vene population had declined greatly since 1914, when it account- ed for 25 percent of the total populace, Slovene leaders called for a boycott of the census, and the results were not considered relia- ble. Dual-language signs were erected in 1977 where the local minority population was believed to be over 25 percent. Foreign Policy Under Kreisky' s leadership, Austria sought to play an active role in international politics in the 1970s, particularly through the UN. Reflecting the acceptance of Austrian neutrality, Waldheim, the unsuccessful conservative presidential candidate in 1970, was elected UN secretary general in 1971 and reelected to that post in 1976. Austria continued to cast itself as a bridge between East and West, 62 Historical Setting and Vienna was the site for some early rounds of the Strategic Arms Limitation Talks (SALT) between the United States and the Soviet Union. Kreisky became personally involved in issues relating to the Arab-Israeli conflict. Despite general support for maintenance of Israeli security, he criticized Israel for its treatment of the Pales- tinians. In 1980 Austria gave de facto recognition to the Palestine Liberation Organization (PLO) by accepting an accredited agent of the PLO in Vienna. Throughout the 1970s, however, Austria was also a transit point for Jews leaving the Soviet Union for des- tinations in Israel and the West. Austria established a more favorable trading relationship with the EEC in 1972, but the EEC continued to move toward still fuller economic and political integration in Western Europe. Although Kreisky pointed to the possibility of Austria's adopting legislation on its own in coordination with these developments, he stressed that Austria's neutrality would continue to prevent full member- ship in the EEC unless it were expanded to include all of Europe. End of the Kreisky Era During Kreisky 's tenure as chancellor, Austria enjoyed un- precedented prosperity, but by the time the April 1983 election approached, the SPO had few fresh ideas with which to attract critical swing voters. Its image also suffered from various political and financial scandals (see Political Developments since 1983, ch. 4). Its proposal for a tax hike aimed at upper-income Austrians to finance job creation was countered by the OVP with promises of no new taxes and more careful use of existing government tax revenues. Although the OVP failed to unseat the SPO as the larg- est party in the Nationalrat, the OVP benefited from a significant shift in voter sentiment, and the SPO lost its majority, winning ninety seats, which was five seats fewer than in 1979. The OVP gained four seats for a total of eighty-one. The FPO won an addi- tional seat, for a total of twelve, despite a decline in its share of the vote. Two "green" parties, the United Greens of Austria (Vereinigte Griine Osterreichs — VGO) and the Alternative List of Austria (Alternative Liste Osterreichs — ALO), sought to rally voters on environmental issues. Together they took about 3.3 per- cent of the vote but won no parliamentary seats. Kreisky had campaigned strongly for an absolute majority and resigned rather than lead a coalition government. His minister of education, Fred Sinowatz, became chancellor in 1983, heading an SPO-FPO coalition. Kreisky 's departure marked a major turn- ing point in Austria's postwar history, and the Sinowatz govern- ment was to be a transitional phase into the contemporary era. 63 Austria: A Country Study * * * Given the scope of Austrian history and Austria's complex rela- tionships with the other countries of Central Europe, English- language histories of Austria generally focus on particular segments of Austrian history rather than on an attempt to give equal atten- tion to all centuries. Alexander Wigram Allen Leeper's A History of Medieval Austria is a key source for medieval history prior to the Habsburgs. The Habsburg Empire, 1790-1918 by Carlile Aylmer Macartney is an excellent and inclusive treatment of the late his- tory of the Habsburg Empire, although its level of detail and thoroughness may be more than the casual reader desires. Robert A. Kann's A History of the Habsburg Empire, 1526-1918 is a more accessible text, focusing on broader themes rather than on the minu- tiae of history. Robert John Weston Evans's The Making of the Habs- burg Monarchy, 1550-1700 also takes a thematic approach but covers only a portion of the Habsburg centuries. However, it provides a useful examination of the intellectual underpinnings of the Habs- burg state. Barbara Jelavich has written two excellent books covering the post-1815 era: The Habsburg Empire in European Affairs, 1814-1918 and Modern Austria: Empire and Republic, 1815-1986. Their relative brevity and conciseness make them excellent overviews. The selection of books covering specific topics is growing stead- ily. Of particular interest and merit are Samuel R. Williamson, Jr . ' 's Austria- Hungary and the Origins of the First World War; Radomir Luza's two books, Austro-German Relations in the Anschluss Era and The Resistance in Austria, 1938-1945; and Alfred D. Low's The An- schluss Movement, 1918-1938. For those interested in more current history, Melanie A. Sully's A Contemporary History of Austria focuses on the post-Kreisky era. (For further information and complete citations, see Bibliography.) 64 Chapter 2. The Society and Its Environment Coat of arms of the province of Vorarlberg AUSTRIA'S SECURITY AND PROSPERITY during the sec- ond half of the twentieth century are a striking contrast to the in- stability and poverty of the first half of the century. Between 1914 and 1950, Austrians had five different forms of government and four different currencies. After enduring much hardship during World War I, they experienced the collapse of Austria-Hungary (also seen as the Austro- Hungarian Empire) and the proclamation of the Republic of Austria. In the early 1920s, they endured hyperin- flation and in the 1930s the Great Depression. The end of Aus- tria's fledgling democracy and the establishment of an authoritarian regime in 1934 were followed by the demise of Austria altogether when Nazi Germany occupied the country in 1938. The procla- mation of the Second Republic in 1945 began a long period of peace and prosperity. However, the republic's first years were a difficult time of economic and social reconstruction that occurred while Aus- tria was occupied by the Four Powers (Britain, France, the Soviet Union, and the United States). War, inflation, unemployment, poverty, authoritarian and totalitarian rule, and foreign occupa- tion formed the average Austrian's experience during the first half of the twentieth century. The new state of Austria that emerged out of the chaos of World War I faced such serious structural problems that many of its citizens doubted it could survive. Social and economic relationships that had evolved over centuries either ended or were greatly altered. Moreover, the regions of this small German-speaking "rump state" did not join together well to form a new nation. Austria's rural areas, populated predominantly by peasant-farmers, were under- developed, most notably in the Alpine regions of western and cen- tral Austria. They did not mesh well with the large urban and industrial centers in eastern Austria, especially Vienna, which had evolved to meet the markets and needs of an entire empire, not a small state. The virtual absence of an Austrian national identity merely aggravated concerns about the state's viability. The events of the late 1930s and 1940s proved these concerns justified, but by 1955 Austria had regained its independence, laid the foundations for decades of sustained economic growth, and established a system of cooperation among rival political parties, interest groups, and government bodies that brought the country an unprecedented degree of stability. Stability did not bar change, however, and Austrian society changed greatly as a thriving, 67 Austria: A Country Study continuously modernizing economy altered the way Austrians earned their living and the way they lived. The number of Austrians engaged in agriculture and forestry fell from more than 60 percent at the end of World War II to 7 percent by the beginning of the 1990s. More and more Austrians came to live in urban areas, and over two-thirds of the country's population was concentrated in the valleys and lowlands of eastern Austria. The initial industrial growth was followed by a pronounced shift to the service sector, and peasant-farmers or blue-collar work- ers, who had frequently lived and worked under abject conditions, increasingly were replaced by white-collar, service-sector employees. By the early 1990s, this sector employed more than 50 percent of the labor force in a society that was predominantly middle class. The country's population reflects the political and economic trau- mas that occurred between 1914 and 1945. Austria has been by turns a land of immigration and emigration. After the two world wars and during the Cold War, it was a haven for many refugees from Eastern Europe. Before and during World War II, however, many Austrians fled for racial or political reasons. During the 1960s and later, an increasing number of foreigners from southeastern and Eastern Europe settled in Austria. Their presence offset to some degree the negative growth rate of the country's indigenous popu- lation. The Austrian family has also changed, both in size and in struc- ture. During the last generation, it has became smaller. Traditional family values and life-styles are in a state of rapid transition, as evidenced by the increasing number of people living alone, child- less marriages, and steadily increasing rates of divorce and ille- gitimacy. Although Austria is a predominantly Roman Catholic country, these changes show that religion no longer plays as im- portant a role as in the past. Social change has led to a much more open, democratic, socially mobile, and prosperous society in which there are few rigid class distinctions. Traditionally disadvantaged groups have had greater access to secondary and university education. Furthermore, Aus- tria has a highly developed welfare state that provides a broad spec- trum of social security and health care benefits. As a result, in the early 1990s the quality of life in Austria was rated the world's tenth best by Washington's Population Crisis Committee. Austrians have also developed a new and unprecedented national consciousness. For the first time, they have come to see themselves as a distinct people separate from their German neighbors. They have also found a new European role as a neutral state between the East and the West. However, the anticipated and unanticipated 68 The Society and Its Environment dynamics of West European and East European development — European economic and political integration and the opening of Eastern Europe — have changed the hopes and expectations Aus- trians have entertained, as well as the nature of their fears and anxieties. Geography Austria is a small, predominantly mountainous country located in south-central Europe. It has a total area of 83,859 square kilo- meters, about twice the size of Switzerland and slightly smaller than the state of Maine. The landlocked country shares national bor- ders with Switzerland and the tiny principality of Liechtenstein to the west (200 kilometers together), Germany (784 kilometers) and the Czech Republic and Slovakia (568 kilometers together) to the north, Hungary to the east (346 kilometers), and Slovenia (311 kilometers) and Italy (430 kilometers) to the south. The westernmost third of the somewhat pear-shaped country con- sists of a narrow corridor between Germany and Italy that is be- tween thirty-two and sixty kilometers wide. The rest of Austria lies to the east and has a maximum north-south width of 280 kilo- meters. The country measures almost 600 kilometers in length, extending from Lake Constance on the Austrian-Swiss border in the west to the Neusiedler See on the Austrian-Hungarian border in the east. The contrast between these two lakes — one in the Alps and the other a typical steppe lake on the westernmost fringe of the Hungarian Plain — illustrates the diversity of Austria's land- scape. Seven of Austria's nine provinces have long historical traditions predating the establishment of the Republic of Austria in 1918: Upper Austria, Lower Austria, Styria, Carinthia, Salzburg, Tirol, and Vorarlberg (see fig. 1). The provinces of Burgenland and Vienna were established after World War I. Most of Burgenland had been part of the Kingdom of Hungary, but it had a predomi- nantly German-speaking population and hence became Austrian. Administrative and ideological reasons played a role in the estab- lishment of Vienna as an independent province. Vienna, histor- ically the capital of Lower Austria, was a socialist stronghold, whereas Lower Austria was conservative, and both socialists and conservatives wanted to consolidate their influence in their respec- tive provinces. Each province has a provincial capital with the ex- ception of Vienna, which is a province in its own right in addition to being the federal capital. In Vienna, the City Council and the mayor function as a provincial parliament and provincial gover- nor, respectively. 69 Austria: A Country Study Landform Regions The two best-known features of the Austrian landscape are the Alps and the Danube River (see fig. 5). The Danube has its source in southwestern Germany and flows through Austria before emp- tying into the Black Sea. It is the only major European river that flows eastward, and its importance as an inland waterway has been enhanced by the completion in 1992 of the Rhine-Main-Danube Canal in Bavaria, which connects the Rhine and Main rivers with the Danube and makes possible barge traffic from the North Sea to the Black Sea. The major rivers north of the watershed of the Austrian Alps (the Inn in Tirol, the Salzach in Salzburg, and the Enns in Styria and Upper Austria) are direct tributaries of the Danube and flow north into the Danube Valley, whereas the rivers south of the watershed in central and eastern Austria (the Gail and Drau rivers in Carinthia and the Miirz and Mur rivers in Styria) flow south into the drainage system of the Drau, which eventually empties into the Danube in Serbia. Consequently, central and eastern Aus- tria are geographically oriented away from the watershed of the Alps: the provinces of Upper Austria and Lower Austria toward the Danube and the provinces of Carinthia and Styria toward the Drau. The Alps cover 62 percent of the country's total area. Three major Alpine ranges — the Northern Alps, Central Alps, and Southern Alps — run west to east through Austria. The Central Alps, which consist largely of a granite base, are the largest and highest ranges in Austria. The Central Alps run from Tirol to approxi- mately the Styria- Lower Austria border and include areas that are permanentiy glaciated in the Otzal Alps on the Tirolean-Italian border and the High Tauern in eastern Tirol and Carinthia. The Northern Alps, which run from Vorarlberg through Tirol into Salz- burg along the German border and through Upper Austria and Lower Austria toward Vienna, and the Southern Alps, on the Carinthia-Slovenia border, are predominantly limestone and dolo- mite. At 3,797 meters, Grossglockner in Carinthia is the highest mountain in Austria. As a general rule, the farther east the North- ern Alps and Central Alps run, the lower they become. The alti- tude of the mountains also drops north and south of the central ranges. As a geographic feature, the Alps literally overshadow other land- form regions. Just over 28 percent of Austria is moderately hilly or flat: the Northern Alpine Foreland, which includes the Danube Valley; the lowlands and hilly regions in northeastern and eastern 70 The Society and Its Environment Austria, which include the Danube Basin; and the rolling hills and lowlands of the Southeastern Alpine Foreland. The parts of Aus- tria that are most suitable for settlement — that is, arable and cli- matically favorable — run north of the Alps through the provinces of Upper Austria and Lower Austria in the Danube Valley and then curve east and south of the Alps through Lower Austria, Vien- na, Burgenland, and Styria. Austria's least mountainous landscape is southeast of the low Leitha Range, which forms the southern lip of the Viennese Basin, where the steppe of the Hungarian Plain begins. The Bohemian Granite Massif, a low mountain range with bare and windswept plateaus and a harsh climate, is located north of the Danube Valley and covers the remaining 10 percent of Aus- tria's area. Human Geography Land-use patterns in Austria change from Alpine to non-Alpine regions. Approximately one-tenth of Austria is barren or unproduc- tive, that is, extremely Alpine or above the tree line. Just over two- fifths of Austria is covered by forests, the majority of which are in Alpine regions. Less than one-fifth of Austria is arable and suit- able for conventional agriculture. The percentage of arable land in Austria increases in the east as the country becomes less Alpine. More than one-fifth of Austria is pastures and meadows located at varying altitudes. Almost one-half of this grassland consists of high-lying Alpine pastures. Historically, high Alpine pastures have been used during the sum- mer for grazing dairy cattle, thus making space available at lower altitudes for cultivating and harvesting fodder for winter. Many of the high pastures are at altitudes of more than 1,000 meters. Although agriculture in mountainous areas was at one time eco- nomically viable, in recent decades it has survived only with the help of extensive subsidies. A concern of farmers in these moun- tainous regions is that membership in the European Union (EU — see Glossary) might entail a curtailment of these subsidies and the end of Alpine agriculture. If this occurs, many areas will be reclaimed by nature after centuries of cultivation. Although the Alps are beautiful, they make many areas of Aus- tria uninhabitable. Austria's so-called areas of permanent settle- ment — regions that are cultivated, continuously inhabited, and used for transportation, but do not include forests, Alpine pastures, or barren land — cover only four-tenths or 35,000 square kilometers of the country. The great majority of the area of permanent settle- ment is in the Danube Valley and the lowlands or hilly regions 73 Austria: A Country Study north, east, and south of the Alps, where approximately two-thirds of the population live. In the country's predominantly Alpine provinces, most of the population live in river valleys: Bregenz on the shores of Lake Con- stance in Vorarlberg; Innsbruck on the Inn River in Tirol; Salz- burg on the Salzach River in Salzburg; and Klagenfurt on the Gail River in Carinthia. The higher the Alps are, the less inhabitable they become in terms of soil, microclimate, and vegetation. Con- versely, the lower and broader the Alpine valleys are, the more densely populated they become. Tirol illustrates most clearly the relationship between Alpine ge- ography and habitation. As the most mountainous province (less than 3 percent of the land is arable), it is the most sparsely inhabited, with an area of permanent settlement of only 15 percent. Because of the Alps, the country as a whole is one of the least densely populated states of Western and Central Europe. With ninety- three inhabitants per square kilometer, Austria has a popu- lation density similar to that of the former Yugoslavia. Austria's national borders and geography have corresponded very little. Since the fall of the Roman Empire, the Alps and the Danube have not served to mark political boundaries. Even within Aus- tria, provincial borders were only occasionally set by the ranges and ridges of the Alps. Although the Alps did not mark political boundaries, they often separated groups of people from one another. Because in the past the Alps were impassable, inhabitants isolated in valleys or net- works of valleys developed distinct regional subcultures. Conse- quently, the inhabitants of one valley frequendy maintained dialects, native or traditional dress, architectural styles, and folklore that substantially differed from those of the next valley. Differences were great enough that the origins of outsiders could easily be identi- fied. However, mass media, mobility, prosperity, and tourism have eroded the distinctness of Alpine regional subcultures to a great extent by reducing the isolation that gave them their particular character. Despite the Alps, Austria has historically been a land of transit. The Danube Valley, for centuries Central Europe's aquatic link to the Balkan Peninsula and the "Orient" in the broadest sense of the word, has always been an avenue of east- west transit. However, Europe's division into two opposing economic and mili- tary blocs after World War II diminished Austria's importance as a place of transit. Since the opening of Eastern Europe in 1989, the country has begun to reassume its historical role. By the early 74 The Society and Its Environment 1990s, it had already experienced a substantial increase in the num- ber of people and vehicles crossing its eastern frontiers. Within the Alps, four passes and the roads that run through them are of particular importance for north-south transit. The Semmering Pass on the provincial border of Lower Austria and Styria con- nects the Viennese Basin with the Miirz and Mur valleys, thus providing northeast-southwest access to Styria and Slovenia, and, via Carinthia, to Italy. The Phryn Pass, between the provinces of Upper Austria and Styria, and the Tauern Pass, between the High Tauern Range and the Low Tauern Range of the Central Alps in Salzburg, provide access to the Mur Valley in Styria and the Drau Valley in Carin- thia, respectively. The highways that run through these passes are important northwest-southeast lines of communication through the Alps. The Phyrn highway has been nicknamed the "foreign work- ers' route" because millions of "guest workers" in Germany use it to return to their homes in the Balkans and Turkey for vaca- tion. Many Germans and northern Europeans also use it in the summer months to reach the Adriatic coast. After the outbreak of hostilities in Yugoslavia in the summer of 1991, however, a sub- stantial amount of this traffic was rerouted through the Danube Valley and Hungary. The most important pass in the Austrian Alps is the Brenner Pass, located on the Austrian-Italian border in Tirol. At 1,370 meters, it is one of the lowest Alpine passes. The Inn Valley and the Brenner Pass historically have been an important and convenient route of north-south transit between Germany and Italy, and they provide the most direct route between Europe's two most highly industrialized regions — Germany and northern Italy. Climate The Alps serve as a watershed for Europe's three major kinds of weather systems that influence Austrian weather. The Atlantic maritime climate from the northwest is characterized by low- pressure fronts, mild air from the Gulf Stream, and precipitation. It has the greatest influence on the northern slopes of the Alps, the Northern Alpine Foreland, and the Danube Valley. The con- tinental climate is characterized by low-pressure fronts with precipi- tation in summer and high-pressure systems with cold and dry air in winter. It affects mainly eastern Austria. Mediterranean high- pressure systems from the south are characterized by few clouds and warm air, and they influence the weather of the southern slopes of the Alps and that of the Southeastern Alpine Foreland, making them the most temperate part of Austria. 75 Austria: A Country Study One peculiarity of the Mediterranean weather systems is the fohn, a warm air mass that originates in the African Sahara and moves north rapidly, periodically raising temperatures up to 10°C in a short period of time. Many people respond to this rapid weather change with headaches, irritability, and circulatory problems. Dur- ing the winter, the rapid warming that accompanies a fohn can thaw the snow cover in the Alps to such an extent that avalanches occur. Given the importance of Alpine skiing for the Austrian tourist industry, December is the month during which the weather is watched with the greatest anticipation. As a rule, Atlantic mari- time weather systems bring snow, and continental weather systems help keep it. However, a predominance of cold, dry continental systems or warm Mediterranean ones inevitably postpones the be- ginning of the ski season. In the summer, Mediterranean high- pressure systems bring warm, sunny weather. Ecological Concerns Austrians face a number of ecological problems in the 1990s. One of the most pressing is the pollution caused by the staggering increase of traffic through the country. Traffic on the superhigh- way going through the Brenner Pass has, for example, increased from 600,000 vehicles per year in the early 1970s to over 10 mil- lion per year in the early 1990s. One-quarter of the traffic cross- ing Austria consists of semitrailers used for heavy transport. The opening of Eastern Europe has only exacerbated the problem of transit traffic. The Alpine valleys through which much of this traffic passes are unusually vulnerable to ecological damage. Narrow valleys are not conducive to dissipation of noise or pollutants caused by motor ve- hicles. Inversions — cold layers of air that trap warm layers of air or warm layers of air that trap cold layers in the valleys and lowlands — also seasonally contribute to the magnitude of the pol- lution problem. Austria has negotiated with the EU to set limits on the amount of commercial transit traffic, especially through Tirol. Work is also under way to develop a "piggy-back" system of loading semitrailers on to flatbed railroad cars in southern Germany and northern Ita- ly, transporting them through Tirol by rail. Environmentalists have pushed for measures that are more far-reaching. They advocate, for example, digging a tunnel from Garmisch-Partenkirchen in southern Germany to Bolzano in northern Italy. Pollution is also brought by the weather systems that determine the country's climate. Atlantic maritime weather systems carry 76 Church at Gargellan in the province of Vorarlberg Courtesy Embassy of Austria, Washington i pollution into Austria from northwestern Europe. Austria's prox- imity to industrialized regions of former Communist states, with negligible or no pollution control policies or equipment, combined with the influence of continental weather systems, also has proved to be extremely harmful. Mediterranean weather systems trans- mit industrial pollutants from northern Italy. As a result of domestic and foreign pollution, 37 percent of Aus- tria's forests had been damaged by acid rain and/or pollutant emis- sions by 1991. The damage to forests has had dire consequences, including the decimation of forests that for centuries had protected many Alpine communities from avalanches, erosion, mud slides, or flooding caused by runoff. The seriousness of the ecological problems confronting the coun- try gave rise in the 1970s to an environmentalist movement. Po- litical parties were formed, and representatives were elected to parliament (see The Green Parties, ch. 4). A referendum in 1978 closed down a newly completed nuclear power plant and turned the country away from the exploitation of nuclear energy. Public opposition in 1984 stopped the planned construction of a hydro- electric power plant in a wetlands region. The country's long-standing commercial use of the Alps for recreational purposes has also come under examination. Extensive tourism places an inordinate amount of pressure on sensitive Al- pine ecosystems. Ski runs damage forests, as do summer sports 77 Austria: A Country Study such as off-trail mountain hiking or mountain biking. Many Al- pine villages have also grown greatly because of the tourist indus- try. In extreme cases, they have up to twenty hotel beds for each inhabitant, a ratio that places a disproportionate seasonal burden on communal infrastructures and the environment. For these rea- sons, efforts have been made to introduce "green" or "soft" forms of tourism that are more compatible with the Alpine environment. Part of the solution to Austria's ecological problems is being sought in stricter environmental legislation at the domestic level. Ultimately, however, pan-European and global cooperation in the realm of pollution and emission control will be necessary to pro- tect the country's environment. Austrian National Identity The absence of an Austrian national identity was one of the problems confronted when Austria became a country in Novem- ber 1918 (see The End of the Habsburg Empire and the Birth of the Austrian Republic, ch. 1). Before 1918 there had been no tra- dition among German- speaking Austrians of striving for national independence as a small German- speaking state separated from Austria- Hungary or separated from Germany. Within the context of the multiethnic and multilinguistic empire, the great majority of the inhabitants of what was to become Austria considered them- selves "Germans" insofar as they spoke German and identified with German culture. Strong provincial identities that stemmed from the provinces' histories as distinct political and administrative entities with their own traditions existed for this reason. Tiroleans, for example, iden- tified more with their province than with the new nation-state. As a result, the idea of an "Austrian nation" as a cultural and politi- cal entity greater than the sum total of provinces, yet smaller than the pan-German idea of the unification of all German speakers into one state, virtually did not exist in 1918. The Austrian historian Friedrich Heer described the confusion surrounding Austrians' national identity in the following manner: "Who were these Aus- trians after 1918? Were they Germans in rump Austria, German - Austrians, Austrian-Germans, Germans in a 'second German state,' or an Austrian nation?" Furthermore, Austrians had serious doubts about the economic and political viability of a small German-speaking state. Two al- ternatives were envisioned for Austria: either membership in a con- federation of the states formed out of Austria-Hungary or unification with Germany as a legitimate expression of Austrian national self- determination. Neither alternative was realized. Efforts to form 78 The Society and Its Environment a "Danube Confederation" failed, and the Allies prohibited Aus- tria's unification with Germany in the treaties signed after World War I. As a compromise between these alternatives, Austria was a "state which no one wanted." After 1918 many Austrians identified themselves as being mem- bers of a "German nation" based on shared linguistic, cultural, and ethnic characteristics. Since unification with Germany was for- bidden, most Austrians regarded their new country as a "second" German state arbitrarily created by the victorious powers. During the troubled interwar period, unification with a democratic Ger- many was seen by many, not only by those on the political right but across the entire political spectrum, as a solution for Austria's many problems. Nazi Germany's annexation (Anschluss) of Austria into the Third Reich in March 1938 proved to be an impetus for the development of Austrian national consciousness (see The Anschluss and World War II, ch. 1). Austrians increasingly focused on the historical and cultural differences between Austrian and German traditions — or the uniqueness and singularity of an "Austrian nation" — and on the idea of an independent Austrian state. It is one of those quirks of history that the experience of being "German" in the Third Reich was instrumental in awakening feelings of Austrian nation- alism for many Austrians, who, by the end of World War II, whole- heartedly endorsed the idea of Austrian independence from Germany. This idea involved rejecting the concept of one "Ger- man linguistic and cultural nation" for the sake of two German- speaking nations: one German and the other Austrian. The reestablishment of Austrian independence in 1945 set the conditions for the development of a new Austrian national identi- ty (see Restored Independence under Allied Occupation, ch. 1). Allied policy, which formulated the reestablishment of an indepen- dent Austrian state as a war objective and distinguished between the treatment of Austrians and Germans and the Allied occupa- tion of Austria from 1945 until 1955 contributed to promoting at- titudes of national cohesiveness and a desire for independence. After the State Treaty of 1955 arranged for the end of the Allied occu- pation and a subsequent proclamation of Austria's permanent neu- trality, Austrians increasingly identified themselves with their country and saw it as a state with traditions and a history distinct from those of Germany. Although a persistent right-wing minority in Austria continued to insist on "Germanness" as being one of the attributes of being Austrian, ever more Austrians came to iden- tify with the Austrian nation in the decades after World War II. 79 Austria: A Country Study Seventy-nine percent did so by 1990, compared with 47 percent in 1966. In this respect, Austria is a "young nation." Demography The demographic history of Austria corresponds to the general changes that have taken place in other industrial nations, but with a number of regional and historical differences. An increasing life expectancy, a declining fertility rate (or a lower birth rate), and a greater concentration of population in urban areas are trends Aus- tria shares with other advanced industrial nations. The cataclys- mic events of World War I and World War II, the substantial population movements — both forced and voluntary — during the interwar period and after World War II, the influx of foreign workers starting in the 1960s, and the opening of Eastern Europe beginning in the late 1980s all affected the size and structure of Austria's population. Demographic Development Between 1900 and 1991, the country's population grew from 6,004,000 to 7,795,800 (see table 2, Appendix). War deaths and birth deficits during each of the world wars and the consequences of the Great Depression profoundly influenced the development of Austria's population. Approximately 190,000 men were killed in action in World War I. Increased mortality among the civilian population as a result of the hardships of war and the immediate postwar period and extremely low birth rates resulted in a popula- tion decrease of 100,000 between the censuses of 1910 and 1923. Postwar immigration of German- speaking and Jewish populations from the successor states of Austria-Hungary to the Republic of Austria and emigration from Austria after the war basically offset each other. Economic and political crises in the first half of the 1930s caused 72,000 Austrians to emigrate to non-European countries. The largest contingent of emigrants, 37,000, were from the province of Burgenland and went primarily to the United States, mainly for economic reasons. After Austria was annexed by Nazi Germany in March 1938, an estimated 130,000 Austrians, the great majority of whom had Jewish origins, emigrated from Austria. More than 65,000 Aus- trian Jews died in the concentration camps and prisons of the Third Reich; 35,000 non-Jewish Austrians shared a similar fate or were executed after trials. An estimated 250,000 Austrians were killed in action during World War II; 25,000 civilians were killed as a result of bombing or military action in Austria. Some of these losses 80 The Society and Its Environment were offset by Nazi population policies that promoted motherhood and large families for racial reasons. After the war, Austria became a destination for ethnic Germans, who fled from or were driven out of their homes in Czechoslova- kia, Romania, and Yugoslavia. Other refugees and "displaced per- sons," who were either uprooted by hostilities or victims of the expulsions sanctioned by the Allies and carried out by East Euro- pean governments immediately after the war, also came to Aus- tria. Between 1945 and 1950, about 400,000 immigrants — ethnic Germans from Eastern Europe and other non-German speaking refugees — settled in Austria and eventually became Austrian citizens. The increase of birth rates in Austria during the 1950s cor- responded with the trends in most other West European countries. Between 1950 and 1992, the infant mortality rate in Austria dropped from over 61.3 per 1,000 live births to 7.5 per 1,000, an indica- tion of improvements Austrian health authorities had made in prenatal and postnatal care. During the 1960s, Austria experienced an unprecedented population growth related to an increase of births over deaths and a large influx of foreign workers. After the mid- 1960s, however, there was a substantial and continuous drop in the fertility and birth rates in Austria, generally referred to as the "pill drop-off." In 1974 this trend was further influenced by the legalization of abortion during the first trimester of pregnancy. Since the mid-1970s, Austria — after Italy and the Federal Republic of Germany (West Germany) — has had the third lowest fertility rate in the world: 1 .44 children per woman in 1990, a rate substantially lower than the replacement rate of 2.09. In the early 1980s, some demographers predicted that the popu- lation of Austria would decline from 7.5 million to its 1965 level of 7.25 million by 2010. This scenario was substantially revised when in the mid-1980s Austria's population experienced a spurt of dramatic growth. Projections in 1990 anticipated a net growth of Austria's population by 500,000 to 8 million by 2010. An in- crease in immigration and the higher fertility rate of foreign work- ers accounted for the greatest part of Austria's net population growth in the early 1990s. Within Austria there are substantial variations in regional pat- terns of population growth among the indigenous population, in contrast to the immigrant or foreign population. After World War II, Austria's eastern provinces — Lower Austria, Vienna, and Burgenland — had lower rates of fertility than the other provinces in the country. Throughout the 1960s and the 1970s, there was a clear "east-west watershed" in population growth. The west had 81 Austria: A Country Study AGE-GROUP 95 and over 90-94 I 85-89 80-84 ( /IALE 5 m FEMALES 75-79 70-74 : mm 65-69 60-64 mm 55-59 50-54 msd 45-49 " - I 40-44 mil ■ ■ ■■ 35-39 ..... .. . - - — 30-34 :! ■ MM 20-24 - ■■■■■ - I 15-19 10-14 MM* 5-9 0-4 Bill I 350 300 250 200 150 100 50 50 100 150 200 250 300 350 POPULATION IN THOUSANDS Source: Based on information from Austria, Osterreichisches Statistisches Zentralamt, Statistisches Handbuch fur die Republik Osterreich, 1991, Vienna, 1991, 24. Figure 6. Population by Age and Gender, 1990 higher rates of fertility, while the east's lower rates of fertility led to a stagnating or declining population (see table 3, Appendix). The economic and social reasons for these patterns of development were complex and included the Soviet occupation of eastern Aus- tria from 1945 to 1955 and the depopulation of regions along the Iron Curtain, the traditionally weak economic infrastructure of predominantly rural areas in eastern and southeastern Austria, and the conservatism and deeply rooted Roman Catholicism of western Austria. In 1970 the average life expectancy was seventy years (sixty for males and seventy- three for females). By 1990 the average life ex- pectancy was almost seventy-six years (seventy-two for males and seventy-nine for females). The increasing life expectancy and the fall 82 The Society and Its Environment in the number of births have meant that Austria's population is aging (see fig. 6; fig. 7). One of the major concerns under these circumstances is the burden placed on the Austrian social security system: to what extent will a constant, or shrinking, labor force be able to maintain an increasing number of pensioners? The overall decline of fertility among Austria's indigenous popu- lation is similar to developments in other advanced industrial na- tions in Europe. The decline is caused by a complex set of factors, including the increased use of contraception and abortion, and the increased employment of women outside the home, and changing values and attitudes toward marriage, family, and childbearing. Immigration Austria's position in Central Europe after World War II — by 1948 about 1,225 kilometers, or 46 percent, of its frontiers were with communist states — and the proclamation of Austrian neutrality in October 1955 made Austria Europe's most important country of east- west transit, transmigration, and the claiming of refugee status. Between 1945 and 1990, approximately 2.6 million people came to Austria as immigrants, transmigrants, or refugees. The great majority of them stayed in Austria only for short periods, and some 550,000 used Austria exclusively as a land of transit. Ap- proximately 1.4 million people were transmigrants who lived in Austria before emigrating to other countries or returning to their countries of origin. About 650,000 people, over half of whom were not ethnic Germans or native German speakers, settled permanently in Austria, the great majority of whom became citizens. Although Austrians traditionally viewed their country as a neu- tral land of transit and political asylum, they did not see Austria as a land of immigration like the United States, Canada, or Aus- tralia. This perception, however, does not correspond to the fact that more than 10 percent of the country's citizens in 1990 had not been born in Austria and that in the early 1990s more than 500,000 legal foreigners, predominantly guest workers, lived in the country. Waves of immigration were caused by political events in neigh- boring countries. After the Hungarian Revolution of 1956, for ex- ample, over 250,000 Hungarians fled to Austria, 180,000 of whom eventually applied for asylum. In August 1968, after the Warsaw Pact invasion of Czechoslovakia ended the "Prague Spring," 162,000 Czechs and Slovaks fled to Austria. Although the majority of them eventually returned to Czechoslovakia, 12,000 applied for asylum. In Poland the banning of the Solidarity Movement in De- cember 1981 caused between 120,000 and 150,000 Poles to go to 83 Austria: A Country Study AGE-GROUP 95 and over 1 90-94 | i 85-89 s 80-84 MALE S i FEM ALES 75-79 70-74 — _J 65-69 60-64 55-59 — 50-54 — — ____ 45-49 -— 40-44 — _____ 35-39 , ______ — : 30-34 25-29 20-24 ______ _____ 15-19 10-14 ! 5-9 0-4 350 300 250 200 150 100 50 50 100 150 200 250 300 350 POPULATION IN THOUSANDS Source: Based on information from Austria, Osterreichisches Statistisches Zentralamt, Statistisches Handbuchfiir die Republik Osterreich, 1991, Vienna, 1991, 24. Figure 7. Population by Age and Gender, Projected 2020 Austria, and 33,000 of them applied for asylum. The opening of Hungary's borders during the summer of 1989 breached the Iron Curtain, and 40,000 East Germans used Austria as a land of tran- sit to emigrate to West Germany. In addition to European immigrants, since 1972 Austria has ac- cepted contingents of asylum seekers from a number of countries — Chile, Argentina, Uganda, Iran, and Afghanistan — under the aus- pices of international agreements. Austria was also the main land of transit for 250,000 Jewish emigrants from the Soviet Union beginning in 1976 until the advent of direct Soviet immigration to Israel in 1990. The number of individuals seeking political asylum in Austria rose from fewer than 5,000 in 1982 to more than 27,000 in 1991 . 84 The Society and Its Environment Before the Iron Curtain fell at the end of 1989, the granting of po- litical asylum in Austria to refugees was relatively liberal. Once democratic governments were established in the former communist states of Eastern Europe and borders were opened, however, Aus- tria began to pursue a more restrictive asylum policy. A distinc- tion came to be made between political refugees and so-called economic refugees, who sought more lucrative employment or better living conditions. As a result, the number of those seeking asylum fell to 16,200 in 1992. The number of people seeking to immigrate to Austria had in- creased so greatly by the early 1990s that the nation's army, the Bundesheer (Federal Army), was called in to assist customs and border authorities in patrolling the country's borders. After the fall of communism, these borders were virtually open for a time. By 1992 as many as 100,000 illegal immigrants were in Austria. In addition, for humanitarian reasons, Austria had accepted well over 50,000 refugees from the former Yugoslavia, who had either fled or were expelled from their homes in the course of hostilities that began in 1991. Most of these refugees were Bosnians. The presence of a large number of foreign workers in Austria also affected population trends. The size of this group fluctuated according to the state of the country's economy. From the mid-1960s through the early 1970s, a period of rapid domestic economic growth, Austria's domestic labor force was not large enough to satis- fy the demands of its growing economy, and foreign workers were brought in to meet the labor shortage. Most were unskilled Yu- goslavs and Turks who assumed menial jobs with low salaries. As a result of this influx, the number of foreign workers in Austria increased from fewer than 50,000 in 1965 to some 220,000 in 1974. The recession of the second half of the 1970s and early 1980s had reduced their number to 140,000 by 1984. Periods of growth later in the decade raised it to 264,000 by 1991. Despite these fluctuations, guest workers and their dependents had become a permanent feature of Austria's population and ac- counted for 80 percent of the 550,000 legally registered foreign in- habitants in Austria in 1991. The remaining 20 percent consisted of asylum seekers and refugees who had fled from the conflict in the former Yugoslavia. A shrinking population caused by lower birth rates was Austria's greatest demographic concern in the 1970s and early 1980s. Although the low birth rate among Austria's indigenous German- speaking population continues to be an issue, many Austrians are also concerned about the growing number of foreigners in Austria. To offset the low birth rate, Austria needs a projected net annual 85 Austria: A Country Study growth of approximately 25,000 people per year in order to main- tain population at a stable level. Most of this growth will come from foreigners living in Austria or from immigrants. Emigration In the early 1990s, the number of Austrians living and working abroad — approximately 430,000 — was somewhat lower than the number of foreigners in Austria. Since the 1950s, West Germany had been the most frequent destination, and in 1990 about 181 ,000 Austrians resided there, attracted by prospects of better wages and greater career opportunities. In the same year, 29,000 Austrians lived in Switzerland and 10,000 in Italy. The great majority of the remainder lived outside Europe, predominantly in North Ameri- ca and South America. In contrast to foreign workers in Austria, Austrians working abroad frequently were highly skilled and well educated. Social Minorities The ethnic or national backgrounds of many Austrians reflect the multinational heritage of the Habsburg Empire. During the late nineteenth and early twentieth centuries, a substantial amount of migration occurred within Austria-Hungary to the German- speaking provinces of Austria. Austria's western and Alpine provinces were affected much less by migration because their low levels of industrialization and urbanization offered few employment opportunities. Before 1918 Czech and Jewish migration influenced the composition of Austria's population to the greatest extent, although all the empire's peoples participated in it. The migrants to Austria from other parts of the empire were usually assimilated into German-speaking Austrian society in a generation or two. However, traditional religious prejudices and racist doctrines of the late nineteenth century prevented a full acceptance of Jewish migrants. The post-World War I peace conferences that established the borders of the Republic of Austria created a relatively homogene- ous German-speaking state (95.3 percent of the populace) but left German-speaking minorities in Czechoslovakia and Italy. Although the 3 million German-speaking inhabitants of the borderlands of Bohemia and Moravia had been subjects of the Habsburgs for centuries, their national orientation was German, and it would not be accurate to see them as an Austrian minority outside of Austria. The establishment of the Austrian-Italian frontier at the Bren- ner Pass involved the dismemberment of the province of Tirol and 86 The Society and Its Environment created an Austrian — or, more specifically, German-speaking Tirolean — minority of 200,000 persons in South Tirol that was in- corporated into the Italian region of Trentino-Alto Adige. While Italy was controlled by the Fascists (1922-45), German-speaking South Tiroleans were subjected to Italianization campaigns, and during World War II they were given the "option" of Italianiza- tion or emigration as "settiers" to areas occupied by Nazi Germany. After World War II, a popular movement in South Tirol agi- tated for the region to be incorporated into Austria, but the Allies did not support these aspirations. An agreement in 1947 between Italy and Austria provided South Tiroleans with a special autono- mous status. The realization of this status became a continuing point of contention that sometimes erupted into violence between South Tiroleans and Italians and caused friction between Vienna and Rome. However, in 1992 political representatives of the German-speaking South Tiroleans and the Italian authorities in Rome succeeded in drafting legislation that is likely to satisfy South Tirolean claims for autonomy as an Italian province (see Region- al Issues, ch. 4). Official Minority Groups Within Austria a distinction is made between "official ethnic groups" — Slovenes, Croats, Hungarians, and Czechs and Slovaks — who are legally defined and recognized as minorities, and other social groups, such as Roma and Sinti (commonly known as Gyp- sies), Jews, and foreign workers. These other groups do not have a special legal status as "Austrian ethnic groups" but are de facto minorities. Although Austria was the most homogeneous of the successor states carved out of Austria-Hungary, it had a number of indigenous ethnic and linguistic minorities in the southern and eastern rural borderlands: Slovenes in Carinthia; Croats, Slovaks, and Hungar- ians in Burgenland. An urban minority of Czechs and Slovaks were also concentrated predominantly in Vienna. These groups account- ed for 4.7 percent of Austria's population after World War I. The Croats represented the largest single official minority in Austria. The Croat enclaves in Burgenland were the result of the Habsburgs' wars with the Ottoman Empire in the sixteenth and seventeenth centuries. The Croats fled north to avoid Turkish sub- jugation, and after the Habsburgs defeated the Turks, Croats were settled in Burgenland to compensate for the depopulation the wars had caused. The drafting of the post-World War I frontiers of Burgenland also created Austria's smallest minority. Areas east of the Leitha 87 Austria: A Country Study River historically had been part of the Kingdom of Hungary, although they were predominantly inhabited by German speakers by 1918. Negotiations of the national frontiers between Austria and Hungary led to Burgenland's becoming a province within Austria. Thus, the province's Hungarian population became an Austrian minority. The Slovenes of southern Carinthia, Austria's second largest eth- nic group, were the descendants of the ancient Slavic population that initially inhabited the southern slopes of the Alps and the Drau River Basin. Beginning in the early Middle Ages, these Slavs were displaced by German speakers. After both World War I and World War II, the newly formed state of Yugoslavia had aspirations of incorporating into it the areas of southern Carinthia inhabited by Slovenes. A Yugoslav invasion of Carinthia in 1918 was followed by a plebiscite in the areas in question in 1920 that resolved ter- ritorial claims with a clear vote for Austria. Tensions between the Slovene minority and the German- speaking majority in Carinthia increased during World War II because of Nazi racial policies and the military actions in southern Carinthia of Slovene partisans oper- ating under the directions of Marshal Josip Broz Tito's National Liberation Army. After World War II, neither the Allies nor the Austrian authori- ties were willing to meet renewed Yugoslav demands to redraw the Austrian- Yugoslav border. A partial response to Yugoslav de- mands was Article 8 of the State Treaty of 1955, which granted official minority status to the Slovenes in Carinthia and the Croats in Burgenland. Relations between the Slovenes and the German speakers of Carinthia remained strained in the following decades, more than was the case anywhere else in Austria. One reason for this hostility was the persistence of right-wing and German nation- alist attitudes among sections of the German- speaking population. The Croats and Hungarians of Burgenland and the Slovenes of Carinthia were usually peasant-farmers located in peripheral regions. The Czechs and Slovaks who still spoke their native lan- guages as first languages presented a stark contrast to these groups. This minority descended mainly from migrants who left predomi- nantly rural areas of southern Bohemia, Moravia, and Slovakia in the late nineteenth and early twentieth centuries to settle in in- dustrial centers such as Vienna, Graz, Linz, and Steyr, and in areas in northern Styria. There were so many Czech migrants in Vienna that the imperial capital was said to be the "second largest Czech city" after Prague. In these urban and industrial settings, im- migrants were soon assimilated. Austrian censuses use the criterion "language of everyday com- munication" to determine who belongs to one of the official ethnic 88 Street in Trausdorf an der Wulka in the province of Burgenland Courtesy Embassy of Austria, Washington groups. The Ethnic Groups Law of 1976 sought to protect and pro- mote the distinct identities of officially recognized minorities and arranged for bilingual education in their languages. Despite such measures, however, all of Austria's officially recognized minority groups have declined markedly in size. Between 1910 and 1980, the number of Croats and Hungarians who declared themselves as members of their respective ethnic groups dropped by 50 per- cent, the number of Slovenes by 75 percent, and the number of Czechs and Slovaks by 95 percent (see table 4, Appendix). The decline of indigenous minority groups in Austria stemmed from a variety of causes. Part of the decline resulted from pressure to assimilate to German-speaking Austrian culture before and after World War II, as well as from Nazi racial policies in Aus- tria, which distinguished between "superior" and "inferior" races. Assimilation, however, was also caused by the modernization of Austria after World War II through an increase in economic and social mobility that drew younger generations away from traditional ethnic and linguistic enclaves, life-styles, and identities. Other Minorities Austria contains other minority groups that are not defined as such by law but are perceived as minorities by the general population: 89 Austria: A Country Study Gypsies, Jews, and foreign workers. Gypsies and Jews have been in Austria for centuries, although a sizable number of Jews came to Vienna during the nineteenth century from other parts of the Habsburg Empire. The presence of a large number of foreign work- ers dates from the 1960s. Gypsies Roma and Sinti, or Gypsies as they are generally called, arrived in Austria in the fourteenth century. An eastern, nomadic people, originally from India, they wore colorful clothes, had their own language and customs, and exchanged goods for survival. Men usually either made pots and other brass objects or were musicians, while women told fortunes or sold handmade goods and fruits from their wagons. A Gypsy's life centered on the family and the larger group, with individual achievement playing an insignificant role. Marriage with a non-Gypsy typically meant exclusion by the community. Disap- proval or punishment by the community was a much more seri- ous reprimand to a Gypsy than any legal action by the state. The attitude of Gypsies toward work and saving differed from that of the majority group in that they generally aimed at earning enough to meet "the needs of the day. ' ' When food or money were needed, the Gypsy code permitted as a last resort stealing from wealthier people. Preferring to feel free and unhindered, Gypsies attached littie importance to the accumulation of property, choos- ing instead a life of wandering and bartering. Only later during their time in Austria did they build semipermanent dwellings. Even so, Gypsies preferred to live among themselves on the outskirts of towns and cities. Because of these habits and attitudes, Gypsies were mistrusted by the Austrian population. Gypsies were seen as lazy, disorderly, and dirty, and regarded as thieves, criminals, and prostitutes. In the eighteenth century, laws were enacted that banned their migrant way of life and established "colonies" for them. By the late 1930s, an estimated 11,000 Gypsies lived in Aus- tria, predominantly in the province of Burgenland. Because of Nazi racial doctrines, more than half of them were deported to concen- tration camps during World War II. By the war's end, only an estimated 4,500 Austrian Gypsies survived. At the beginning of the 1990s, as many as 40,000 Gypsies lived in Austria, mostly centered in the provinces of Vienna and Bur- genland. Although they more often speak German than the tradi- tional Romany or Sinti languages, they are by no means assimilated into the larger society. Many Gypsies attend Austrian schools, but 90 The Society and Its Environment their academic performance is below average, and they see schooling as a hindrance to freedom. Young men who have completed ap- prenticeships are described by their employers as hard-working and honest. They generally do not become long-term employees, however, particularly if they are living away from their families. Young women usually work in factories or as kitchen help. Jews Jews have also lived in Austria for centuries, at times enduring hostility and repression. At other times, the Jewish community has flourished and enjoyed a high degree of tolerance. Joseph II (r. 1780-90) lifted restrictions that had barred them from particular trades and education, and despite widespread prejudice against them, Jews achieved positions of eminence in business, the profes- sions, and the arts in the nineteenth and early twentieth centuries. The Jewish community in Austria expanded greatly in the second half of the nineteenth century when Jews from other parts of the empire came to settle there, mostly in Vienna. Most of these so- called Eastern Jews came from the province of Galicia, an area located in southern present-day Poland and in western present-day Ukraine. The province contained about two-thirds of the Habs- burg Empire's Jewish population. After the Anschluss, the Nazis systematically applied their ra- cial policies to the country's Jews. Approximately 100,000 Austri- an Jews managed to emigrate from Austria before World War II began, but more than 65,000 Jews died in concentration camps and prisons of the Third Reich. As a result, Austrian Jewry was virtually annihilated. After World War II, few surviving members of Austria's Jewish community returned to Austria, and Austrian authorities made no concerted official efforts to repatriate them. As of 1990, only a little more than 7,000 Jews were registered with the Jewish Orthodox Religious Community in Vienna. This figure included recent Jewish immigrants from the Soviet Union and Eastern Europe but excluded Jews who did not declare their religious affiliation. Because the only statistical information on the number of Jews in Austria is available on a confessional basis, ac- curate figures on the number of Austrians with Jewish backgrounds are not available. It is generally assumed that this group is larger than the officially registered one. Foreign Workers Foreign workers represent the largest de facto minority in Aus- tria, although they frequently are not perceived as such because they are "foreigners" and "guest workers." Their cultural and 91 Austria: A Country Study linguistic characteristics set them off from the indigenous popula- tion, however, and make them a distinct minority. Present in sub- stantial numbers since the 1960s, foreign workers have become a permanent feature of Austrian society. Initially, many guest workers came to Austria without their fami- lies and eventually returned to their countries of origin after having saved some money. In this respect, they were similar to "seasonal' ' laborers. However, the "rotation" of foreign workers — the return of some to their countries of origin offset by the influx of others to take their jobs — was gradually replaced by the permanent set- tlement of foreign workers and their families. Foreign workers who had the required residence visa and work permit were entitled to reside permanently in Austria; their docu- ments were generally renewed. In addition, once foreigners had worked and lived continuously in the country for ten years, they could apply for Austrian citizenship. (Under other conditions, such as political asylum, the waiting period for application could be reduced to four years.) Between 1970 and 1990, over 133,000 foreigners became naturalized Austrian citizens, the majority of whom were long-term foreign workers. The Employment of Foreigners Law passed in 1991 limited the number of foreign workers who could be employed in Austria to 10 percent of the domestic labor force. The Resident Alien Law of 1993 reduced the number of foreign workers, that is, workers from outside the EU and the European Free Trade Association (EFTA — see Glossary) still further — to 9 percent of the total work force of about 3.5 million. As a result of these laws, approximately 300,000 foreigners can work in Austria. Because many of these workers have dependents, Austrian officials assume foreigners could come to constitute approximately 10 percent of the total population. Citizens from the former Yugoslavia, predominantly Serbs, ac- count for approximately 50 percent of the foreign workers in Aus- tria. Turks are the second largest group, making up approximately 20 percent of the foreign work force, followed by Germans at 5 percent. Poles, Czechs, Slovaks, Hungarians, and Romanians make up between 3.5 and 4.0 percent each. Foreigners usually live in urban and industrial centers, most nota- bly Vienna. Although foreigners accounted for just over 6 percent of the total population in 1990, the foreign population of Vienna increased from 7.4 percent in 1981 to 13.2 percent in 1990. Be- cause of the large number of foreigners living in the capital and the low birth rates of indigenous Austrians, at the beginning of the 1990s one-fourth of the children born in Vienna were foreigners. 92 The Society and Its Environment Despite their essential contribution to the economy and the fact that they are more law-abiding than the indigenous population, foreign workers are generally not held in high esteem. This prejudice is caused by the low pay and social status of their jobs, their lower level of education, and an often limited ability to speak German. Tensions also arise because of their foreign appearance and cus- toms. Some resentment also stems from the social costs their presence entails. For example, the children of these workers are an additional burden for schools, and there are concerns about how well these children are being educated. Determining the national identities of these children is often difficult because they are not familiar with their parents' homeland yet have the status of "foreigners" in Austria. The degree or quality of assimilation into the larger society is the most serious problem presented by long-term foreign workers. It is not known whether they will remain a minority or gradually come to be seen as Austrian. Generally speaking, workers from the former Yugoslavia show a greater facility for integration or will- ingness to assimilate — especially in the second generation — than Turks, whose Islamic beliefs tend to make integration more difficult. Although the arrival of these foreign workers has promoted the upward mobility of Austria's indigenous lower classes by filling the jobs having the lowest pay and social prestige, a new ethnic lower class has been created. The future social mobility and in- tegration of foreign workers will determine to what extent Austria will have an "imported" racial problem in the future. Attitudes Toward Minorities Although Austria had a negligible Jewish population by the early 1990s, anti-Semitism remains a prejudice among some segments of the population. Social scientists disagree about the reliability of surveys taken during the 1980s, but the consensus among specialists is that between 7 and 12 percent of the population of Austria holds consistently anti-Semitic attitudes and can be considered "hard- core" anti-Semites. Around 25 percent of the populace is mildly anti-Semitic, and approximately 60 percent is neutral or philo- Semitic. Surveys also reveal that anti-Semitic sentiments are more pronounced among older Austrians than younger ones, increase as one moves from the left to the right of the political spectrum, and tend to be more pronounced in rural areas. Surveys also reveal that there was a decline of explicitly anti- Semitic sentiments among some sections of the Austrian popula- tion during the 1980s. The decline could derive from the worldwide controversy surrounding the nomination and election of Kurt 93 Austria: A Country Study Waldheim as Austrian president in 1986 and the public discussions of the fiftieth anniversary of the Nazi Anschluss in 1988. Both events caused a critical reevaluation of the role of Austrians in the Third Reich, as well as an open debate about Austrian anti-Semitism. The opening of Eastern Europe beginning in 1989 and increased immigration to Austria were events that also influenced the struc- ture of Austrian attitudes, anxieties, and prejudices. The special status Austria enjoyed as a neutral state between the two power blocs gave Austrians a sense of security that disappeared after 1989. It was replaced by the widespread concern in the early 1990s that Austria would be overwhelmed by foreigners as a result of open borders. For example, a survey in 1992 found that 38 percent of those polled believed that the greatest threat facing Austria was its being overrun by eastern refugees. The weakest social groups in Austria, the elderly and the retired, and low-income groups — who had the impression that they were competing with foreign workers — tended to feel most threatened by the changes that ac- companied Austria's new position in Europe. The role of immigration became a very sensitive political issue because of the erroneous but common perception that legal im- migrants and foreign workers are a burden instead of a demographic and economic benefit. The influx of illegal or "economic refugees" from the former communist states of Eastern Europe exacerbated the situation. An increase in crime stemming from illegal refugees who entered Austria as "tourists" led to increasingly hostile atti- tudes toward all foreigners from Eastern Europe, the Balkan Penin- sula, and Turkey and the propagation of negative stereotypes. The results of a Gallup poll taken in the fall of 1991 showed strong xenophobic sentiments toward Gypsies, Serbs, Turks, Poles, and Romanians that considerably surpassed anti-Semitic attitudes in Austria. The manner in which Austrians learn to cope with im- migration and integration will likely play an important role in domestic politics in the future. Social Structure Austrian society was traditionally stratified and had a low degree of social mobility. As a result, social distinctions were clear. Social relations between aristocrats and commoners, masters and servants, large landowners and peasant-farmers, and employers and em- ployees were hierarchical and well defined, and the use of titles as a reflection of rank or social status was important. Austrians born into specific social groups or classes had few opportunities to improve their social and economic standing and identified them- selves strongly with their inherited social positions, which were 94 The Society and Its Environment reinforced by education (or the lack thereof), attitudes toward religion, and political convictions. At the beginning of the nineteenth century, the three predomi- nant social classes in Austria were aristocrats; "citizens" or bur- ghers in towns and cities, who had special charters of rights and privileges; and peasant-farmers — "free farmers" in western Aus- tria who owned and tilled their own land and peasant-serfs in eastern Austria. Reforms had been introduced during the last decades of the eighteenth century to bring about a greater degree of social equality, but legal equality was not established in the Austrian half of Austria-Hungary until the constitution of 1867 was promulgated. Even at the beginning of the twentieth century, society still con- sisted of a very small upper class composed of an old aristocracy of "blue bloods" and a recently ennobled and new aristocracy of wealth, a small middle and entrepreneurial class (approximately 15 percent), a growing working class (approximately 25 percent), and a class of peasant-farmers (approximately 55 to 60 percent). During the troubled interwar period, a time of political unrest and economic hardship for most Austrians, the country's main social groups remained rigidly segregated and there was a high degree of identification of specific classes with corresponding political ideol- ogies and worldviews. The resulting "Lager," or "camp," men- tality was seen in the embrace of the urban working class of social democracy while the rest of the country became proponents of con- servative Roman Catholic Christian politics or, to a much lesser degree, European-style liberalism (see Political Dynamics, ch. 4). After World War II, however, the structure of Austrian society changed substantially. The white-collar middle class expanded greatly during four decades of unprecedented prosperity. The num- ber of farmers and workers declined as they or their children were able to benefit from the postwar era's social mobility and find bet- ter employment. Many low-status jobs were taken by foreign work- ers from southeastern Europe. An increasingly white-collar service economy reduced the previous social inequalities and blurred tradi- tional class distinctions. Education became the most important ve- hicle of upward social mobility, and a more open education system made it more available than ever before. Attitudinal barriers to social mobility did not disappear to a corresponding extent, how- ever. Coming from an "established" or older family still played an important role in the social position Austrians were able to as- sume in society. The long period of prosperity and social mobility weakened the Lager mentality that had characterized the interwar period. Begin- ning in the 1980s, electoral patterns indicated that the traditional 95 Austria: A Country Study political allegiances of specific classes to corresponding political par- ties and ideologies had deteriorated. This relaxation of political ties permitted the formation of new political parties that profited from a growing pool of "floating votes." Family Life In the late nineteenth century, large sections of the Austrian population were effectively excluded from the institutions of mar- riage and family because they lacked the property and income neces- sary to participate in them. In Alpine and rural communities, for example, property ownership was a traditional prerequisite for mar- riage that neither day-laborers nor household servants of landown- ing farmers could meet. Among urban and industrial working classes, poverty was so widespread that it made the establishment of independent households and families difficult. During the course of the twentieth century, however, marriage and family have become increasingly common, especially after World War II, when the "economic miracle" brought prosperity to nearly everyone. For the first time in Austrian history, there was almost uniform access to these basic social institutions. Be- cause of this, the postwar period up through the 1960s represent- ed a "golden age" of the family in Austria. More than 90 percent of the women born between 1935 and 1945 have married — a per- centage higher than any generation before or since. The "two-child family" was considered an ideal. Family Developments after the 1960s Beginning in the 1970s, a number of trends appeared that represented a dramatic change in attitudes toward the ideals of mar- riage and family. There was a sharp drop in the birth rate and a decrease in family size, accompanied by a greater prevalence of people who had never married, people who were divorced, single- parent families, cohabitating couples, and marriages without children. In the early 1990s, fewer Austrian women were bearing chil- dren — an estimated 20 to 30 percent will never have a child — and those who have children are bearing fewer. After the end of the "baby boom" of the early 1960s, the Austrian fertility rate dropped steadily from 2.82 to an all-time low of 1 .44 in 1989 (then increased marginally to 1.50 by 1991). Family size has shrunk correspond- ingly. Marriage without children was twice as common in 1990 (32.9 percent) as in the previous generation, and the number of families having three or more children dropped by more than half (to 10.7 percent). Families having one or two children accounted for roughly one-third and one-fourth of families, respectively, in 96 97 Austria: A Country Study the early 1990s. Large families are most common among farmers, who have a historical and economic tradition of having many chil- dren, and among working-class women having little education. Between 1970 and 1990, the number of single-parent families increased almost five times faster than the traditional two-parent families. In 1990 there were 235,000 single-parent families in Aus- tria, about 15 percent of all families. Nearly 90 percent of single parents were women. Some of these single-parent households result- ed from women's conscious choice to bear children without mar- rying. More often, however, divorce was the cause; more than one-half of single parents were divorced. About one-third of the single parents were unmarried, and about one- tenth were widows or widowers. One of the consequences of these trends was that the average size of an Austrian household dropped from 2. 9 in 1971 to 2. 6 per- sons in 1990 and is expected to drop further. Almost 60 percent of the population lived equally divided between one- and two-person households in 1990. A large number of single-person households result from women's long life expectancy, which causes them to outlive their spouses. The frequency of marriage has also declined since the 1960s. Of the women born in the late 1930s, only 8 percent remained sin- gle, compared with an estimated 25 percent of women born in the 1960s. One reason for the rise in the unmarried population is the increasing number of educated women who have professional and economic alternatives to traditional wife-mother roles. Another rea- son for the smaller number of marriages is that cohabitation without marriage has become more frequent and socially acceptable. Austrians are also marrying later. In 1991 the mean age of mar- riage was 25.6 years for women and 28.0 years for men, an in- crease over earlier decades. In 1981 about 59 percent of women and 82 percent of men were single between the ages of twenty and twenty-five, compared with 70 percent and almost 90 percent, respectively, at the end of the decade. For those between twenty- five and thirty years of age, the figures showed a similar rise in the numbers of the unmarried — 33 percent of women and over 50 percent of men were still single at the end of the decade, compared with 25 percent and 40 percent, respectively, in 1981. The declining number of marriages is accompanied by an in- creased frequency of divorce. The divorce rate in Austria increased from 15 percent in the early 1960s to more than 33 percent in the early 1990s. Divorce granted on the basis of "no fault" or mutual consent became legal in Austria in the early 1980s. The divorce rate was highest in Vienna and lowest in Tirol, an indication that 98 The Society and Its Environment traditional and religious values are least binding in urban areas and more persistent in a traditional Alpine setting. Women who are employed outside of the home and have their own sources of income demonstrate a greater readiness to divorce than "traditional wives." More than one-third of all divorces in Austria occur within the first five years of marriage; thereafter, the frequency of divorce decreases with the length of marriage. In a survey in the early 1990s, more than one-half of people polled identified extramarital sex, self- ishness, and inflexibility as the primary causes of divorce. Illegitimacy has also become more frequent. Beginning in the 1960s, the percentage of illegitimate births increased steadily, from 11.5 percent in 1965 to 25 percent in 1991 . For first-born children, the rate was over 33 percent. These figures reflect tolerant atti- tudes toward illegitimacy in many regions in the Alps where illegiti- mate children were a traditional aspect of the Alpine agrarian way of life. Wage-laborers and servants within the households of landowning farmers frequently were unable to marry, but their offspring enjoyed a high degree of social acceptance because illegitimacy was common and provided the landowners with the next generation of laborers. Although the traditional agrarian struc- ture of these regions has changed considerably, the tolerance of illegitimacy remains. In other parts of Austria not having compara- ble traditions, illegitimate birth is not stigmatized to the same ex- tent as it was earlier. More than half of the illegitimate births in Austria are legalized by marriage, and the great majority of second- and third-born children are legitimate. The fact that the social wel- fare system provides more extensive benefits for single mothers than for married ones also can be interpreted as a financial incentive for initial illegitimacy in some cases. These changes in Austrian life- style patterns are viewed by some Austrians with great apprehension, and they interpret the increasing rate of illegitimacy, cohabitating, single-parenting, and divorce and the decreasing birth rate as reflections of a crisis for the traditional religious and social values on which the family is based. However, the diversification of life-styles also can be interpreted as an in- evitable consequence of the modernization of a traditional society, as well as part of the development of a more pluralistic society within which no particular life-style enjoys a position of predomi- nance. Status of Women A patriarchal family structure based on a traditional gender- specific division of labor characterizes attitudes toward marriage 99 Austria: A Country Study and family. By the early 1990s, however, a greater emphasis on marriage as a partnership had become more common among the younger generation, especially among the urban middle class. A 1976 law establishes the principle of equal rights and duties for mar- ried men and women, as well as equal rights and responsibilities for caring for children. The Equal Treatment Law of 1979 makes various forms of dis- crimination against women illegal. Amended a number of times since it was first passed, the law seeks to establish equal rights for women, especially in the workplace. It posits, for example, the prin- ciple of equal pay for equal qualifications and sets up commissions for the arbitration of complaints and violations related to pay, pro- motion, and sexual discrimination and harassment. The Women's Omnibus Law, which went into effect in 1993, is a further mea- sure to reduce discrimination against women. One of its goals is increasing the employment of women in government agencies in which they make up less than 40 percent of the staff. The law also directs that women who have been denied promotions because of their gender or have suffered sexual harassment receive compen- sation. The Austrian concept of "equal treatment" differs substantially from the United States idea of "equal rights." Austrian legisla- tion not only aims at establishing equality in realms where there is discrimination against women, but it also attempts to provide women with additional benefits related to the inequities inherent in the gender-specific division of labor. Thus, it tries to establish benefits to compensate for "unpaid work" in the household, the dual burden of employment and child-rearing many women bear, and single-parenting. In other words, "equal treatment" involves interpreting equality literally in some spheres and attempting to compensate for the gender-specific inequality of burdens in others. Despite the improvement of the legal position of women in Aus- tria since the mid-1970s, traditional role models prevail. Whether women are employed outside the home or not, many Austrian men consider the great majority of housework and child-rearing tasks to be "women's work." For example, 80 percent of the married women surveyed at the end of the 1980s were solely responsible for laundry, 66 percent for cooking, and 51 percent for cleaning. Almost 20 percent of Austrian men do no household tasks. However, 75 percent of married men assume responsibility for shop- ping and other activities outside the home, a reflection of the divi- sion of labor in the traditional family between work inside and outside the home. 100 The Society and Its Environment Although education is the primary determinant of income in Aus- tria, a person's gender also plays a role. At the end of the 1980s, the average monthly net income for an employed woman was SI 2, 858 (for value of the schilling — see Glossary), or SI 1,1 61 for a blue-collar worker and SI 4, 790 for a white-collar employee. The average monthly net income for an employed man was S19,175, or SI 7,522 for a blue-collar worker and S24,734 for a white-collar employee. The pay differentials between men and women are lowest for those employed as civil servants (8 percent), compared with the private sector, where a range of 20 to 40 percent for blue-collar workers and white-collar employees prevails. Although sex discrimi- nation is responsible for some of the male-female salary differen- tials, men traditionally are better trained than women. More women in the labor force are unskilled workers than are men: 38 percent of women versus 25 percent of men. Additional vocational train- ing is much more common among men than among women: 50 percent for men versus 28 percent for women. Highly educated women are more likely to be employed than those with less education. Around 84 percent of women between the ages of thirty and fifty-five having university degrees are em- ployed, compared with only 53 percent of women who have been in school for only the required nine years. The number of men and women in the labor force who have completed secondary or university educations is approximately the same: 10 and 7 percent, respectively. Nevertheless, equal qualifications among men and women are not a guarantee of equal advancement in professions. For example, at the end of the 1980s only 16 percent of women having university or advanced degrees held leading positions as salaried employees or civil servants. Thus, despite the improve- ment of the legal status of women, the income differential between men and women has not decreased considerably since the early 1980s, and the implementation of equal rights legislation has proved difficult in practice. Religion During the Roman Catholic Counter-Reformation of the six- teenth and seventeenth centuries, the Habsburgs were the lead- ing political representatives of Roman Catholicism in its conflict with the Protestantism of the Protestant Reformation in Central Europe, and ever since then, Austria has been a predominantly Roman Catholic country. Because of its multinational heritage, however, the Habsburg Empire was religiously heterodox and in- cluded the ancestors of many of Austria's contemporary smaller denominational groups. The empire's tradition of religious tolerance 101 Austria: A Country Study derived from the enlightened absolutism of the late eighteenth cen- tury. Religious freedom was later anchored in Austria-Hungary's constitution of 1867. After the eighteenth century, twelve religious communities came to be officially recognized by the state in Aus- tria: Roman Catholic; Protestant (Lutheran and Calvinist); Greek, Serbian, Romanian, Russian, and Bulgarian Orthodox; Jewish; Muslim; Old Catholic; and, more recently, Methodist and Mormon. The presence of other communities within the empire did not prevent the relationship between the Austrian imperial state and the Roman Catholic Church — or the "throne and the altar" — from being particularly close before 1918. Because of this closeness, the representatives of secular ideologies — liberals and socialists — sought to reduce the influence of the Roman Catholic Church in such pub- lic areas as education. A relatively complicated series of treaties (or concordats) between the Republic of Austria and the Vatican defined the role and sta- tus of the Roman Catholic Church. After 1918 the Roman Catholic Church maintained considerable influence in public life. For ex- ample, many members of the church hierarchy explicitiy supported the Christian Social Party (Christiichsoziale Partei — CSP). Mem- bers of the Social Democratic Workers' Party (Sozialdemokratische Arbeiterpartei — SDAP) responded to this partisanship in the inter- war period by being explicitly anticlerical. Some Roman Catholics were committed to a form of "political Catholicism," which was anti-Liberal and anti-SDAP. Because of these sympathies, they sup- ported the authoritarian regime that erected a one-party "Chris- tian Corporatist State" in 1934. After the Anschluss in 1938, the Roman Catholic Church ini- tially pursued a policy of accommodation with the National So- cialist German Workers' Party (National-Sozialistische Deutsche Arbeiterpartei — NSDAP, or Nazi Party), but by 1939 it began to assume an oppositional stance. In the decades after World War II, the Roman Catholic Church abstained from publicly and ac- tively supporting any one political party. An exception to this restraint was the church' s involvement in the controversy surround- ing the legalization of abortion in Austria in the early 1970s. For its part, the Socialist Party of Austria (Sozialistische Partei Oster- reichs — SPO) developed more accommodating attitudes toward the Roman Catholic Church than were common before World War II. According to the 1991 census, a majority of Austrians (77.9 per- cent) belonged to the Roman Catholic Church. This is a decline from the 1971 figure of 87.2 percent. The number of Protestants also declined in the same period. The number of Lutherans, or members of the Augsburg Confession, declined from 5.7 percent 102 The Society and Its Environment in 1971 to 4.8 percent in 1991 according to the census, and Cal- vinists, or members of the Helvetic Confession, declined from 0.3 percent to 0.2 percent in the same years. In 1938 the Jewish population of Austria numbered more than 200,000, most of whom lived in Vienna. After the Anschluss, the community was almost wiped out by emigration and the Holocaust. By 1990 the community amounted to about 7,000 and consisted largely of postwar immigrants instead of Austrian-born Jews. Owing to the influx of foreign workers from Turkey and the former Yugoslavia, the Islamic and Serbian Orthodox communi- ties experienced considerable growth in Austria in the 1970s and the 1980s. However, many of these foreign workers do not offi- cially register with their respective religious organizations, and ac- curate information about the size of these communities is not available . The influence of the Roman Catholic Church, although still for- midable because of its historical position in Austrian society and network of lay organizations, receded in the postwar period. The form of nominal Roman Catholicism many Austrians practice is called "baptismal certificate Catholicism." In other words, most Roman Catholics observe traditional religious holidays, such as Christmas and Easter, and rely on the church to celebrate rites of passage, such as baptisms, confirmations, weddings, and funer- als, but do not participate actively in parish life or follow the teach- ings of the Roman Catholic Church on central issues. This trend can be seen in the low rate of regular church attendance (less than one-third of Catholics) and the high rates of divorce and abortion in the 1980s and early 1990s. Within Austria there are regional patterns of religious convic- tion. Generally, provinces with strong conservative and agricul- tural traditions, such as Tirol and Vorarlberg, followed by Lower Austria and Burgenland, have higher percentages of Roman Catho- lics than the national average, and parish churches still fulfill a so- cial function in many smaller communities. Religious affiliation is lower in urban centers, however, and Vienna has the lowest per- centage of any Austrian province. The decline in the number of Austrians professing religious af- filiation and the increase in the number who have no religious affiliation — 4.3 percent in 1971 and 8.6 percent in 1991 — may be interpreted as an increase in the secularization of Austrian socie- ty. Renouncing church membership and being without religious affiliation was one of the anticlerical, historical traditions of the SPO. In general, Austrians without religious affiliation tend to be associated with the SPO, whereas "active" Catholics tend to be 103 Austria: A Country Study connected to conservative parties and hold conservative political views. The increase in the number of Austrians without religious af- filiation should not be interpreted as an exclusively political gesture, however. Recognized religious organizations in Austria finance themselves by "taxing" their members directly with a so-called church tax, which amounts to approximately 1 percent of their in- come. Austrians who do not actively participate in their religious communities frequentiy officially withdraw from them in order to avoid paying this tax. Education Austria has a free public school system, and nine years of edu- cation are mandatory. Schools offer a series of vocational-technical and university preparatory tracks involving one to three additional years of education beyond the minimum mandatory level (see ta- ble 5, Appendix). The legal basis for primary and secondary edu- cation in Austria is the School Law of 1962. The federal Ministry for Education is responsible for funding and supervising primary and secondary education, which is administered on the provincial level by the authorities of the respective provinces. The country's university system is also free. The General Law for University Education of 1966 and the University Organization Law of 1975 provide the legal framework for tertiary education, and the federal Ministry for Science and Research funds and over- sees education at the university level. Twelve universities and six academies of music and art enjoy a high degree of autonomy and offer a full spectrum of degree programs. Established in 1365, the University of Vienna is Austria's oldest and largest university. Federal legislation plays a prominent role in the education sys- tem, and laws dealing with education effectively have a constitu- tional status because they can be passed or amended only by a two- thirds majority in parliament. For this reason, agreement be- tween the OVP and the SPO is needed to pass or amend legisla- tion relating to education. Private schools that provide primary and secondary education and some teacher training are run mainly by the Roman Catholic Church and account for approximately 10 percent of the 6,800 schools and 120,000 teachers. Roman Catholic schools have a repu- tation for more discipline and rigor than public institutions, and some are considered elite institutions. Because there is no tradi- tion of private university education in Austria, the state has a vir- tual monopoly on higher education. 104 The Society and Its Environment The history of the Austrian education system since World War II may be characterized as an attempt to transform higher educa- tion from a traditional entitlement of the upper social classes to an equal opportunity for all social classes. Before the School Law of 1962, Austria had a "two-track" education system. After four years of compulsory primary education from the ages of six to ten in the elementary school, or Volksschule (pi., Volksschulen), children and their parents had to choose between the compulsory secon- dary level for eleven- to fourteen- year-olds called the middle school, or Hauptschule (pi., Hauptschuleri), or the first four years of an eight- year university preparatory track at higher schools of general edu- cation (Allgemeinbildende Hbhere Schulen — AHS). AHS is an umbrella term used to describe institutions providing different fields of specialization that grant the diploma (Reifeprujung or Matura) needed to enter university. Before the 1962 reform, the great majority of children — more than 90 percent — attended the compulsory Hauptschule, where they were divided according to their performance in elementary school into two groups: an "A group," which was directed toward two- to four-year vocational-technical training schools after graduation from the Hauptschule; and a "B group," which was required to com- plete one additional year of compulsory education before entrance into apprenticeship programs or the work force. The remaining elementary- school graduates — less than 10 percent — enrolled in the AHS at age eleven. Children attending these university-track schools also had to choose a specific course of study. The rigidity of the two-track system required that the most im- portant educational decision in a child's life — with all of the impli- cations it had for the future — be made at the age of ten. The decision depended to a great extent on the parents' background, income, and social status. Children from agricultural backgrounds or of ur- ban working-class parents generally attended the Volkschule and the Hauptschule and then entered the work force. Children having lower- middle-class backgrounds frequently received vocational-technical training after the Hauptschule, while children from the upper-middle and upper classes, boys in particular, attended the AHS, which gave them access to university-level education. The early selection process meant that children of the largest seg- ment of the population, farmers and workers, were grossly under- represented at higher schools and universities, whereas the children of a relatively small segment of the population, those who had at- tended higher schools or the universities, were overrepresented. Consequently, the education system tended to reproduce or to 105 Austria: A Country Study reinforce traditional social structures instead of being a vehicle of opportunity or social mobility. The School Law of 1962 and subsequent amendments require that all state-funded schools be open to children regardless of birth, gender, race, status, class, language, or religion. The law also at- tempts to introduce more flexibility into the traditional two-track system and to provide students with a greater degree of latitude within it so that educational (and hence career) decisions can be made at an older age. Although the primary and secondary school system continues to be fundamentally based on the two-track idea, after a series of reforms in the 1970s and 1980s, ten- to fourteen- year-olds are no longer streamed into A and B groups in the Haupt- schule. Graduates of this kind of school also have the opportunity to cross over into certain branches of the AHS track at the age of fourteen or to attend a series of different "higher vocational- technical schools" (Berufsbildende Hdhere Schulen and Hdhere Technische Lehranstalten) , which have five-year programs of specialization (see %. 8). Shifts in enrollment patterns reflect these changes in the school system. In the mid-1960s, less than 10 percent of all students finished the university preparatory AHS track, and more than 66 percent of them were male. By the early 1990s, more than 30 per- cent of all students finished the AHS track and just above 50 per- cent of them were female. Furthermore, a second educational path was developed that permitted some students without a diploma from the university-track AHS to enroll in a university. As a general rule, the quality of Hauptschule education is high, especially in rural areas and small communities where the schools have maintained their traditional social importance and where at- tendance at an AHS involves commuting considerable distances, or, for the inhabitants of more remote areas, boarding. In urban centers with a full spectrum of educational opportunities, the Haupt- schule has become less popular, and parents who earlier would not have enrolled their children in an AHS have begun doing so. The increased enrollments have overburdened the AHS and created a shortage of students at the Hauptschulen and at vocational-technical schools (see table 6, Appendix). In some areas, this trend has been strengthened by the number of children of foreign workers in the compulsory schools. In 1991, for example, almost 30 percent of school-age children in Vienna were the children of foreign workers. In some districts of the city, these children exceeded 70 percent. Although the children of long- term foreign workers frequently speak German well, the numbers of classes in which students with inadequate mastery of German 106 The Society and Its Environment are overrepresented has overburdened the Hauptschule system and made it a less desirable alternative than in the past. Therefore, spe- cial remedial and intercultural programs are being developed so that the compulsory school system in Austria can continue to ful- fill its educational and social roles. The SPO has continued to press for further reforms of the school system. It argued for an abolition of the two-track system for ten- to fourteen-year-olds and for combining the Hauptschule and the first four years of the AHS into a new comprehensive middle school. As of 1993, however, because of the resistance of other political parties, this alternative has been limited to a number of experimen- tal schools. As a result of the reforms since the 1960s, the university system has changed from one serving the elite to one serving the masses. The increasing number of students at Austrian universities reflects the liberalization of educational policy at secondary and higher lev- els. Between the 1955-56 and 1991-92 academic years, the num- ber of students enrolled in institutions of higher education increased from about 19,000 to more than 200,000 (see table 7, Appendix). The number of students beginning university-level education af- ter having completed the AHS program also increased and amount- ed to 85 percent in 1990, compared with 60 percent in the mid- 1960s. The reforms have also meant that university education ceased to be a male privilege. Between the 1960-61 and 1991-92 academic years, the number of female students enrolling in universities rose from 23 to 44 percent. Yet, although women account for almost half of the students at university level, only 2 percent of the profes- sors at institutions of higher learning were women in 1990. Despite the increase in the numbers of university students and the greater presence of women, universities remain primarily the domain of middle- and higher-income groups. The number of stu- dents with working-class backgrounds has doubled from 7 to 14 percent, and the number of these with agricultural backgrounds increased from less than 2 percent to more than 4 percent between 1960 and 1990. But children of white-collar workers, civil servants, and the self-employed accounted for more than 80 percent of enroll- ments at Austrian institutions of higher education in the early 1990s. Increased accessibility to university-level education has a num- ber of consequences. The dramatic expansion in the number of students has led to overcrowding at many institutions. Some crit- ics maintain that the increasing number of students diminishes the overall quality of university-level education despite increases in fed- eral investment. One obvious problem was that more than 50 107 Austria: A Country Study Age TEACHE COLLEC Z PR =r — " Grade Level CO 13 17 •i O — ' 16 _ 11 APPRENTICESHIP AND TEACHER AND 15 _ 10 INTERMEDIATE F VOCATIONAL ACADEMIC : ULL-LENGTH HIGH SCHOOL VOCATIONAL •4 A 14 9 1 If AIIMINU TRAINING 8 O 13 _ 12 7 SECO NDARY M P 1 1 6 EDUC NATION 10 _ c o c 9 _ A 3 PRII MARY I - W 8 EDUCATION o 7 _ 2 1 < 6 Source: Based on information from Austria, Federal Press Service, Austria: Facts and Figures, Vienna, 1990, 119. Figure 8. Structure of the Education System, 1993 108 The Society and Its Environment percent of students enrolled at the universities in the 1980s did not successfully complete a degree program. Complex reasons account for this high drop-out rate. Some students enroll simply to acquire student benefits. Others study for the sake of personal enrichment without intending to get a degree. Some are unable to complete their studies for financial reasons. Although a university degree provides students with a substantial amount of social status and better income opportunities, there has been an increase in "aca- demic unemployment, ' ' especially among degree-holders in the hu- manities and social sciences. Debates about educational policy in Austria frequently are the result of different perspectives related to the strengths and weak- nesses of the traditional education system. Proponents of the two- track secondary system, for example, defend it as performance oriented and criticize the leveling of achievement or lowering of standards the introduction of one compulsory middle school would involve. Conversely, opponents of the two-track system criticize its rigidity and inherent absence of equal opportunity. Consequent- ly, such bipolar terms as performance and leveling, elite and mass edu- cation, and achievement and equal opportunity prevail in educational debates. In some respects, Austrians of different political and educa- tional policy persuasions may expect too many different things from one university system. They expect it to provide general educa- tion, as do state university systems in the United States, and "Ivy League" performance at the same time. Social Security The origins of the contemporary Austrian social security sys- tem date back to the end of the nineteenth century, when rudimen- tary forms of social security were introduced for specific occupational groups. Workers, employees, civil servants, farmers, and the self- employed each paid into a different social security plan. Workers and employees in Vienna, for example, paid into a different social security fund than did civil servants in Vienna or farmers in Tirol. The main thrust in the development of the country's social security system in the twentieth century has been the creation of a unified social insurance policy for all occupational groups. The organization of the social security system is complex. The General Social Insurance Act of 1955, which has been repeatedly amended, sets social security policy and makes decisions on such matters as the level of social security payments and the kind and extent of benefits. However, tax revenues are collected and bene- fits are dispersed by individual insurance agencies or "carriers" for specific occupational groups. In this respect, the social security 109 Austria: A Country Study system is a national plan in terms of federal legislation but is not centrally funded or administered. The extent of social security coverage and the number of benefits increased in Austria steadily from the end of World War II until the early 1980s. As a result, Austria was among the most highly developed welfare states in the world and had a complicated sys- tem of direct taxes on employers and employees and indirect taxes that financed a broad spectrum of benefits. After the early 1980s, social policy entered a phase of consolida- tion characterized by difficulties related to funding extensive so- cial security programs, growing levels of unemployment, stagnating economic growth, increasing budget deficits, and the demograph- ics of an aging population. However, as of 1993, Austria had managed to maintain its high level of social security without major reductions in benefits. Employment, Unemployment, and Pension Benefits As of the early 1990s, the standard work week in Austria was forty hours, although some occupational groups have negotiated a thirty-eight-and-one-half-hour week. Minimum wages and sal- aries are negotiated by trade unions and the representative bodies of employers, and individual professional groups negotiate increases in wages, salaries, or benefits on the basis of collective bargain- ing. Salaries are paid fourteen times a year, and two special pay- ments, usually on June 1 and December 1, are taxed at lower rates than regular salaries. In addition, Austrians are entitled to five weeks of paid vacation annually. All people gainfully employed, employees as well as the self- employed, are subject to compulsory insurance, which includes un- employment, disability, retirement, and provisions for surviving dependents. The right to draw unemployment is contingent on hav- ing worked for at least one year. Unemployment benefits range from 50 to 70 percent of the recipient's previous net pay and are limited to a period of seven months. After this period expires, the unemployed can qualify for a series of different support programs depending on need. As of the early 1990s, the legal retirement age was sixty-five years for men and sixty years for women. However, only 10 percent of men and 50 percent of women actually work until those ages be- cause they may qualify for disability pensions or take advantage of provisions that allow contributors to retire after paying into a pension fund for thirty-five years. Retirement pensions are generally calculated on the basis of the level of income during the last ten years of payment and the overall length of the period of contribution. 110 The Society and Its Environment For example, if a person's "full working life" is forty-five years, he or she receives a pension equivalent to about 80 percent of his or her previous net income, which is adjusted on a regular basis to compensate for subsequent increases in the cost of living. A widow receives 60 percent of her late husband's pension. More than two-thirds of the expenditures for pensions are directly covered by payments of employers and employees into pension funds, and the balance is funded by the federal budget. However, given Austria's liberal early retirement practices and demographic trends, the ratio between the active work force and retired persons in Austria is deteriorating and could reach 1:1 by the year 2020. Because of this trend, experts recognize that a reform of the pen- sion system is inevitable, and the financing of social security benefits, which were introduced under fortuitous conditions of eco- nomic and demographic growth in the 1960s and 1970s, is becom- ing an increasingly pressing issue. A reduction of the level of benefits or the introduction of a "flat-rate" pension, which does not take previous salary and contribution differentials into account, are two possible alternatives. Health and Health Insurance In the late 1980s and early 1990s, the most common causes of death were cardiovascular diseases, followed by cancer. Accidents were the next most common causes of deaths in males. Respiratory diseases and liver problems were also significant causes of deaths (see table 8, Appendix). The traditional Austrian diet is high in fats, carbohydrates, and sugar. Smoking is common — 20 percent of women and 40 percent of men smoke. Most adults regularly consume alcohol, in particu- lar beer and wine. An estimated 250,000 Austrians are alcoholics, and the incidence of alcoholism is twice as high among men as it is among women. As a result of these unhealthy habits, the inci- dences of cardiovascular diseases and cirrhosis of the liver are among the highest in Western Europe. Beginning in the mid-1980s, Austrian health authorities attempt- ed to make the general public more aware of the dangers of cholesterol, smoking, and alcohol. The government introduced a program of preventive check-ups under the auspices of various health insurance plans. As of 1990, however, only negligible in- roads had been made into traditional patterns of consumption, which were more pronounced among men than women and con- tributed to the higher incidence of fatal disease and the lower life expectancy of men in Austria. Ill Austria: A Country Study Austria ranks behind Hungary and Finland as a country with one of the highest suicide rates in Europe. Although some psychol- ogists attribute the high rate to the national psyche — such as an inability to openly carry out conflicts or the tendency to direct ag- gression toward oneself — there is no generally accepted explana- tion for this phenomenon. As elsewhere, men in Austria are almost three times more prone than women to commit suicide. Public health authorities have had to deal with the spread of ac- quired immune deficiency syndrome (AIDS) since 1983, when the first cases were noted. As of mid- 1993, slightly more than 600 Aus- trians had died of AIDS. The number of those infected with the human immunodeficiency virus (HIV) was not known at that time, but estimates range between 8,000 and 14,000. By 1990 state-required health insurance covered 99 percent of the population in Austria. Austrians also are required to pay into compulsory health insurance plans, which are similar to pension plans and are funded by employer and employee groups organized by professions. Foreign workers also are covered by these programs. Active employees and the self-employed, their dependents, the re- tired, and the socially disadvantaged qualify for medical coverage that includes out-patient treatment, medication, some dental work, surgery, and hospitalization in the so-called general class (general wards as opposed to private rooms) . With the exception of minimal flat-rate charges for filling prescriptions and 10 percent of the overall charge for the hospitalization of dependents, out-patient and in- patient treatment is free for individuals covered by the health in- surance plans. Out-patient treatment is almost exclusively handled by physi- cians who have contracts with specific insurance agencies, and pa- tients are free to seek the physician of their choice provided the physician has a contract with the patients' respective insurance agen- cy. Although many physicians are in private practice, the great majority of them rely on these contracts — which regulate fees for services rendered — to generate the income they need to maintain their practices. This arrangement means that Austrian medicine is not "socialized" in the sense that physicians are employees of the state. However, the system is similar to a national health plan insofar as fees are regulated, and there is an exceptionally high degree of coverage for the population at large. A drawback to this system is that because physicians are free to establish their prac- tices wherever they choose, medical coverage is poorer in rural areas than in urban centers. 112 Folk dancers in traditional dress Courtesy Austrian National Tourist Office, New York Family Benefits Austria maintains an extensive support scheme for families. For example, it is illegal for pregnant women to work eight weeks be- fore their due date and eight weeks after their delivery, and they receive their full net pay during this period. Parents of newborns can take two years of maternity or paternity leave or split the leave time between both parents. They receive a monthly support pay- ment of S5,100 (S7,500 for single mothers or low-income couples) during that time. Employers also are required to rehire them in positions of equal pay and status after the leave period is over. Spe- cial payments totaling SI 5, 000 are made for all children between birth and their fourth birthday. In addition, all mothers receive a monthly child-maintenance allowance of SI, 400 for children up to age ten, at which time the allowance is increased to SI, 650 for children up to age twenty-one if the child is living at home, in school, 113 Austria: A Country Study or unemployed. These payments increase to SI ,950 and are made for children up to age twenty- seven if the child is attending voca- tional training or enrolled in a university program. Special provisions exist for single-parent and large low-income families. Single mothers and low-income families having more than two children are most likely to be confronted with severe economic hardship, and benefits for many members of these groups need to be improved to prevent them from slipping below the poverty level. However, the policy of providing higher benefits for unwed mothers is controversial. Because unwed mothers who cohabit with their partners receive the same benefits as single mothers, the higher benefits for single mothers create a financial incentive that can en- courage illegitimacy. Married couples with children are eligible for fewer benefits and view themselves as disadvantaged in compari- son with unwed, cohabiting parents. Housing After World War II, Austria's standard of housing was low, a re- flection of the historically low quality of urban and rural housing, the poor economic development of Austria in the interwar period, and the destruction during World War II. Overcrowding was wide- spread, especially in urban centers and among the working classes, and many living units did not have such modern conveniences as running water, toilets, bathing facilities, or central heating. In 1951, for example, only one-third of the country's living units had run- ning water; less than 31 percent had a toilet on the premises; and only 11 percent had bathing facilities. Stoves using coal, oil, or wood as fuel were the most common forms of heating. Since then, however, Austrian housing has improved consider- ably. The number of living units has increased by 53 percent, although the population grew by just over 10 percent, and almost all of the living units built since 1945 have all modern conveniences. Furthermore, improvements have been made in many of the liv- ing units built before World War II, although there remains a clear gap between the overall standards of old and new buildings. Seri- ously substandard housing — living units with running water, but without toilets or bathing facilities on the premises — has been reduced to less than 10 percent of the total. Most of this housing is found in cities. Low- income groups, such as the elderly, unskilled workers, and foreign workers, are the most frequent inhabitants of substandard housing. As of the early 1990s, just over 55 percent of all Austrians owned their own homes or apartments, either as private individuals or under the auspices of ownership cooperatives. The rate of home 114 The Society and Its Environment ownership is higher in rural areas than in urban areas and higher in western and central Austria than in the east. In urban areas, apartment houses are much more common than single-family dwell- ings. Renting is more common in cities and in eastern Austria. Renters have considerable legal rights that make the termination of leases difficult and that provide for the regulation of rents. The construction and ownership of apartment buildings by the municipal government are common in cities, such as Vienna, which tradi- tionally have social democratic municipal governments. By 1990 almost 10 percent of Austrians had a "second resi- dence," used predominantly for recreational purposes. These sec- ond homes range from garden plots with huts (Schrebergarteri), located on the outskirts of the cities, to old houses in rural communities and newly built one-family houses in the country. At the beginning of the 1990s, around 25 percent of an average Austrian household's expenditures was for housing (mortgage or rent and utilities). Another 25 percent went for food (including al- cohol and tobacco), and a further 16 percent was spent on trans- portation (including automobile payments). About 9 percent was spent on furnishings, 11 percent for clothing, education, or recre- ation, and the remainder for miscellaneous activities. No scholarly work in English treats Austrian society as a whole. John Fitzmaurice's Austrian Politics and Society Today examines the development and roles of Austria's most important sociopolitical organizations. Although they are somewhat dated, a number of chapters from Modern Austria, edited by Kurt Steiner, are good historical and in-depth introductions to various aspects of Austrian society. Specific chapters in Austria: A Study in Modern Achievement, edited by Jim Sweeney and Josef Weidenholzer, offer a less detailed but more current analysis of many facets of Austrian society. Lonnie Johnson's Introducing Austria provides readers with some general insights into the dynamics of the development of Austrian society as a whole. The Austrian government is responsible for a range of informa- tive publications. The Federal Press Service's small hook Austria: Facts and Figures is a good overview of the country's society, econo- my, and politics. The service also publishes a series of brochures in English and German that deal with specific aspects of Austrian society such as immigration, religion, education, and social secu- rity. These publications are available from Austrian embassies, con- sulates, and cultural institutes around the world. The annually 115 Austria: A Country Study revised Survey of the Austrian Economy from the government's Aus- trian Museum for Economic and Social Affairs in Vienna contains some social data. Scholarly publications in German from the Os- terreichisches Statistisches Zentralamt contain much information about Austrian society. Particularly valuable are Sozialstatistische Dat- en and Statistisches Jahrbuch fur die Republik Osterreich, both of which appear on a regular basis. (For further information and complete citations, see Bibliography.) 116 Coat of arms of the province of Carinth THE AUSTRIAN ECONOMY MIGHT best be characterized by the old German phrase klein aber fein, or — in the loose English equivalent — "small but beautiful." Austria is a small European country in terms of gross domestic product, area, and population. Yet, since the end of World War II, it has achieved a remarkable record of growth, even when international conditions have not been at their most favorable. Austria has done this by concentrating on manufacturing the products of the second industrial revolution — such as high-quality machine tools, chemicals, and other producer goods — and exporting them largely to the countries of Western Eu- rope, especially Germany. Austria has achieved considerable autonomy in many important economic areas. It is almost self-sufficient in food production, largely through careful development and husbanding of resources and through an extensive program of subsidies. Judiciously planned exploitation of the hydroelectric power- generating capacity of the Alps has lessened the country's dependence on imported fossil fuels. Austria has also been able to train an efficient and dedicated work force, although it has come to rely on foreign workers for some essential tasks. Austria nonetheless remains fully engaged in the European and global economic environment. It must import fuels — especially oil, coal, and gas — and certain industrial raw materials and as a result has had a consistent trade deficit. But, because the country is one of the most attractive states in Europe to foreign tourists, Austria is generally able to keep its current account in balance. The Austrian government has long recognized that the country and the economy cannot function without trade and without ac- cess to other markets and sources. Therefore, Austria has always wanted to join customs unions and free-trade areas. It was a found- ing member of the European Free Trade Association (EFTA). Be- cause it could not join the European Community (EC), owing to its pledge of political neutrality, it helped form the European Eco- nomic Area, out of the EC and EFTA, in late 1992. In 1989 it had applied to join the EC and is regarded as a prime candidate for admission into the organization, known since late 1993 as the European Union (EU), in 1995. Austria saw many opportunities opening to the East as the Iron Curtain fell and as the former communist economies turned to the West for trade and guidance. As a result, Austria ranks among 119 Austria: A Country Study the top Western nations in opening joint ventures with East Euro- pean states and has made a variety of trade agreements with those states as well as with the states that had declared their indepen- dence from what was Yugoslavia. Some of the links that Austria established and reestablished antedated World War I and thus offer a potential for the re-creation of historical financial and commer- cial links. Since the end of World War II, the Austrian economy has func- tioned in a comfortable niche among the smaller West European states. It has been sheltered from intense international competi- tion because it is only a small market, although the price of many Austrian goods is higher than international prices. The Austrian system of economic and social consensus, characterized by the term social partnership, has functioned effectively to permit a high stan- dard of living for its citizens and especially for its labor force. The chambers of commerce, agriculture, and labor, together with the trade unions, have joined and supported a considerable framework of institutions and regulations that make Austria a model for rela- tions between public and private institutions. Despite its carefully designed and effectively functioning system, the economy has not been immune to external realities. It was se- verely shaken by the "oil shocks" of the 1970s and by the sharp global recession at the beginning of the 1980s. The accumulation of public-sector deficits imposed a heavy burden of debt service on the economy. Austria's recovery from that recession did not fully begin until the mid-1980s, although the recovery advanced smoothly after that and accelerated during the late 1980s before the economy suffered another recession beginning in 1990. With the end of the Cold War and the consolidation of Europe, the economy faces the problems of greater exposure to outside in- fluences and potential outside competition. As this opening occurs, the Austrian economy also must cope with the potential buffeting arising from the EU adoption of the Maastricht Treaty as well as with other pressures resulting from developments since the end- ing of the division of Europe. The Maastricht Treaty's provision for a common European currency could compel West European countries and central banks to pursue more cautious fiscal policies and more restrictive monetary policies than in the past. Although the Austrian government and the central bank have long pursued such restrictive policies in order to keep the country's currency, the schilling, on a par with the German deutsche mark, the pres- sures on other currencies could intensify while the deutsche mark establishes itself as the dominant currency of Europe. This could jeopardize Austrian markets in the EU. 120 The Economy Austria's membership in the EU could also open Austrian mar- kets more directly to the competition of large West European com- panies that not only enjoy economies of scale but also are more able than Austrian companies to withstand the rigors of long-term competition. And, the fall of the Iron Curtain has opened Austria to greater competition from Central and East European states hav- ing lower production costs. Conversely, Austrian exporters also have a wider playing field on which to show their wares. Thus, Austrian planners have both many opportunities and many prob- lems to contemplate as they try to maintain and extend the pros- perity and economic success that their country has enjoyed in the postwar period. Economic Growth and Government Policy Historical Background After World War I and the breakup of Austria-Hungary (also seen as the Austro-Hungarian Empire), Austria faced serious prob- lems of economic and social adjustment in finding a means of liveli- hood for its 6.5 million people, one- third of whom lived in Vienna. Without an adequate agricultural and mineral base in the territory left to it and with the old trading relations of the relatively self- sufficient empire and customs union broken, Austria found itself without adequate food supplies for its population and without suffi- cient coal for its industry. At the same time, its industrial capacity was excessive for the reduced home market. Relief credits grudg- ingly given by the Allies kept the country from complete chaos for a time, but devastating inflation in the early 1920s brought it close to economic collapse. Finally, in 1922, a League of Nations com- mission agreed on a program of international financial support that brought currency stabilization and a balanced budget. Under the austerity program that ensued, considerable progress was made toward economic reconstruction. Because of the austerity, however, it was also a period of high unemployment and political and social unrest (see The First Republic, ch. 1). When the world- wide depression that began in 1929 put an end to this brief period of economic progress, Austria was ripe for the disorders of the 1930s and for the annexation (Anschluss) by Germany in 1938 (see The Anschluss and World War II, ch. 1). This takeover brought an unanticipated measure of economic recovery to Austria as a result of the German buildup of war potential. In order to serve Nazi goals of conquest, most of the existing Austrian industries were expanded and modernized, and several new industrial complexes were established. 121 Austria: A Country Study Austria emerged from World War II with its economy shattered. The loss of life and the damage to industry and transportation had decreased production to only one- third of its prewar level. Reestab- lishment of the economy was both hampered and helped by the division of Austria into four Allied occupation zones after the war and by the ensuing ten-year period of foreign occupation. The presence of foreign troops encouraged the Austrian people into a more cooperative attitude toward each other and toward their lead- ers than that which had prevailed in the interwar period. As a result, the uncompromising divisiveness that had dominated Austrian eco- nomic, social, and political life between the wars gave way to a spirit of cooperation that extended well after the occupation ended (see Restored Independence under Allied Occupation, ch. 1). During the occupation, the primary objective of the Soviet Union seemed to have been the exploitation of the Austrian economy. Although the Western Allies had successfully prevented the exac- tion of outright reparations from Austria, they agreed to give the Soviet Union "full and unqualified title" to all German assets in eastern Austria, that is, the part of Austria under Soviet occupa- tion. Soviet leaders put the broadest possible interpretation on the term German assets and dismantled and removed to the Soviet Union much of the movable industrial equipment. Fixed installations were formally confiscated and put into production to serve Soviet in- terests. When the occupation ended with the signing of the State Treaty in May 1955, the Soviet Union had under its control some 450 firms with 50,000 employees — about 10 percent of the Austrian industrial labor force. Under the terms of the treaty, Austria agreed to make reparation payments to the Soviet Union in oil, other goods, and cash to compensate for the return of these Soviet- controlled assets. The payments, which were completed in 1963, totaled S7.1 billion (for value of the schilling — see Glossary). The Western Allies, in contrast, invested considerable effort, money, and material under United States leadership in reconstruct- ing the Austrian economy. The initial effort consisted primarily of relief goods channeled through the United Nations Relief and Rehabilitation Administration (UNRRA). This program, involving over US$300 million from the United States alone, was replaced in 1948 by the European Recovery Program (commonly known as the Marshall Plan). Under the plan, the United States provided US$962 million in aid in the form of consumer goods, raw materials, and capital equipment. The total amount of foreign aid received by Austria between 1945 and early 1955 was US$1.6 billion. The contrasting policies of the Soviet Union in the eastern zone and those of the Western Allies in the rest of Austria had significant 122 123 Austria: A Country Study implications for the future of the Austrian economy. In the first place, most United States aid went for economic reconstruction in the Allied occupation zones, rather than in the Soviet areas, to prevent its suffering the fate of capital assets already in Soviet hands. This meant, in turn, the creation of employment opportunities in western Austria that, together with the more relaxed living condi- tions and political freedoms, stimulated a steady movement of the population westward from Soviet-occupied eastern Austria. Thus, the industrialization of the Austrian hinterland, which had started for military purposes during the Nazi occupation, was further ad- vanced. Finally, the more constructive behavior of the Western Al- lies encouraged cooperation with Austria's coalition government and created an atmosphere of continuing cooperation, virtually guaranteeing a Western orientation for Austria's economic poli- cies after the occupation. Within the limited scope of economic matters left for Austrian determination during the occupation, two major developments car- ried over into the postoccupation period and had significant in- fluence on the future course of the economy. The first was the nationalization of a large segment of Austria's heavy industry. The second was the establishment of a mechanism for coping with in- flationary pressures through joint agreements on wages and prices reached by the representatives of business, agriculture, and labor. The nationalization acts of July 26, 1946, and March 26, 1947, were designed to effect the systematic reconstruction of the basic materials industries after the heavy damages suffered during the war, to channel their output and services toward the reconstruc- tion of other elements of the Austrian economy under impartial government direction, and to maintain some degree of Austrian control over these assets during the occupation. Although the Soviet Union objected to the nationalization laws insofar as they applied to former German properties, the other Allies were able to over- ride Soviet efforts to block these laws. The Soviet Union did pre- vent their application in the Soviet Zone. As a result, about half the enterprises there, including the entire petroleum industry, were kept from Austrian control until after the occupation ended. About seventy industrial enterprises and plants were selected for nationalization. The enterprises and plants included the most im- portant lignite mines, the largest iron and steel works, the nonfer- rous metals mining and smelting works, the most important petroleum extraction and processing installations, a number of firms involved in steel construction and in mechanical engineering, a major chemical concern, and a major shipping company. Outside the manufacturing sector, the three largest credit institutions and 124 The Economy the most important electrical energy installations were also nation- alized. The problem of compensation to the former owners, which had been left undetermined by the original legislation, was covered by laws passed in 1954 and 1959. Under this legislation, compensa- tion was largely covered by issuing federal bonds to the former own- ers. These bonds, together with the small cash sums paid out, amounted to about S515 million. The second economic event of fundamental importance was es- tablishing mechanisms to settle wage-price disputes. The initial wage-price agreements were stimulated by unusual inflationary pressures in 1947, which had increased prices nearly threefold since the end of the war. Possibly with the specter of the inflationary period of the early 1920s in mind, four key interest groups — the chambers of commerce, agriculture, and labor and the Austrian Trade Union Federation (Osterreichischer Gewerkschaftsbund — OGB) — joined forces. They established the Economic Commission, negotiated a schedule of fixed prices for essential goods and ser- vices, and adjusted wages and pensions to that schedule. Although the Economic Commission had no legal standing and compliance was voluntary, the first of these agreements, covering the period from August through October 1947, was sufficiently successful to lead to a series of renewals over the next four years. These agree- ments slowed, but did not stop, the rate of inflation, which aver- aged 35 percent annually until 1951. Additional stabilization measures were necessary that year, including credit restrictions, an increase in the bank rate, and such fiscal measures as cuts in government spending and increases in taxes. Most important, however, these measures were accompanied by voluntary price reductions and a postponement of wage demands arrived at through the wage-price agreement procedure. This brought a degree of price stability, in marked contrast to the inflationary explosion of the comparable period after World War I. At the time of the signing of the State Treaty in May 1955, the economy had largely recovered from the effects World War II . The gross domestic product (GDP— see Glossary), in constant prices, had more than doubled since 1946, the first full year of peace, and was 47 percent above that of 1937, the last full year of Austrian independence. Although industrial facilities in the Soviet Zone that had been returned to Austrian control were in poor condition — particularly the oil fields — most of the industrial structure in the Allied occupation zones had been revived and modernized, largely through the application of Marshall Plan funds. Relative price sta- bility had been achieved, and the 1955 unemployment rate of 125 Austria: A Country Study 5.8 percent, although high by subsequent standards, was at least an improvement over the 1953 rate of 8.8 percent and was tend- ing downward. Finally, Austrian independence arrived at a time of growing European prosperity as the full effects of the Marshall Plan were being felt. Thus, Austria was able to take its place in the economy of Western Europe and to share in the prosperity that characterized the postwar period. Developments During the 1970s and 1980s After a relatively smooth course throughout the 1960s, Austria was deeply affected by several international developments during the early 1970s. Like the Federal Republic of Germany (West Ger- many), it revalued its currency upward by 5 percent, but this proved insufficient in light of the weakness of the United States dollar. In August 1971, when the Bretton Woods system (see Glossary) collapsed and the price of gold was no longer maintained at US$35 per troy ounce, the Austrian government reaffirmed its decision to maintain the stability of the schilling even if it meant a poten- tially deteriorating competitive position with the dollar. Thus, the schilling remained closely linked to the deutsche mark through the interest rate policies of the Nationalbank (the Austrian central bank) . The Austrian economy could not help being affected, however, by the subsequent turmoil in international trade and finance, the "oil shocks," inflation, and the downturn at the end of the 1970s. By 1975 growth had slowed and inflation had risen because of higher fuel prices. Unemployment had begun to increase and would have risen faster if government-owned industries had not made an ef- fort to maintain employment. The current account, which had re- mained in balance for most of the postwar period, deteriorated significantly. In addition, the budget deficit rose. In 1979 and 1980, the Austrian economy began to improve some- what. Growth resumed and unemployment fell. But exports did not rise as hoped, the budget deficit remained high, and the boom was short-lived. Another downturn appeared, to be overcome only at the expense of considerable fiscal stimulus in 1983 and 1984 when the government budget deficit rose from 4 to 5.5 percent of GDP. After several years of high deficits, the cost of servicing the na- tional debt began to serve as a brake on further expansionary fis- cal policies. Although unemployment remained low by the standards of other industrialized states and although the Austrian economy came through the various crises better than most economies, these developments provided little consolation for most Austrians. The only good news was that exports were rising, although the current 126 The Economy account remained negative as the strength of the dollar drove energy import costs sharply upward. It was only in 1985, well after global interest rates had declined from their post- 1980 highs, that the economy began moving for- ward again at an acceptable pace. Even then, growth came more slowly and unevenly than in the 1950s and 1960s, in part because the expense of servicing the accumulated public deficit (which by then had risen to almost one-half of GDP) remained a brake on the economy as a whole. When rapid growth resumed in 1988, it took many observers by surprise. At that point, the rising trend of unemployment experienced since 1981 began to decline, and the volume of investment and exports grew sharply. The New Policies In 1987 the government had decided that the Austrian econo- my needed certain structural reforms if it were to remain competi- tive in Europe and in the world. The new coalition government, formed by the Socialist Party of Austria (Sozialistische Partei Oster- reichs — SPO) and the Austrian People's Party (Osterreichische Volkspartei — OVP), was spurred to take action as a result of two significant factors: the passage by the European Community (EC — see Glossary) of the Single European Act, designed to lead to a much closer economic union of EC member states; and Aus- tria's poor growth rate, which lagged behind that of the Euro- pean members of the Organisation for Economic Co-operation and Development (OECD — see Glossary). Those reforms were aimed principally at fiscal and financial stability for the govern- ment sector and at greater efficiency for the private sector. The government later reinforced these measures in order to meet the requirements for establishing the European Economic Area (EEA — see Glossary). The measures included steps aimed at reducing the fiscal deficit as a share of GDP. The budget deficit began to be brought down to the target level of 2.5 percent of GDP, although somewhat more slowly than the planners had hoped. The government also an- nounced a comprehensive restructuring of the state-owned Aus- trian Industries, the giant national company that had taken over most of the heavy industry left to Austria by the retreat of the Ger- mans after World War II. The restructuring efforts moved apace for several years after the government decision of 1987. The single most important area from the standpoint of the government was the reduction of the ever- growing federal share of the economy. A series of measures were 127 Austria: A Country Study implemented to cut the federal share of GDP from 23 to 2 1 per- cent and to reduce the provincial and municipal governments' share of GPD from 17.4 to 16.8 percent between 1986 and 1990. One of the principal objects of reducing the size of the federal government was to control the interest burden of the government sector, a burden that had risen rapidly during the early 1980s. Another was to reduce the government sector's gross indebtedness. The first of these measures had little effect because the interest bur- den had risen from 18.0 percent of total government tax revenues to 23.5 percent by 1991. The second measure was more successful because the ratio of the new deficit to GDP stabilized at about 2.5 percent, but the government sector's gross indebtedness nonethe- less continued to rise, reaching the level of 56.5 percent of GDP by 1991. For a government that contemplated joining the EC and the European Monetary Union (EMU — see Glossary), that level was dangerously high. It was almost as high as the limit of 60 per- cent that the EC had set in December 1991 as the maximum level acceptable for states that wished to join the EMU. One reason the government had difficulty managing its own budget was that more than 85 percent of the central government budget expenditures were committed to nondiscretionary items, such as civil service salaries and social security benefits. The govern- ment consistently found itself severely constrained in trying to reduce or even to control the remaining discretionary elements. As for Austrian Industries, some reduction in personnel was ac- complished as part of the reform, but the slump in global steel and chemical markets left considerable uncertainty as to whether more restructuring might not be needed. Privatization also made some headway with the sale of the mint to the Nationalbank in 1 989 and a reduction in the government's share in Austrian Airlines and several major financial institutions. While efforts to amend and strengthen the cartel law to increase domestic competition moved slowly at first, certain steps were taken. Among them was the decision to adapt the public monopoly regu- lation to the standards of the EEA. In November 1991, the last foreign-exchange controls were lifted, thus opening the economy further to foreign competition in financial services and liberaliz- ing cross-border financial transactions. The new Stock Exchange Act of 1989 was designed to increase openness and flexibility. The most difficult objective of structural reform was reducing government subsidies. Some success was achieved between 1987 and 1990, when federal subsidies as a percentage of GDP fell from 2.2 percent to 1.9 percent and when general government subsidies 128 The Economy dropped from 2.9 percent to 2.4 percent. But questions arose as to whether progress of this kind could be continued. Nonetheless, the government was able to enact a major reform in the tax system in 1989. The reform entailed gross tax reduc- tions of about S45 billion. It lowered personal income tax sched- ules, reducing the top rate from 62 to 50 percent and the lower rate from 21 to 10 percent, while widening the tax base. The re- form also abolished the progressive corporate tax schedule and adopted the earlier 30 percent bottom rate as the standard corporate tax rate (compared with the earlier top rate of 55 percent). The tax reform raised incentives and spurred growth. European integration played a central role in the drive toward structural reform of the Austrian economy. The EEA treaty's pro- visions on regulation and liberalization forced far-reaching changes in the form of increased economic opportunities and competition. It also forced the removal of many barriers that had sheltered im- portant sectors from international competition, especially nontariff barriers. Importantly, unit labor costs — which had almost doubled dur- ing the 1970s — held steady throughout much of the 1980s, peak- ing in 1987 when the new reforms were announced. By the end of the 1980s, lower labor costs had improved the competitive posi- tion of Austrian exporters to a level they had not enjoyed for some time. Wages and salaries per unit of output, which had risen steadily from a scale of 100.0 in 1970 to a scale of 205.9 by 1982, rose only gradually to 216.3 in 1987 and then declined to 208.2 in 1990. Austria's economic environment changed dramatically during the late 1980s and early 1990s with the opening of the Iron Cur- tain. Many of the trade agreements that Austria had made with formerly communist states behind the Iron Curtain suddenly be- came null and void, opening new opportunities but also requiring Austrian resources to help invest in those states as well as to offer credit in order to finance exports. In addition, Austria lost some export markets because the German economy registered a sharp decline in the early 1990s as the cost of German unification had to be financed largely by debt and as the German central bank (the Bundesbank) began raising interest rates to reduce the risk of in- flation. The loss of export markets affected Austria adversely, as did the spillover effect of high German interest rates on Austria's own in- terest rates. GDP growth fell from 4.6 percent in 1990 to a level of only 2.0 percent in 1992 and was expected to decline further. Unemployment rose, especially among foreign workers. Although it appears likely that the recession will not be as long as that of 129 Austria: A Country Study the early 1980s, the slump again shows that Austria remains tied to developments in neighboring countries and cannot rely entirely on its own resources and policies in an uncertain global en- vironment. The Magic Pentagon The Austrian government and Austrian economic institutes and analysts have long evaluated the country's economic policies and general economic situation on the basis of five standards, which are termed the magic pentagon: keeping the GDP growth rate as high as possible; maintaining the current account balance as high as pos- sible; keeping employment as high as possible; holding down the inflation rate as much as possible; and keeping the government deficit as low as possible. The objective of government policies is to keep some of these measures as high as possible and some as low as possible. Austrian statistics sometimes show the five differ- ent objectives as five arrows emanating from a central core, with lines connecting the current statistics on each of those arrows so that they form a pentagon. The purpose of government policy is to make the pentagon as large as possible, recognizing that there might at times be some required trade-offs among the different ob- jectives. One of the most important elements in the policy mix is a deter- mination to combat inflation — not an easy task, especially given the significant fiscal deficits during parts of the 1970s and 1980s. To fight inflation and keep the schilling strong and stable, the government relies heavily on attaching the schilling to the deutsche mark and following the policies of the German Bundesbank. These practices, on the whole, have kept inflation at acceptable levels. Low inflation has tended to reduce the demands for higher wages. Consumer price increases held steady around the late 1980s but crept up in the early 1990s to 3.3 percent. Producer prices increased at a slower rate, but wages rose even faster. As a result of the govern- ment's policy, Austria has had one of the lowest inflation rates in Europe, and the schilling has consistently been one of Europe's strongest currencies. The Subsidy Policy Austrian federal subsidies, both direct and indirect, stabilized as a share of GDP during the late 1980s. Direct subsidies were es- timated to average about 0.4 percent of GDP, and indirect subsi- dies were estimated at about 1.3 percent of GDP. The subsidies began changing during the late 1980s from generally defensive sub- sidies intended to preserve traditional industries to more specifically 130 The Liebherr plant at Bischofshofen in the province of Salzburg produces high-quality industrial equipment. The General Motors plant outside Vienna Courtesy Luftreportagen Hausmann, Vienna, and ICD Austria, New York 131 Austria: A Country Study targeted programs such as special subsidies for research and de- velopment, innovation, and environmental protection. The Inno- vation and Technology Fund was established, and in 1989 the government conducted a special review to reduce subsidies to cer- tain traditional industries and to tourism. Agricultural subsidies were well below the EC average during the late 1970s, but they rose during most of the 1980s. By the end of the decade, they had reached a level slightiy above the EC aver- age. In addition, the government subsidized investment and debt service for nationalized industries and covered occasional losses for those industries. To reduce the burden of the nationalized companies on the state budget, the government began a systematic effort to privatize its share in those companies in the late 1980s. Some of the privatiza- tion efforts included the sale of the mint to the partially privately owned Nationalbank. The government's share in Austrian Airlines was reduced to a small majority ownership, and 49 percent of the state electricity company was sold. The federal government's share in the Creditanstalt-Bankverein and the Osterreichische Lander- bank was reduced to 51 percent. In other instances, however, privatization took place through the sale of state assets to other government-owned or government-directed organizations, rather than to the private sector. For this reason, the program did not generate as much income as originally anticipated. The level of regulation and subsidization, combined with the sig- nificant national ownership of major industries, makes production and consumption costs high. On average, consumer prices in Aus- tria are between 10 and 20 percent higher than in European Union (EU — see Glossary) member states. They are even higher than in Germany, which is also noted for its high prices. Direct compari- sons indicate that productivity in Austria is lower than in Germa- ny but that markups for consumer retail sales and profit margins in the distribution system are higher. These figures raise a number of important questions for Austrian economic planners as they prepare for the economic unification of Europe after the collapse of the Soviet Union's satellite system. The competitive pressures against Austrian producers and work- ers will likely increase in a widened EU, especially if states having low costs, such as those of Eastern Europe, are admitted. Foreign Workers in Austria One of the constant factors on the Austrian manufacturing scene since the 1960s has been the employment of foreign workers. Some of them were refugees from Eastern Europe who chose to remain 132 The Economy in Austria and were permitted to do so. Others were from Turkey or farther away. In 1973 the number of foreign workers had reached some 227,000, or about 8.7 percent of the work force. After that, as Austria's own boom began to slow after the first "oil shock" and the global slowdown during the mid-1970s, the Austrian government began reducing the number of foreign workers to pro- tect the positions of Austrian workers. In 1978 the number of for- eign workers had been reduced to about 177,000. In the 1980s, the number had dropped to approximately 140,000 to 150,000, or about 5 to 6 percent of the labor force. As in other West European countries, foreign workers in Austria performed and continue to perform many tasks not wanted by Austrian workers. The number of foreign workers began rising rapidly in 1989, as the borders with Eastern Europe became more porous, and almost doubled by 1990. The number of foreign workers actually peaked during the middle of 1991 at about 280,000, or more than 8 percent of the work force. The Austrian government began tak- ing vigorous border-control and administrative measures in order to prevent further entry of these workers into the labor force. The number began dropping during the last several months of 1991, as it had during the 1970s when the government intervened, but there was no certainty that the government would be as successful during the 1990s as it had been during the 1970s because of the more open borders between Eastern and Western Europe. What was more probable was that the rise in Austrian unemployment during the early 1990s, as a result of the Austrian recession, would reduce the number of foreign workers. The unemployment rate among those workers is higher than among native Austrians. Although certain elements of the Austrian economy, especially hotels and restaurants, cannot function without foreign workers, many Austrians resent the employment of foreigners when many Austrians are without work (see Attitudes Toward Minorities, ch. 2). Principal Economic Interest Groups The major participants in the Austrian economy are represented in national economic policy determination by a number of official and voluntary organizations. The most important of these are the chambers of commerce, agriculture, and labor. These are public corporations legally responsible for the representation of the in- terests of their constituent groups. Because of their legal and offi- cial status, membership in the chambers is compulsory for all enterprises, farmers, and wage and salary earners. There are also specialized chambers in various professional fields and in some 133 Austria: A Country Study provinces for agricultural workers, although these chambers are not as important in the operation of the economy. The chambers function as semipublic bodies with broad respon- sibilities. For example, before the government can present any draft legislation to parliament, the bill must be sent for appraisal by the chambers. The chambers are organized so that they fully represent each of the appropriate professional and other groups involved in their particular sector of the economy. Because of Austria's rela- tively small size, the chambers constitute instruments for contact and exchange of information at every level of the economy. There- fore, they function not only as pressure groups from the outer reaches of the economy toward the center but also as communica- tion belts that relay the decisions from the center to the regions. Several other important voluntary organizations also play signifi- cant roles in economic policy decisions. These include the Austrian Trade Union Federation (Osterreichischer Gewerkschaftsbund — OGB), an umbrella organization representing labor; the works councils that represent labor in enterprises; and the Federation of Austrian Industrialists (Vereinigung Osterreichischer Industri- eller — VOI), representing management. The Chambers of Commerce Originally established under the Habsburg Empire in 1848, the modern chambers of commerce operate under legislation passed in 1946. They serve as the legal representatives of all persons en- gaged in crafts (small-scale production), industry, commerce, finance (banking, credit, and insurance), transportation, and tourism. Each of these six functional activities is handled by a separate section within the nine provincial chambers and in the parent body, the Federal Chamber of Trade and Commerce, com- monly referred to as the Federal Economic Chamber (Bundeswirt- schaftskammer). The most important functions of the chambers arise from their authority to interpret laws and regulations affect- ing the interests of their members and from their right to advise the Nationalrat (National Council) and review draft legislation. The Chambers of Agriculture The chambers of agriculture are the principal bodies represent- ing agricultural interests. There is no federal body comparable to the Federal Economic Chamber, but the Conference of Presi- dents of the Chambers of Agriculture is the de facto represen- tative of the nine provincial chambers in all matters undertaken at the national level. The provincial chambers, in addition to their 134 The Economy representational role, function at the local level to modernize and promote agricultural production. The Chambers of Labor The chambers of labor, which are public corporations, differ from the labor unions, which are private voluntary organizations, prin- cipally in their official character. They were legally established in 1920 to give labor what employers had had since 1848 in the cham- bers of commerce and thereby to provide labor with a representa- tive voice in the preparation of legislation affecting employees' social, economic, vocational, and cultural interests. The principal governmental function of the chambers is to advise on draft legis- lation and administrative regulations directly or indirectly affect- ing labor. Thus, the fields in which they are concerned can include food supply, public health, tariffs and trade, use of leisure time, adult education, employer-employee relations, job safety, social in- surance, and the labor market. Labor, like agriculture, has no chamber at the federal level. The Vienna chamber, however, carries out most of the federal-level func- tions and maintains a general secretariat for the Chamber of Labor Conference (Arbeitskammertag). This body consists of a large staff of experts having advisory roles in economic policy, statistics, law, and consumer protection. The Professions The Regulation of the Professions (Gewerbeordnung) plays as important a role as do the chambers . The term Gewerbe, which can theoretically mean any kind of economic activity except large-scale production and services, is a concept that descended to modern Austria from the medieval system of crafts, guilds, and services. The term has no English equivalent but can best be described as the exercise of a particular profession or economic activity. The Gewerbeordnung is a system of regulations that ensures a profession is exercised in a prescribed manner. The system, which regulates about 220 forms of economic activity, establishes stan- dards covering the following: entry into a profession; operating regulations; methods for limiting price competition; rules govern- ing permissible advertisement; exclusive franchises and licenses; shop-opening and price competition rules; market access controls; capital requirements; and local monopolies. In a variety of instances, the rules also provide for exemption from cartel law regulations (although the cartel law does not prohibit cartels but their abuse). Firms covered by these and similar regulations account for about 40 percent of total value added and investment in Austria and 45 135 Austria: A Country Study percent of total employment. These firms are involved in such mat- ters as professional services, wholesale and retail trade, insurance, banking, capital services, telecommunications, energy, and trans- portation. The effect of the rules is to reduce competition in certain fields and to shelter those already admitted in these fields from excessive access as well as predatory practices by others, especially by larger firms. In a small country such as Austria, with many small vil- lages and communities, the system serves largely to preserve the existing structure of economic activity and the position of local ser- vice providers who were established first in a community. It also protects consumers and others against fraudulent or unqualified service providers. The chambers are the principal instruments that obtain protec- tion or other forms of sheltered operation, largely because the cham- bers participate actively in the political process and are in the best position to make group or sector concerns felt at the national or provincial level. Some of these arrangements, such as sectoral sup- port programs for transportation, mining, cement, or paper, are still in effect, while others, such as those for textiles, clothing, leather, and paper, have been abolished. The Austrian Trade Union Federation Although union membership is not compulsory, about three-fifths of employed persons belong to one of the fifteen major labor un- ions. These fifteen unions constitute the Austrian Trade Union Fed- eration (Osterreichischer Gewerkschaftsbund — OGB). The total membership of the OGB was more than 1 .6 million persons at the end of 1991. The fifteen unions making up the federation represent four major groups: nine unions represent skilled and unskilled workers orga- nized by industry, including farm and forestry workers; four unions represent public employees, including transport and communica- tions workers; one union serves the arts and professions; and another union, the second largest in membership, represents private white- collar salaried employees. Because the latter is the only union not organized on industry lines, all wage earners in an enterprise or- dinarily belong to the same union. The smallest union, the Union of Arts, Journalism, and Professions, had 16,310 registered mem- bers in 1989. In the same year, the largest union, the Union of Commercial, Clerical, and Technical Employees, had 340,348 registered members. 136 The Economy Works Councils In addition to the trade unions, and theoretically separate from them, are the works councils, which exist at the plant level as the elected representatives of all plant employees, whether or not they are union members. According to law, the works councils look af- ter the economic, social, health, and cultural interests of employees. This, in practice, means involvement in matters of discipline, safety, sanitation, dismissal, and transfer, as well as the handling of griev- ances and the implementation of collective bargaining agreements. Works councils in corporations also have a voice in management, electing two members to the corporate board of directors with all the rights and duties of other directors. Although these various bodies representing labor are theoreti- cally separate, they work closely together, not only because of over- lapping interests and responsibilities but also because labor leaders tend to be functionaries of both the unions and the chambers. At higher levels, they are frequently members of parliament as well. At lower levels, the elected members of the works councils in the plants are almost invariably union members and are usually union officials as well. Despite an apparent superfluity of bodies representing the in- terests of labor, the division of primary responsibilities between them is fairly clear. The chambers represent a worker's interest on the economic policy level, the works councils are concerned with a worker's everyday interest at the plant level, and the unions serve primarily as collective bargaining agents. In this function, a specific union usually conducts the actual negotiations, and the OGB has the ultimate power of approval and reserves for itself the negotiat- ing authority for agreements that pertain to all employed persons. The Federation of Austrian Industrialists The principal private- sector organization is the Federation of Aus- trian Industrialists (Vereinigung Osterreichischer Industrieller — VOI), founded in 1941. In the late 1980s, its membership consist- ed of about 2,400 firms employing about 420,000 persons. Although the VOI does not have the legal status of the Federal Economic Chamber, it occupies one of that chamber's two seats on the So- cial and Economic Affairs Committee of the Parity Commission for Prices and Wages (commonly known as the Parity Commis- sion). Because the VOI represents the interests of most large-scale private-sector industry, it essentially controls the industry sector of the Federal Economic Chamber. It also deals directly on behalf 137 Austria: A Country Study of its members with the appropriate ministries and committees of the Nationalrat. Like the chambers, the VOI submits recommen- dations on proposed legislation. It is also active in handling relations between domestic industries and foreign industrial associations. Social Partnership After World War II, the government, as well as industry and the trade unions, realized that the country could not afford to repeat the continuous social, political, and economic conflict that marked the 1920s and 1930s, when the country moved from one crisis to another until Adolf Hitler's Anschluss in 1938. They wanted to avoid ruinous social and industrial conflict, strikes, lockouts, and the kind of persistent social battles that had contributed to the paral- ysis of the Austrian economy and its body politic during the inter- war years. To find a solution, the government and its political and economic institutions reached back to earlier concepts that also had an in- fluence on Austrian thinking and Austrian history. One was the papal encyclical Rerum Novarum of 1 89 1 , which had envisaged a working class that would be gradually absorbed into a property- owning class, not through social conflict but through constructive social cooperation. Another was the Austrian tradition of the Labor Advisory Council (Arbeitsbeirat), which had functioned as a sec- tion of the Ministry for Commerce from 1898 to the outbreak of World War I and which offered a model for the pragmatic partici- pation of the labor movement in the functions of the state and the general direction of the economy. After World War II, these concepts coincided with the practical exigencies of the moment to force representatives of social groups to work together to cope with the combination of unemployment, inflation, and widespread poverty and misery. The OGB and the reestablished business organizations of the three main economic chambers played central roles in working out a series of wage-price agreements between 1947 and 1951. Those agreements, and the negotiations that led to them, were based on a mutual recognition that no social group could benefit if it imposed its demands at the expense of the collapse of the state and its economy — a collapse that often seemed all too near in the immediate postwar years. The social partnership system works on the basis of a mutual recognition of three principles. The first is that the three main eco- nomic groups — industry, agriculture, and labor — will be properly represented through four mutually recognized organizations — the chambers of commerce, agriculture, and labor, and the OGB — that represent their interests and that can take the responsibility 138 The Economy for decisions. The second is that economic decisions can be legiti- mately made outside the ideologically competitive political at- mosphere of parliament, thus in effect depoliticizing crucial matters related to the Austrian standard of living. Third, the principle of consensus will function in such a manner that no social group is ignored, and no social group will prolong the struggle once an agree- ment has been reached. The core consultative instrument of the social partnership is the Parity Commission. The commission consists of seven members of the government — the chancellor, three ministers, and three state secretaries — and two representatives each from the Federal Cham- ber of the Economy, the Presidential Conference of the Austrian Chambers of Agriculture, the Council of the Austrian Chambers of Labor, and the OGB. This distribution of seats on the commis- sion gives the interest organizations a majority. Experts in vari- ous areas attend the meetings in an advisory capacity. The Parity Commission's decisions must be unanimous, because the commis- sion is not based on law, and participation is completely voluntary. The Parity Commission began its work in 1957 on the basis of an exchange of letters between the president of the Federal Cham- ber of the Economy and the president of the OGB . Its original pur- pose was to slow down a troubling wage-price spiral, but it later expanded into much broader discussions on the general trends of the European and Austrian economies and what would be the best response to these trends. The commission has subcommittees on wages and prices. In addition, the commission includes the Advi- sory Committee for Economic and Social Questions, which was established in 1963 to provide the basis for an objective approach to economic policy and to conduct studies required by the Parity Commission. The Parity Commission, however, only deals with the central questions of the economy. It establishes the general principles for solving economic problems and disagreements. Below it, at the in- dustry level, the interest-group associations of the various cham- bers or the trade unions negotiate the separate and legally binding agreements governing employers or employees. The agreements are reached on the basis of the broad principles and criteria set by the Parity Commission. Some forms of social partnership involve little or no participa- tion of government organs. The so-called self-administration as- sociations require the cooperation of interest associations in such structures as social insurance institutions, agricultural boards, labor- market bodies and tribunals, and in other institutions where agree- ments between potentially conflicting interest groups must be 139 Austria: A Country Study reached. Those institutions more often deal with social than with economic questions, but the participants in the negotiations usually evaluate the broad economic situation and the policies agreed on in the Parity Commission as they negotiate. Beyond the mechanics of the Parity Commission and the bitter memories of futile class conflict, however, other elements also work to produce an atmosphere of cooperative consciousness. One of these elements is the virtually universal recognition by all Austri- ans that theirs is a small state and a small economy in a world full of larger and potentially more competitive actors. Austria cannot afford self-indulgence because it would immediately risk its survival. Another cause for cooperation rather than unbridled competi- tion is the large public and foreign ownership of Austrian firms. At the beginning of the 1990s, state-owned firms constituted a to- tal of 32.8 percent of all Austrian companies, and foreign-owned firms constituted an additional 25.1 percent, leaving only about 35 percent in private hands, with an additional 7 percent in scat- tered holdings. The Austrian trade union movement is forced to moderate its demands for wage increases because of the close affiliation between the Austrian schilling and the German deutsche mark. The stabil- ity policy of the German Bundesbank thus also has an effect in Aus- tria. Given this fact, the trade unions cannot usually argue that runaway inflation threatens the standard of living of the Austrian worker. The social partnership has been successful in maintaining a cooperative spirit and in avoiding industrial strife. After World War II, for example, Austria had fewer strike-minutes lost per worker than any major economy. In many years, no strikes have occurred at all. However, there has been debate about whether the social partnership and the work of the Parity Commission and other bodies have impeded progress and if stability could become stagnation. The danger exists that new production and communications sys- tems, as well as progressive organizational structures, will not be introduced quickly and that the social partners will find it convenient to protect established jobs and processes rather than to revise or even revolutionize them. Structure of the Economy Like other industrial societies, Austria found its agricultural and industrial sectors declining as the services sector expanded (see ta- ble 9 , Appendix) . The change in the relative importance of the sec- tors was most pronounced during the 1970s. Changes in the 1980s continued earlier trends. Whereas services and industry had nearly 140 A railroad car manufactured by Jenbacher Werke Courtesy Austrian Federal Economic Chamber, Vienna equal shares of GDP in 1970, by 1990 industry's share was less than half that of services. Agriculture's share has declined steadily, so that by 1990 it was no longer significant economically but still had social importance (see The Agricultural Sector, this ch.). Employment trends have followed shifts in the relative impor- tance of the three sectors (see table 10, Appendix). Agriculture's share of employment fell by more than half between 1970 and 1990. Industry employed about 47 percent of the work force in the late 141 Austria: A Country Study 1960s and 37 percent in the late 1980s. The services sector em- ployed roughly the same portion of the work force as industry in the late 1960s but by the late 1980s employed nearly 60 percent of the work force. Despite the increasingly powerful role played by the services sec- tor, however, most of the major firms remain in industrial produc- tion. Services, like agriculture, are usually performed locally and by medium- or small-sized firms. Thus, a listing of Austria's twenty largest firms in 1991 showed mainly industrial companies, with the exception of such state-owned firms as railroad and postal agen- cies and several large retail organizations. Most Austrian firms are small. An analysis of nonagricultural concerns in 1988 showed that well over half the nonfarm labor force was employed by firms with fewer than 100 employees. About 500,000 Austrians worked in medium-sized firms having between 100 and 499 employees, and only 140 firms had more than 1,000 employees. The largest single enterprise in Austria is Austrian Industries, a holding company created in 1987 to take over and manage the assets that had been nationalized by the Austrian state after World War II. An enterprise of about 75,000 employees, in 1993 it was divided into four branches that respectively managed the steel, met- al, petroleum, and diversified operations of the company. The latter includes mining and the manufacture of various kinds of machinery, as well as other less easily classifiable activities of the holding com- pany. As intended, it has moved vigorously to become a competi- tive enterprise despite its nationalized origins, discarding some unprofitable activities and investing abroad or in Austria in other areas of activity. The ten largest Austrian enterprises in the early 1990s, based on turnover, were Austrian Industries, Osterreichische Post/ Telegrafenverwaltung (national postal service), VOEST- Alpine (steel), Osterreichische Mineral olverwaltung (OMV) (petroleum and other mineral resources), Konsum Osterreich (KO) (retail trade), Osterreichische Bundesbahnen (Austrian Federal Rail- road), Porsche Holding (vehicles), AL Technologies (diversified), Billa (trade), and Austria Tabakwerke (national tobacco monopo- ly). Of these enterprises, three are subsidiaries of Austrian Indus- tries, two are state public- service monopolies, and the remainder are owned either by foreigners or by small share holder-members (such as the retail trade firm KO). None of these businesses ex- cept Austrian Industries has played a significant international role. With the exception of Austrian Industries, even Austria's largest companies are small on an international scale. Only four Austrian 142 The Economy companies were listed in the Financial Times "European 500" for 1992. Two were banks, the Creditanstalt-Bankverein (number 215 on the list) and Bank Austria (275). The third was OMV(288), the mineral and oil exploration and exploitation arm of Austrian Industries. The fourth was a construction company, Wienerberger Baustoffindustrie (318). Austrian Industries was not listed because it is not a private company. If it had been listed, it would proba- bly have been among the top fifty. Austria has never had a great entrepreneur-capitalist tradition. Many firms function within the Austrian market or within regions. In part because of the bitter experiences of inflation and the depres- sion between the world wars, most Austrians do not attempt risky ventures but instead concentrate on geographic areas or on specific products where success is fairly certain. One of the challenges fac- ing Austrian enterprises as they move into the European Economic Area (EEA) and into the European Union (EU) Single Market will be competing effectively against the giant firms that operate throughout Europe and have many more resources than virtually any Austrian firm could hope to command. The Agricultural Sector Although agriculture's share of the economy declined steadily after World War II, agriculture continues to represent an impor- tant element of the economy because of its social and political sig- nificance. The Chamber of Agriculture remains on an equal level with the chambers of commerce and labor, although its members produce only a fraction of the GDP that industrial and commer- cial workers produce. The Government Role In Austria, as in most other Western countries, the government has played an important role in agriculture since the end of War World II. The government has concentrated on mitigating social, regional, economic, and even environmental consequences of the sector's decline, as well as delaying the decline itself. Agricultural policy has been carried out with different objectives and with different laws and policies depending on the times. In the early postwar years, the most important objectives were sur- vival and self-sufficiency. As a poor country, Austria needed to be able to feed itself if its population was to survive. By the 1950s, however, the policy was changing to a more global perspective, while keeping intact the traditional farm economy. The government wanted to protect domestic production, stabilize agricultural markets, protect farmers' incomes, and improve the 143 Austria: A Country Study sector's ability to compete in Austria and abroad. Increasingly, the government began to believe in the importance of maintain- ing rural society as an objective in its own right, for social rea- sons, and to protect the environment and encourage tourism. Because of these aims, agricultural policy, more than any other economic policy, reflects a mixture of economic and noneconomic objectives and concerns. The principal aim, however, is to preserve the existing number of farms as much as possible. Within the structure of the social partnership, various organi- zations work to maintain farm incomes and thus farm existence, among them the Grain Board, the Dairy Board, and the Livestock and Meat Commission. These organizations set basic support prices, taking into account domestic costs and local supply and de- mand, with only weak linkages to world market prices. The boards and commission use a variety of measures to achieve their broad purposes. Among these measures are import restric- tions, such as border controls and entry controls — some of which may be bilaterally negotiated — and variable import duties. If import restrictions are not sufficient to maintain prices be- cause of excess production, the surplus is exported at subsidized prices (with the subsidies usually coming from federal or provin- cial authorities). Authorities also apply production controls, such as sales quotas or limits, on the size and density of livestock hold- ings. Quotas exist for many different products, with the quotas usually fixed on the basis of past production. Price and quality con- trols and limits also exist, especially with respect to different prices for different grades of wheat or milk. The government can also pay direct income supplements, but these payments are generally restricted to certain mountain farming zones and other equally dis- advantaged areas. Subsidies are mainly paid by the federal govern- ment but may in some instances be paid by provincial governments. Because of the complex system of price supports and market access limitations, the exact share of subsidy costs to the govern- ment and to consumers is virtually impossible to calculate. Experts estimate that the total cost to the federal and other governments for agricultural and forestry support during the late 1980s was approximately S16 billion a year, a level that would have been roughly at the same level as that of many other Organisation for Economic Co-operation and Development (OECD) governments but slightly higher than the EC average. The economic research institute Osterreichisches Institut fur Wirtschaftsforschung (WIFO) estimated after a major 1989 study that about 7 1 percent of the cost of agricultural support was borne by consumers in the form of higher prices, with the taxpayers 144 The Economy carrying the remaining 29 percent through such different programs as direct and indirect federal and provincial subsidies or various kinds of market regulation. Austria's decision to enter the EU will have certain effects on its agriculture and forestry. Support prices in Austria are higher than those set under the EU's Common Agricultural Policy (CAP), although the two systems are in many ways similar. Austrian government-borne subsidy costs are at about the same level as those in the EU, but consumer-borne subsidy costs are higher, so that food prices in Austria average about 30 percent higher than those in the EU. Full integration into the EU will thus compel a num- ber of adjustments in Austria. These adjustments may be even more severe if they become effective at the same time that some East European countries with lower production costs enter the EU. Much depends, of course, on any reforms that may take place in the CAP. The Structure of Agriculture Despite the government's efforts to sustain agriculture, by 1991 not one province had as much as 10 percent of the population in- volved in agriculture and forestry. At the beginning of the 1970s, all but two provinces (Vienna and Vorarlberg) had more than 10 percent of their populations involved in farming. This contrasted markedly to the situation in 1934, when all but those same two provinces had more than 30 percent of their populations working in agriculture. Over this period of two generations, the decline in the Austrian farm population was as fast as any in the Western world. Of Austria's total area of almost 84,000 square kilometers, about 67,000 square kilometers are used for farming and forestry. Roughly half of that area is forest, and the remainder is arable land and pasture. Agriculture and forestry accounted for about 280,000 enterprises in 1986, with the average holding being about twenty-three hect- ares. There were about 4,500 corporate farms. Beyond those farms, however, only a third of all farmers were full-time farmers or farm- ing companies. Over half the farming enterprises were smaller than ten hectares; nearly 40 percent were smaller than five hectares. Just as the number of farmers has long been in decline, so also has been the number of farms. Family labor predominates, especially in mountainous areas and on smaller farms. Only a third of all farm and forestry enterprises were classified as full-time occupations in 1986. A full half of these enterprises are spare-time, that is, less than half of household labor is devoted to farming or forestry. The remainder are part-time. 145 Austria: A Country Study Farms up to ten hectares are more often tended by part-time and spare-time farmers rather than by full-time farmers. For most farm owners and workers, nonfarm income is as important as, if not more important than, farm income. Despite the decline in the number of farmers and agriculture's share of GDP since 1960, agricultural output has risen. As of the early 1990s, Austria was self-sufficient in all cereals and milk products as well as in red meat. This gain was achieved because of the considerable gains in agricultural labor productivity. The value of agricultural and forestry output is heavily concen- trated in field crops, meat, and dairy products, with most of it com- ing from animal husbandry. Because large parts of Austria are mountainous, only the lowland areas of eastern Austria and some smaller flat portions of western and northern Austria are suitable for crop production and more intensive forms of animal husband- ry. The remainder of the land is used for forestry and less inten- sive animal husbandry, most of which takes advantage of mountain pasturage. The industrial Sector Industry Industry in Austria is diverse but consists mainly of traditional industries of the second industrial revolution. It is concentrated in various processing industries, each of which has long special- ized in its particular sector and had often gained a global reputa- tion for high standards of production and service. Industry exists throughout the country. Textile production represents the principal industrial activity of the mountainous west, whereas machinery production occurs principally in the east, as does production of glass, electrical goods, and chemicals (see fig. 9). Heavy industry tends to be located around Vienna and in several central river corridors. Iron and steel production is concentrated around Linz and Leoben. Although industrial production is an important component of GDP, most companies are small and privately owned. Almost half employ fewer than five workers. The larger companies are often state-owned, either directly or through Austrian Industries (see Structure of the Economy, this ch.). The metals industries, both production and related manufactur- ing, accounted for 43. 1 percent of industrial value added in 1991 . Chemicals were the second most important segment with 12.6 per- cent, followed by foods and beverages with 11.8 percent; forest products and paper with 11.6 percent; textiles, leather, and clothing 146 The Economy with 7.7 percent; glass, pottery, and quarrying with 5.3 percent; mining with 4.7 percent; and petrochemicals with 3.2 percent. Iron and steel are largely produced by Vereinigte Osterreichische Eisen- und Stahlwerke (United Austrian Iron and Steel Works), commonly known as VOEST- Alpine, one of the major components of Austrian Industries. The company pioneered a worldwide steel production method named the LD process (after the Austrian ci- ties of Linz and Donawitz, where it was developed). Iron and steel production in turn formed the basis for other industries, such as mechanical engineering, machine tools, vehicle production, pow- der metallurgy, factory engineering and construction, and automo- bile components. Chemicals and petrochemicals constitute another major indus- try, producing such items as synthetic textile fibers, pesticides, pharmaceuticals, plastics, and a wide range of fuels. Electrical en- gineering is another important component of Austria's industry and specializes in the production of precision and optical equip- ment and generators. Food also constitutes an important indus- try, ranging from milk produced in the mountains of western Austria to Viennese pastries. Efforts to Improve Competitiveness Like many other countries that had concentrated on industrial production and where industrial value added constituted an im- portant element of national production as well as of national ex- ports, Austria had to reevaluate its performance during the 1980s. The government commissioned a special report on the need for structural adjustment, and a number of steps were taken to make Austria more competitive worldwide. Steps to increase competitiveness include privatization, greater incentives for research, and greater readiness to make decisions about curtailing subsidies where they are not warranted (especial- ly for nationalized industries) and could drain resources from other potentially more competitive industries. Although industrial sub- sidies are harder to calculate than agricultural subsidies because of their greater range (from direct payments to accelerated depreci- ation allowances and the like), the government during the 1980s made special efforts to reduce those subsidies and encourage com- petitiveness. Some of these measures appear to have been at least in part effective, although they were not always carried out as fast as originally planned. Mining and Minerals Austria has unusually diverse mineral resources for a small 147 Austria: A Country Study 148 The Economy country. It is the world's largest producer of magnesite. There are also significant deposits of lignite and iron ore and smaller deposits of wolfram, antimony, gypsum, graphite (lower grade), dolomite, talcum, kaolin, quartz, and salt. Minerals are found throughout the country, but most significant deposits are in Styria or in north- eastern Austria. Mineral production accounted for only about 2 percent of GDP in 1990, having declined steadily in economic importance since World War II. However, it remains a significant source of income and employment in certain mountainous areas and in 1991 con- sisted of 109 firms employing about 6,700 persons. The principal mineral products in 1990 were lignite (2.4 million tons), iron and manganese (2.3 million tons), magnesite (2.0 million tons), gyp- sum (753,000 tons), and kaolin (474,000 tons). Energy Austria is highly dependent on foreign sources for energy. In the early 1990s, it imported more than four-fifths of the petrol- eum and petroleum products it needed, four-fifths of the natural gas, and two-thirds of the coal, coke, and briquettes. About two- thirds of Austria' s electricity is produced domestically from hydro- electric power plants, but most of the remainder is generated from imported fossil fuels. Despite extensive efforts to reduce power con- sumption after the first oil shock of 1973, Austrian reliance on for- eign sources of power rose from 61 percent in 1970 to 70 percent in 1991. Nearly all imported natural gas comes from Eastern Eu- rope, as does most imported coal. Policies adopted during the 1970s and 1980s to conserve energy and to use it more efficiently were to some degree successful. Be- fore 1973, for example, Austria's energy consumption exceeded the growth of its economy. In the 1973-90 period, however, the annual increase in energy consumption averaged only 0.8 percent while economic growth averaged about 2.4 percent a year. Energy policies also aimed at decreasing the country's reliance on oil and coal and at moving more toward renewable and/or clean- er sources. Whereas petroleum, petroleum products, and coal had supplied 73 percent of Austria's energy sources in 1970, by 1990 their share had fallen to 57 percent, while the combined contribu- tion of natural gas and hydroelectric power rose from 23 to 34 percent. Although real consumption of petroleum and petroleum products has declined, Austria still relies heavily on fossil fuels for energy. In 1991, of the energy consumed, 42 percent came from petrole- um and petroleum products, 20 percent from natural gas, and 16 149 Austria: A Country Study percent from coal. Electricity supplied only 13 percent of the coun- try's power, while wood, scrap, and other sources supplied the re- maining 9 percent. Austria has limited domestic reserves of oil and natural gas. Specialists believe that the entire region north of the Alps may be oil bearing. As of the early 1990s, however, proven deposits of oil and gas were found in Lower Austria, between Vienna and the northeastern border, and in Upper Austria between the Enns and Salzach rivers. Proven and probable oil reserves were estimated in 1992 at 15.0 million tons, while certain and probable gas reserves were put at 17.5 billion cubic meters. Certain and probable coal reserves were estimated at 69.9 million tons. The county's largest refinery, at Schwechat near Vienna, is oper- ated by the state-owned OMV and refines all the petroleum produced in Austria, as well as crude petroleum imported via a pipeline from Trieste, Italy. The state firm exploits deposits in eastern Austria, while a subsidiary of Mobil exploits deposits in western Austria. By the early 1990s, Austria obtained two-thirds of its electrical energy from hydroelectric power plants. Nearly all the remainder came from thermal power plants fired with fossil fuel. Total elec- tricity power production in 1991 was 45,000 gigawatt-hours, slightiy less than the amount of electricity consumed. During the 1980s, Austria had consistently been an exporter of electricity. By the early 1990s, about two-thirds of Austria's hydroelectric power capacity had been harnessed. Austrians decided by referendum in 1978 not to generate power from nuclear fuels, although the country's cer- tain and probable uranium reserves were estimated at about 500 tons (see Domestic Issues, ch. 1). The Services Sector Retail Trade In 1991 wholesale and retail trade accounted for about 12 per- cent of GDP and provided employment for 435,000 persons, or 14.5 percent of the work force. Even in the early 1990s, retail trade was dominated by small shops, largely because of the many small towns and communities outside Vienna. In all, there were about 17,000 wholesale concerns throughout Austria and about 33,000 retail concerns. Despite the very large number of small firms in the sector, several retail and wholesale firms are among the twenty largest Austrian companies. Two of these are the grocery store chains Billa and Spar Osterreich. Another is Metro SB-Grosshandel, a wholesaler. 150 View of the Limber g Hydroelectric Power Plant in the province of Upper Austria A Drau River power plant in the province of Carinthia Courtesy Embassy of Austria, Washington Austria: A Country Study The country's largest retailer is the cooperative Konsum Oster- reich (KO), formed in 1978 from a number of smaller cooperative retailers. The company is the latest stage in the Austrian coopera- tive movement that dates from the mid- 1800s. In addition to hav- ing hundreds of stores throughout Austria, some of them quite large and selling many varieties of goods, KO is involved in manufac- turing some of the products it sells. By the late 1980s, the company employed about 20,000 persons, and more than 800,000 families were KO members. They received dividends each year and voted on KO's overall policies. In addition to KO, there are many other cooperatives involved in wholesale trade and in purchasing and marketing. In all, Austrians can shop at more than 1,000 cooper- ative retail stores. Transportation and Telecommunications Austria has a wide variety of transportation services and usage, reflecting the diversity of its geography and its central location in Europe (see fig. 10). Because of the mountainous topography, for decades scheduled nonlocal bus service carried almost twice as many passengers as rail service (288 million riders versus 168 million riders in 1990). Air transport is becoming more commonly used and car- ried 9.1 million passengers in 1992, more than twice as many as in 1982. Because of its central location, Austria is an important segment of the European railroad network, and a number of high- speed international trains pass through the country. The Brenner Pass has long been the main north-south route from Germany to Italy. The country's importance in east- west travel is also likely to increase in the 1990s with the opening of Eastern Europe. In the early 1990s, Austria's total railroad network amounted to approximately 6,028 kilometers, of which 5,388 kilometers were state owned. The standard- gauge (1.435 meter) network is 5,403 kilometers in length, of which 3,051 kilometers are electrified. The number of electric trains increased during the 1980s, from 35,353 in 1980 to 47,803 in 1992. The number of train passengers remained steady during the 1980s, amounting to 170 million in 1980 and 175 million in 1992. The main railroad system is the state-owned and state-operated Osterreichische Bundesbahnen (Austrian Federal Railroad — OBB), which accounts for 90 percent of the country's rail routes. The re- mainder is managed by nineteen small privately owned railroads operating primarily narrow-gauge lines with a total length of about 550 kilometers. The OBB is pursuing an extensive investment in modernization, the Neue Bahn (New Railroad) project. Major projects include the construction of a tunnel under the Alps that 152 The Economy would handle north-south traffic between Germany and Italy and greatly reduce the need to use the Brenner Pass. Freight opera- tions have been steadily modernized, especially with the greater use of pallets and rail-container transport. Austria is part of the European Transfer Express Freight Train System. As of the early 1990s, Austria had about 22,000 kilometers of paved roads. In 1992 there were 3.2 million private automobiles registered, compared with 2.3 million private automobiles in 1982. The increase in the number of trucks in Austria was not as great: 269,000 trucks in 1992, compared with 193,000 in 1982. An increasing volume of freight is transported by truck. One- fourth of Austria's imports and one-half of its exports are carried by road. The growth of freight transported through Austria has increased greatly, going from 4 million tons in 1970 to 20 million tons in 1990. This traffic has begun to pose a threat to the coun- try's natural environment. Government regulations to counter this threat include limiting the size of international trucks traversing the country, most importantly those traveling between Germany and Italy and the Balkans via Alpine passes, especially the Bren- ner Pass. The government, with widespread popular support, is also seeking to have freight shipped on the less noisy and less pol- luting railroad system. Government regulations also limit trucks using Alpine passes at night to 7.5 tons. This ban has been ex- tended to other parts of country. Transit road traffic poses such a great threat to the environment that part of the agreement with the European Economic Area (EEA) provides for separate negotiations with Austria on traffic volume. An agreement reached in 1992 limited the volume of traffic and also provided for rules protecting Alpine areas. Austria's inland waterways total only about 350 kilometers. Of the country's rivers, only the Danube is navigable. Vienna has long been a major port on the Danube River. As of 1991, water trans- port brought in less than 10 percent of the amount of imports and exports transported by road or rail and accounted for only about 5 percent of domestic long-distance freight. Water transport is likely to become more important in the fu- ture, with a related expansion of Vienna's role in river shipping because of the 1992 completion of the Rhine-Main-Danube Canal in Germany. The canal makes possible travel by boat from Rot- terdam to the Black Sea. As a result, Europe's inland waterway traffic is expected to triple by the end of the 1990s. The main traffic will likely be in bulk commodities, some of which might be off- loaded in Vienna and transshipped elsewhere. The Vienna port already serves as a principal petroleum and petroleum products 155 Austria: A Country Study terminal because it is linked by an oil pipeline to Trieste. The port of Vienna is equipped with automobile transshipment facilities and a large grain terminal. Austria has a small national airline. Austrian Airlines is 51 per- cent state owned and operates throughout Europe and the Middle East, as well as across the Atlantic. It also operates an air freight line, Austrian Airtransport. In addition, there are two smaller pri- vately owned air carriers, Lauda Air and Tyrolean Airways. The latter airline operates from Innsbruck and largely ferries passengers to and from Alpine destinations. Austria's one important interna- tional airport is at Schwechat, located near Vienna. Of the smaller airports, Salzburg, Innsbruck, Graz, Klagenfurt, and Linz are the most important and receive international as well as domestic flights. Telecommunications in Austria are excellent. In 1991 there were 3.3 million main telephone connections, or one for every two in- habitants. International facsimile (fax), data transmission, and telex services are also available. In 1992 there were 2.5 million televi- sion sets (black-and-white and color) and 4.7 million radios. The state-owned and state-controlled Austrian Radio and Television (Osterreichischer Rundfunk — ORF) is responsible for all broad- casting. In 1992 there were six AM radio stations, twenty-one FM radio stations, and forty-seven television stations. The country's satellite ground stations are linked with International Telecommu- nications Satellite Organization (Intelsat) Atlantic Ocean and In- dian Ocean satellites and with the European Telecommunications Satellite Organisation (Eutelsat) system. Tourism Tourism is an important part of Austria's services sector. In 1991 foreign tourists accounted for earnings of SI 92. 4 billion, almost offsetting the negative trade balance and deficits in services or other accounts. Tourism is a principal industry and source of foreign exchange. In fact, Austria's per capita tourist revenue is the highest in the world. Foreign overnight stays in Austria have risen consis- tently since World War II, from 50 million in 1950, to 59 million in 1970, and to 95 million in 1990. With 20 million visitors in 1990, Austria was fifth in the world in tourist revenues, surpassed only by the United States, France, Italy, and Spain. Most tourists come from European countries. Almost two-thirds come from Germa- ny, followed by the Netherlands (10 percent) and Britain (5 percent). Austria's largest tourist attraction has long been the Alps — for skiing in the winter and for hiking and camping in the summer. For this reason, the mountainous provinces of Tirol, Carinthia, and Vorarlberg produce the greatest tourist revenues. Salzburg is 156 Vienna International Airport Courtesy Luftreportagen Hausmann, Vienna, and ICD Austria, New York an important tourist attraction in the summer. Vienna remains a tourist center all year but does not generate as much tourist revenue as the mountain areas. Austria has 20,000 hotels and pensions, as well as an additional 50,000 private rooms available to house tourists. In addition, there are thousands of simpler accommodations, such as youth hostels, mountain huts, and campsites. Austria has also made significant progress in becoming an in- ternational conference center. The so-called United Nations City, located outside Vienna, contains the headquarters of a number of major United Nations (UN) organizations. Vienna also has an in- ternational conference center. Taking advantage of Austria's neutral status, Vienna has hosted numerous East- West negotiations and is the permanent seat not only of such long-established organiza- tions as the International Atomic Energy Agency but also of the newer Conference on Security and Cooperation in Europe. The 157 Austria: A Country Study opening of Eastern Europe is likely to make Vienna an even more important center for East- West travel. Money and Banking The Austrian banking system is under the broad direction of the Nationalbank, the Austrian central bank, in coordination with the Austrian government. The bank is centralized, unlike the Unit- ed States Federal Reserve System. It is the bank of issue and en- joys substantial autonomy, while consulting with the Austrian government. Austria's currency, the schilling, is strong and stable. There was an attempt to float it in 1973, when various global currencies floated after the collapse of the Bretton Woods system, but in July 1976 the schilling was formally pegged to West Germany's currency, the deutsche mark. This policy was abandoned in December 1977, but the schilling remained stable in relation to the deutsche mark through management of short-term interest rates and through care- ful efforts to control the Austrian monetary supply. In practice, the policy meant that Austria was an informal member of the Eu- ropean Monetary System (EMS — see Glossary) and its exchange rate mechanism (ERM — see Glossary) since their establishment in 1979, and the country was expected to join the European Mone- tary Union (EMU) under whatever arrangement and timing might finally be agreed. The principal banks are full-service banks, of which there were about fifty-five with approximately 850 branches at the end of 1991 . They transact all kinds of business and also channel credit for all purposes. Many of them function only regionally, but the two larg- est — the Creditanstalt-Bankverein and Bank Austria — operate throughout Austria. The state owns majority shares in both those banks. Bank Austria, the country's largest bank, was created in 1991 by a merger of Osterreichische Landerbank with Zentralsparkasse. This and other mergers could make Austrian banking more com- petitive within the larger European framework. The banking system consists of a number of other kinds of insti- tutions as well. These include the ten provincial mortgage banks (Hypobanken), with 124 branches in 1989; the savings banks (Spar- kassen), of which there were about 126 with 1,278 branches in 1988 that function as regular local banks despite their name; the people's banks (Volksbanken) , of which there were 103 with 323 branches in 1989 that serve small business as commercial credit cooperatives; the agricultural credit cooperatives (Rqffeisenkasseri), of which there were 863 in 1989 with over 1,600 branches; and a small number of private banks and specialized institutions. 158 The Economy The system is locally and regionally based, with savings and credit channeled at the district level; full-service banks serve large com- panies. The post office system, with over 2,000 branch offices throughout Austria, also plays an important role in household sav- ings. Austria has one of the highest savings rates in the OECD, and most of the funds saved are deposited in the banking system. Banks play the central role in the Austrian financial system, es- pecially in corporate finance. They carry out not only regular deposit and lending activities but also such other functions as port- folio management and investment advice. Because most savings are deposited in banks, banks are the principal source of funds for business. Austrian banks tend to maintain close relations with in- dustry, especially with the firms to which they have extended credit. Banks are often represented on supervisory boards or, at the very least, play prominent roles in advising firms with respect to busi- ness and investment decisions. Austrian financial markets reflect this situation. There is an im- portant bond market, largely for government and bank issues and for utilities, about eight times as large as the equity market. The debt-to-equity ratio for corporate financing is high, more like the German model than the British or United States model. In the early 1990s, the Vienna stock exchange was a very limited market, although it will probably become more important as the privatiza- tion of nationalized companies continues. The money market is also dominated by banks. Foreign Economic Relations Foreign Trade and the Balance of Payments Like any small country, Austria depends heavily on foreign trade. Its central location in Europe reinforces that dependency and gives Austria a wide range of trading partners in both Eastern Europe and Western Europe. Austria also consistently seeks to avoid iso- lation and has joined international trading systems to ensure mar- kets for its products and access to the goods it needs. As the economy has evolved and produced a more sophisticated range of products, foreign trade has become more important. For- eign trade made up about one-fourth of GDP in 1955, one-third by 1975, and two-fifths by 1990. Austria's export structure has also evolved. One-half the country's exports were once raw materials, foods, and semifinished goods, but by the early 1990s two-thirds of its exports were finished products. Imports have came to reflect this change and consist mostly of industrial and semifinished goods that require further processing and finishing. 159 Austria: A Country Study The largest category of exports in 1991 was machinery and equip- ment, accounting for almost one-third of all exports. Other major items included chemical products, paper and paper products, trans- portation equipment, metal manufactures, and textiles and clothing. The largest single import item was also machinery and equipment; other items were manufactured products, chemical products, and fuels and energy. Austria's main trading partners are in continental Europe, es- pecially Germany, Italy, and Switzerland (see table 11, Appen- dix). Because of a heavy dependence on imports, Austria usually has a negative trade balance, which is compensated for by positive services accounts and capital accounts (see table 12, Appendix). Income from tourism is especially important in reducing the nega- tive trade balance. The trade balance deteriorated particularly dur- ing the 1970s because of increased oil prices, and Austria had to make special efforts during the 1980s to redress the balance. Austria and European Integration Given its dependence on international trade, Austria has always been interested in some form of customs union. Although it was recognized that there might be some competitive disadvantages in such associations, especially with countries that produced at more competitive prices, the Austrian government and Austrian manufac- turers have always been even more afraid of being excluded. They feared that exclusion would prevent them from reaping any econ- omies of scale and would ultimately consign them to an economic backwater. The government, therefore, was anxious to join in some form of European economic association as several organizations were being shaped after World War II. It could not join the European Community (EC) as it was being formed, however, because of fear that this would violate the 1955 State Treaty prescription for neu- trality. The member states of the EC called their organization the Common Market when they created it in 1958, but they made it clear from the beginning that it had a political as well as an eco- nomic purpose. Under those circumstances, Austria had to hold back as long as Europe was divided by the Cold War. However, such considerations did not prevent Austria from join- ing the European Free Trade Association (EFTA — see Glossary) when it was formed in 1960. EFTA was a purely economic associ- ation, and its members included Finland, Sweden, and Switzer- land, all neutral states that were not members of the North Atlantic Treaty Organization (NATO). Moreover, EFTA had no inten- tion of becoming anything more than a trade association. EFTA 160 The Economy was far from an ideal trading arena for Austria because most of its members were located on the periphery of Europe. EFTA coun- tries came to account for less than 15 percent of Austria's trade, while 66 percent of its foreign trade was with the EC countries. EFTA, however, did have a very important specific advantage from the Austrian standpoint because it did not require common tariffs. Thus, Austria could retain some control over the conditions under which its foreign trade operated, while expanding its close commercial links with a number of EC states (even as it remained formally outside the EC). Austria attempted to obtain associate status in the EC despite the political barrier to full membership. As it became clear in the 1960s that some EFTA members, such as Britain, were beginning to edge toward EC membership, Austria began its own negotia- tions to obtain a special arrangement with the community. In 1972, after ten years of negotiations, Austria and the EC reached an agree- ment providing for a gradual lowering of tariffs to zero. Austria nonetheless remained outside the EC Common Agricultural Policy (CAP). The Austrian government applied to join the EC in the sum- mer of 1989, as the Soviet empire was crumbling and Moscow was no longer either disposed or able to use the neutrality restrictions of the State Treaty to bar Austria from membership. Like other EFTA states, Austrian officials agreed in 1991 to the formation of the European Economic Area (EEA) between EFTA and the EC as a preliminary step, but it also wanted to join the organiza- tion on its own. Although Austria will probably not be able to join the European Union (EU) — as the EC came to be known in November 1993 — until 1995, by which time the Single Market should be well ad- vanced, the government has taken steps to begin adapting the econ- omy to EC standards. Along with adopting many EC laws and regulations through the EEA in 1991 , the government has adopted a number of additional EC rules, including those governing the freedom of capital flows. These measures have been taken to en- sure that the social partners and the economy as a whole would not be at a disadvantage when Austria becomes an EU member. Under the terms of the agreement reached at the EC summit at Maastricht in December 1991, Austria's membership in the EU will also lead to membership in the new European Monetary Union (EMU) if Austria can meet the convergence requirements by 1997. These requirements include a number of features: an in- flation rate within 2.5 percent of the three lowest in the EU; long- term interest rates within 2 percent of the three lowest rates; a 161 Austria: A Country Study government deficit below 3 percent of GDP; and a public-sector debt of less than 60 percent of GDP. As of 1993, Austria was able to meet these requirements, but there is no guarantee that that will be the case in 1997. Austria tied the schilling to the deutsche mark in the 1960s, large- ly because the country could not function without a predictable exchange rate with its largest trading partner, West Germany. In part to reinforce that linkage, Austria joined the EMS and its ERM in 1979. This membership has meant that Austrian interest rates have matched those of the Bundesbank and, as a result, to all in- tents and purposes have been set in Frankfurt. Therefore, Austrian adherence to the EMU would be a logical extension of long- established policies, and Austrian currency would become whatever the EMU adopted, whether it is called the European Currency Unit (ECU) or the Euro-Mark as some have proposed. The link to the deutsche mark has had a major advantage for Austria in that it has given the country a long period of low infla- tion and the kind of monetary stability that those who suffered through the terrible inflation of 1921-23 well appreciate. It is, however, also a disadvantage for Austria's international competi- tive position. Goods denominated in schillings, like goods denomi- nated in deutsche marks, cannot count on any sales increases because of devaluation of the currency. In fact, the schilling has consistently increased in value since the end of the Bretton Woods fixed exchange-rate era in 1971. It has generally moved with the deutsche mark vis-a-vis the United States dollar. Openings Toward the East Austria had maintained close trade relations with various states of Central and Eastern Europe under the Council for Mutual Eco- nomic Assistance (Comecon) arrangements. Those arrangements collapsed at the end of the 1980s and, as of the early 1990s, had not yet been renegotiated. Because of the turmoil in several East European states, for example in the former Yugoslavia, precise trade arrangements will likely require some time to be negotiated. Nonetheless, Austrian firms have proceeded actively to strengthen their position in Eastern Europe. Austrian firms soon were a major part of the thousands of joint-venture agreements established with Hungary, the Czech Republic, and Slovakia. Austrian firms have also become involved in many joint ventures in the former Yugo- slavia, but their fate remains uncertain as long as the region is un- stable. Austrian firms have always been well placed in Slovenia and Croatia, both of which were once part of Austria-Hungary, 162 The Economy and Austria resumed economic links with them as soon as they be- came independent in 1992. Austrian foreign investment, which has always remained closely in balance with foreign investment in Austria, although both had risen over the years, suddenly doubled to SI 1 .4 billion in 1989 and rose to a new high of SI 8. 3 billion in 1990. Much of the new in- vestment was destined for Eastern Europe. One of the hopes of the government is that many companies wanting to expand their operations in Eastern Europe will estab- lish offices in Vienna. The city offers office space with modern fa- cilities, often at modest prices. As of the early 1990s, a number of companies had set up operations there for these reasons. In a broader sense, many of Austria's domestic and international policies will need to be adjusted to take into account developments taking place around Austria. Such concerns have been expressed before, by Austrians and by others, but may be more urgent in the future than in the past. The opening toward Eastern Europe and the creation of the EEA and the Single Market have changed the foundations on which Austria has functioned since the 1950s and will present new competitive challenges for production, mar- keting, and services. As of late 1993, however, there were no indications that Austria had changed its patterns of behavior and operations, largely be- cause they have been successful. The pressures that might provoke such a revision have not risen to the level where change is impera- tive. Moreover, if Austria needs to make changes to adjust to new pressures, many arguments could be made that some form of so- cial partnership or social consensus mechanism may be more neces- sary than ever. As is the case with many small countries, few studies of Austria exist in English, and the economy receives even less attention than other areas. Except for one collection of essays dating back to 1982, The Political Economy of Austria, edited by Sven W. Arndt, nothing comprehensive is available on the economy. Even books in other languages are rare, in part because most German-language books are highly technical. Instead, those who want to read about the Austrian economy must look for economic chapters in general texts about Austria, many of which are unsatisfactory. However, a number of publications exist that contain relatively good information. The most useful are the annual publications of the Organisation for Economic Co-operation and Development that 163 Austria: A Country Study not only contain statistical information but also essays on various basic aspects of the economy. The quarterly and annual surveys published by the Economist Intelligence Unit, Country Report: Aus- tria and Country Profile: Austria, also offer useful statistical informa- tion as well as summary analyses. A number of German-language periodicals are published in Aus- tria, including some published by major banks and some that are published by the Osterreichisches Institut fur Wirtschaftsforschung. These periodicals offer some useful up-to-date analyses as well as complete statistics. Thus, although the Austrian economy does not receive the kind of bibliographic attention that larger economies attract, basic information is available and reliable. (For further in- formation and complete citations, see Bibliography.) 164 Chapter 4. Government and Politics Coat of arms of the province of Upper Austria AUSTRIA'S POLITICAL SYSTEM has been a model of sta- bility since democracy was restored in 1945. In contrast to the interwar period, when domestic political rivalries and foreign intervention brought the system of government set out by the con- stitution of 1920 to a standstill, after World War II this reestab- lished parliamentary democracy functioned smoothly in what came to be termed the Second Republic. For most of the postwar period, Austrian politics appeared unique in many respects to outside observers. Between 1945 and 1966, the country was ruled by the so-called grand coalition of the two major parties, the Austrian People's Party (Osterreichische Volkspartei — OVP) and the Socialist Party of Austria (Sozialistische Partei Osterreichs — SPO). (In 1991 the name of the latter party was changed to the Social Democratic Party of Austria [Sozial- demokratische Partei Osterreichs — SPO].) This arrangement ap- pealed to Austria's politicians and people mainly because it symbolized the reconciliation between social groups that had fought a brief civil war before the absorption (Anschluss) of Austria by Nazi Germany in 1938. The coregency of the OVP and SPO led to the systematic dividing of political offices and civil service posts, known in Austria as Proporz. Also benefiting from this arrangement were key economic and professional organizations that were aligned with the two major parties. At times, Austria's political system seemed impervious to change, but by the middle of the 1980s, it had become clear that far-reaching social and economic trends were beginning to affect the country's politics. The dominance of the OVP and SPO was challenged by the reemergence of the Freedom Party of Austria (Freiheitiiche Par- tei Osterreichs — FPO), led by Jorg Haider, a young right-wing populist who appealed to German nationalist sentiment. After the FPO's short-lived coalition with the SPO between 1983 and 1986, it continued to attract increasing numbers of voters. In the national election of 1990, the FPO won 16.6 percent of the vote, establish- ing itself as a new power in the Nationalrat (National Council), the lower house of parliament. In early 1993, however, some mem- bers of the FPO withdrew from it and formed their own party, The Liberal Forum (Das Liberale Forum), a potential threat to Haid- er's political future. Concern over environmental issues has also affected the Austrian political process, as evidenced by the entry of Green political parties into parliament in 1986. Previous patterns 167 Austria: A Country Study of government, which revolved almost exclusively around reach- ing agreement between the OVP and the SPO, were replaced by a more contentious, freewheeling atmosphere where more voices are heard. While the political process underwent gradual but distinct changes, a variety of scandals during the 1980s brought Austria to the world's attention. The best-known involved Kurt Waldheim, elected presi- dent in 1986. Shortly after his election, a sharp international con- troversy erupted over whether he had been involved in Nazi atrocities in Yugoslavia during World War II. Although a thorough investi- gation found no evidence that Waldheim had participated in any atrocities, his method of handling the affair disappointed many Aus- trians and foreign observers. The strong emotions unleashed inside Austria by this matter showed that the older generation is still reluc- tant to discuss the country's role in the Nazi era. Major changes in Austria's political landscape opened prospects of a new basis for its foreign policy. The bedrock of Austrian diplomacy in the postwar period has been its commitment to per- manent neutrality. In order to achieve the removal of Soviet oc- cupying forces, the Austrian government in 1955 pledged never to join a military alliance or to permit the stationing of foreign troops on its soil. Thereafter, Austria pursued a policy of active neutrali- ty, which included participation in numerous United Nations peacekeeping operations. During the Cold War period, Austria was a consistent advocate of detente between the United States and the Soviet Union. By the late 1980s, a growing number of politicians had concluded that the country should examine closely the question of whether or not to join the European Community. After a prolonged de- bate over the merits of membership, the Austrian government sub- mitted a formal entry application in the summer of 1989. As of late 1993, a substantial number of Austrian citizens still had seri- ous reservations about joining the organization, which as of Novem- ber 1993 came to be known as the European Union. Membership would have to be approved in a popular referendum. Whatever the outcome of the vote, the disintegration of communism in Eastern Europe and the dissolution of the Soviet Union have raised the ques- tion of whether neutrality should — or could — remain the guiding principle of Austrian foreign policy. Constitutional Framework Austria is a parliamentary democracy of the kind that exists in most of Western Europe. The legal basis for the Austrian system of government is the constitution of 1920, which was amended in 168 Austria's parliament meets in this building in Vienna. Courtesy Embassy of Austria, Washington 1929 and several times thereafter. The constitution of 1920 provided a transition from Austria-Hungary (also seen as the Austro- Hungarian Empire) to a democratic federal republic in which the law emanates from the people. The constitution was suspended from 1934 to 1938 during the authoritarian administrations of Engel- bert Dollfuss and Kurt von Schuschnigg and again during the Anschluss that was forced on Austria by Adolf Hitler from 1938 to 1945. Since 1945, when the Second Republic was proclaimed, Austria has been governed by the 1920 constitution as amended. Executive, legislative, and judicial branches of government were established by the 1920 constitution, with the executive branch subordinate to the legislative branch. The federal presidency as es- tablished by the 1920 constitution was a weak political office whose incumbent was elected by a joint session of the bicameral legisla- ture, the Bundesversammlung (Federal Assembly). The constitu- tional amendments of 1929 increased the president's political role by granting him the formal power to appoint or dismiss the chan- cellor and, on the chancellor's recommendation, the cabinet. The 1929 amendments also provided that the right of electing the presi- dent be taken away from the legislature and given to the people. Austria's political system is federal in nature, reflecting the fact that the country consists of nine provinces. Although Article 15 169 Austria: A Country Study of the constitution states that the provinces shall have jurisdiction over all matters not explicitly reserved for the federal government, Austrian federalism is weak and underdeveloped. The areas of law reserved for the provinces are few in number and relatively unim- portant. Among the areas where the federal government is almost exclusively responsible are foreign affairs, national security, justice, finance, civil and criminal law, police matters, and education. In other areas of law, the provinces are called on to pass implement- ing legislation for matters already decided at the federal level. This process, known as indirect federal administration, applies to areas such as elections, highway police, and housing affairs. Other laws are made and administered at the provincial level, but within fed- erally established guidelines. These concern social welfare, land reform, and provincial administration. Areas where the provinces have primary authority include municipal affairs (for example, trash removal and major aspects of zoning), preschool and kindergar- ten, construction laws, fire control, and tourism. The constitution does not include a bill of rights as such, but it does guarantee equality before the law and further guarantees that there shall be no discrimination because of birth, gender, civil status, class, or religion. Individual rights are further defined by inclusion in the constitution of the final article, which raises cer- tain older Austrian laws to the rank of constitutional law. Among them is the Basic Law of December 1867, which establishes equal- ity before the law, inviolability of property, and freedom of assem- bly, expression, and worship. Laws promulgated in 1862 set forth individual rights regarding personal liberty and one's home. These rights include not being held without a warrant and, except in un- usual circumstances, not allowing homes to be searched without a warrant. Some restrictions are placed on freedom of expression and as- sociation. Proper authorities must be informed when a new associ- ation is formed. Officials then have six weeks to object to its formation if the group is thought to be illegal or a potential threat to the republic. Since the Second Republic was established in 1945, care has been taken to ensure that laws concerning individuals are in accord with the United Nations Universal Declaration of Hu- man Rights of 1948. Amendments to the constitution can be made through laws desig- nated constitutional laws or through constitutional provisions if the amendment is part of another law. Passage of an amendment re- quires a two-thirds majority vote in the presence of at least one-half the members of the Nationalrat (National Council), parliament's lower house. Constitutional laws or provisions are accompanied 170 Government and Politics by a national referendum only if requested by one-third of the deputies of either the Nationalrat or the Bundesrat (Federal Coun- cil), parliament's upper house. In 1984 a constitutional amend- ment provided that amendments changing the division of responsibilities between the federal government and the provinces require the approval of two-thirds of the Bundesrat as well as two- thirds of the Nationalrat. In addition to the amended constitution, two laws — a treaty and a constitutional law — are particularly important to the constitu- tional development of Austria because they concern the country's international status and reaffirm the people's basic rights. In April 1955, a stalemate over the restoration of full sovereignty to Aus- tria was finally broken when the Soviet Union agreed to drop its insistence that a solution to the Austrian question be tied to the conclusion of a peace treaty with Germany. This paved the way for the signing of the State Treaty in May 1955 by the Four Pow- ers (Britain, France, the Soviet Union, and the United States) and Austria. The treaty established Austria's frontiers as those existing on January 1 , 1938, and forbade economic or political union with Germany. Rights to a democratic government and free elections were guaranteed, and the document reiterated guarantees of funda- mental rights and freedoms, including equal rights for minorities. Specifically mentioned in this category were Slovenes and Croats. The second law of constitutional importance is the federal constitu- tional Law of October 26, 1955, on the neutrality of Austria. The law declared the country's permanent neutrality and prohibited it from entering into military alliances or allowing foreign coun- tries to establish military bases within the borders of Austria. Government Institutions The Austrian system provides for a president who is popularly elected. The president functions as head of state and has little authority over the actions of the government. Political power is in the hands of Austria's head of government, the chancellor (prime minister), who, as in parliamentary systems elsewhere, is usually the leader of the party with the most seats in the lower house of the country's bicameral parliament, the Nationalrat (National Council). The chancellor and his cabinet have extensive executive powers and also are the authors of most legislation. Yet, however great the powers of the executive are, it is politically responsible to the Nationalrat and can govern only with its approval. The up- per chamber of parliament, the Bundesrat (Federal Council), represents the interests of Austria's nine provinces. Its limited pow- ers reflect the underdeveloped nature of Austrian federalism. The 171 Austria: A Country Study ADMINISTRATION DIRECTS CONSTITUTIONAL COURT CHANCELLOR CABINET APPOINTS — -OR— DISMISSES PRESIDENT BUNDESRAT NATIONALRAT | L E G 1 DETERMINES PROVINCIAL LEGISLATURES ELECTS ELECTORATE Source: Based on information from Kurt Richard Luther and Wolfgang C. Miiller (eds.), Politics in Austria, London, 1992, 101; andMelanieA. Sully, A Contemporary History of Austria. London. 1990. 155. Figure 11. Structure of Government, 1993 chancellor and the cabinet, together with their party's representa- tives in the Nationalrat, are the main center of government activity and power (see fig. 11). The Federal President A 1929 amendment to the 1920 constitution introduced the con- cept of a popularly elected president. Because of the suspension of the constitution in 1934, however, the first popular election of a president did not take place until 1951. The president serves a six-year term and is limited to two consecutive terms. Candidates must be at least thirty-five years of age and eligible to vote in Na- tionalrat elections. Political parties nominate presidential candidates, but it is cus- tomary, given the limited powers of the position, for the president 172 Government and Politics to serve in a nonpartisan manner. To win an election, a candidate must receive more than 50 percent of the votes. If no candidate succeeds on the first ballot, a runoff election is held between the two candidates receiving the highest number of votes. The presi- dent serves as head of state. Presidential duties include convok- ing, adjourning, and, in rare cases, dissolving the Nationalrat. The president signs treaties, verifies that legal procedures for legisla- tion have been carried out, and grants reprieves and pardons. Although he cannot veto legislation, the president is empowered to reject a cabinet proposal or delay enactment of a bill. Unless the constitution states otherwise, official acts of the president re- quire the countersignature of the chancellor or the relevant minister. The president plays an important, though largely formal, role in the political process of forming and dissolving governments. In the aftermath of a parliamentary election, the president invites the leader of the strongest party in the Nationalrat to form a govern- ment. This duty reflects the fact that both the government and parliament are responsible to the president in the sense that he can dismiss individual members of the government, including the chan- cellor, as well as dissolve the Nationalrat. The president, on the recommendation of the chancellor, also appoints individuals to cabi- net positions and other important government positions, includ- ing that of vice chancellor. The president also can dismiss individual cabinet officials, but only on the recommendation of the chancel- lor. During the Second Republic (that is, since 1945), the presi- dent has dissolved the Nationalrat only twice, in 1971 and 1986, in both cases because the incumbent chancellor and his party wished to have a new election. The president has emergency authority that gives him signifi- cant powers. Should an emergency arise when the Nationalrat is not in session, the cabinet can request that the president act on the basis of "provisional law-amending ordinances," as provided for in the constitution. Such ordinances require the countersigna- ture of the cabinet. Emergency decrees must be sent to the Na- tionalrat. If it is not in session, the president must convoke a special session. The Nationalrat has four weeks either to enact a law to replace the decree or to void the decree. Two procedures are outlined in the constitution for pressing charges against the president: one entails a referendum; the other entails a vote by a joint session of parliament, the Bundesversamm- lung (Federal Assembly). To set a referendum in motion, one-half of the Nationalrat deputies must be present and vote by a two-thirds majority to ask the chancellor to convoke the Bundesversammlung, which then must vote by a simple majority for a referendum. The 173 Austria: A Country Study referendum is carried if a simple majority of voters vote in favor of it. If the referendum is defeated, then the president is regarded as reelected, the Nationalrat is dissolved, and new elections are scheduled. Under no circumstances, however, shall a president serve more than twelve years in office. The second procedure for bringing charges against the president results from his being responsible to the Bundesversammlung, which is authorized to vote on his actions. Either house of parliament can ask the chancellor to convoke the Bundesversammlung for such a purpose. One-half of the members of each house must be present, and the Bundesversammlung must cast a two-thirds vote to press charges against the president. If the president dies or if the office is vacated for any other rea- son, a new election is held. In the interim, the chancellor carries out necessary presidential duties. Chancellor and Cabinet The chancellor (prime minister) is the head of government as well as chairman of the cabinet. Executive political power formal- ly rests in the hands of the cabinet. The chancellor, the cabinet, and their working majority in the Nationalrat are the real focal point of executive power in the political system. The chancellor is appointed by the president and can also be dismissed by him. The chancellor is usually the leader of the party that has won the most seats in the latest parliamentary election. At the very least, he or she is the choice of a majority of the new deputies. The chan- cellor must be eligible to serve in the Nationalrat but need not be a member of it. The chancellor also serves as head of the Federal Chancellery, which is staffed with civil servants. In most respects, the chancellor functions as first among equals in the cabinet. He coordinates the work of the cabinet but is not entitled to give orders to individual ministers. However, the chan- cellor's power varies depending on political circumstances and his own political gifts. In a coalition government, the chancellor shares coordinating duties with the vice chancellor, who is the leader of the junior party in the coalition. If the chancellor heads a one-party government, his or her leeway to make decisions is increased. Dur- ing the long period of rule under Chancellor Bruno Kreisky (1970-83), the public visibility of the chancellor was enhanced through the increased use of television. From the standpoint of the public, the chancellor had become the dominant figure of government. On the recommendation of the chancellor, the president appoints individuals to the various cabinet positions. Cabinet members do 174 Government and Politics not have to be members of the Nationalrat, but they must be eligi- ble to be elected to it. Persons chosen as cabinet ministers are usually leading members of a political party or interest group. Occasion- ally, however, a person has entered the cabinet from a high-level civil service position. The number of ministries varies; in 1993 there were fourteen ministries. In a coalition government, the apportionment of the cabinet posts is roughly proportional to the parties' respective strengths in the Nationalrat. The awarding of particular posts is based on a coalition agreement reached between the two parties. In keeping with the traditional Austrian principle of Proporz (the dividing of political offices according to the respective strengths and interests of the parties), parties name individuals to posts of par- ticular concern to them. For example, if the SPO is a member of the coalition, at a minimum it names the minister for labor and social affairs, in keeping with the strong support it enjoys from the trade unions. By the same token, if the OVP is part of the coali- tion, it names the minister for agriculture and forestry because farm- ers are one of its main interest groups. The chancellor and vice chancellor do not have total control over the selection process for filling cabinet positions. For example, the SPO faction in the Aus- trian Trade Union Federation (Osterreichischer Gewerkschafts- bund — OGB) usually chooses the minister for labor and social affairs, and the OVP is careful to allow its various auxiliary associa- tions and provincial parties to make certain selections. Beginning in 1987, the OVP and SPO have followed a practice of selecting an independent to head the Ministry for Justice. The cabinet is subject to dismissal by the president and the Na- tionalrat. The president can dismiss the entire cabinet without the concurrence of the chancellor, but removal of individual members requires the recommendation of the chancellor. If the Nationalrat passes a vote of no confidence — which requires that one-half of the deputies be present — concerning the entire cabinet or a minister, the cabinet or minister is removed from office. State secretaries are appointed and leave office in the same man- ner as ministers, but each government ministry does not have a state secretary. State secretaries aid ministers in parliamentary business and are bound by their ministers' instructions. They are nonvoting participants in cabinet sessions. A state secretary is not necessarily a member of the same party as the minister he serves. Nationalrat The Nationalrat (National Council), the lower house of parlia- ment, exercises all of the powers usually associated with a national 175 Austria: A Country Study legislature. It has the power to remove the entire cabinet or in- dividual members of it by a vote of no confidence. All legislation and treaties must be approved by the Nationalrat. Before a vote can take place, at least one- third of the Nationalrat' s members must be present. A simple majority suffices for the passage of legisla- tion. Sessions are public unless the deputies determine otherwise. Deputies elect a president and second and third presidents from among their members to serve during the four-year legislative term. Party leaders who are members of their party's executive and of a parliamentary faction that serves as a liaison between parliament and a political party are most likely to be presidential candidates. The president and the third president belong to the same party, usually the party holding the most seats in the Nationalrat. The second president belongs to the other major party. Presidential duties include nominating employees of the Federal Chancellery, whose staff serves the three presidents. The three presidents pre- side over plenary sessions in two-hour shifts. They also join with the chairmen of the parliamentary factions to form the Presidial Conference, which directs the Nationalrat 's activities and decides the time and agenda of plenary sessions and, to a lesser extent, the time and agenda of the committees. The Presidial Conference is one of the rare groups not affected by the custom of proportion- al representation. All parties holding seats in the Nationalrat are represented on the conference. In 1993 the Nationalrat contained roughly fifteen committees in which legislative proposals are both prepared and examined and the results of parliamentary investigations considered. Each com- mittee has various numbers of subcommittees assigned to deal with specific kinds of legislation. In addition to the committees, there are also the Main Committee and the Permanent Subcommittee, the members of which are elected at the start of each new legisla- tive period. The Main Committee has responsibility for oversee- ing aspects of the state-run industries and for dispatching Austrian troops on international peacekeeping missions. It also participates in deciding the date for Nationalrat elections and setting rates for postal and telephone services. The president of the Nationalrat serves as chairman of the Main Committee. The Permanent Sub- committee plays a limited role because its main function is to ful- fill the duties of the Main Committee in the case of the dissolution of the Nationalrat by the president. Equally as important as the committees are the Klubs (factions), which all parties in the Nationalrat maintain. The factions usually have a leader and an executive committee, and they provide deputies with a behind-the-scenes setting to discuss political strategy 176 Government and Politics with like-minded colleagues. Individuals elected as deputies to the Nationalrat automatically become members of their party's fac- tion. Faction leaders assign deputies to committees and decide on the questions that are to be asked during debates and the priority for legislative initiatives. In addition to the work of the committees, another important function of the Nationalrat is to question the government regularly on its activities and legislative proposals. One device frequently employed is an "interpellation," which summons for questioning before the Nationalrat a particular cabinet minister or government official. A minimum of twenty deputies is required to set an inter- pellation in motion. Questioning a government official is the prelude to a parliamentary debate on the issue. A 1970 amendment to the election laws increased the number of Nationalrat seats from 165 to 183. Seats in the Nationalrat are divided among the country's nine provinces according to popula- tion. Deputies serve a four-year term and are elected according to constitutional and other federal laws. Candidates must be at least twenty years old on January 1 of the election year and must also be eligible to vote. The Nationalrat has only one session per year, beginning no earlier than September 15 and ending no later than July 15. An extraordinary session of the Nationalrat can be convoked either by order of the federal president, by request of the cabinet, or by request of one-third of the deputies. Once a request has been made, the extraordinary session must commence within two weeks. After a parliamentary election, the newly elected Nationalrat must be convened within thirty days. The Nationalrat can be dissolved either by presidential action or by itself. The president can dissolve the Nationalrat at the chan- cellor's request, but he is limited to dismissing it only once for the same reason. New elections must be held soon enough to enable the new parliament to convene within 100 days of the dissolution. The Nationalrat is empowered to dissolve itself by a simple majority vote. During the Second Republic, membership of the Nationalrat has been heavily weighted toward men who come from white-collar professions. Changes in the sociological profile of the deputies have occurred slowly. The Nationalrat elected in November 1990 con- tained a record 22 percent of female deputies. Prior to this elec- tion, female deputies had never accounted for more than 15 percent of the total number of deputies. The average age of the deputies elected in 1990 was forty-six. Almost 40 percent of the deputies elected in 1990 were university graduates, and 25 percent were 177 Austria: A Country Study employees of political parties, politically oriented interest groups, or social welfare organizations. The majority of legislative proposals originate in the executive. Legislation occasionally starts in the Nationalrat, but the close cooperation between the executive and the majority party in parlia- ment makes such initiation unnecessary most of the time. During the Second Republic, governmental legislative proposals have out- numbered Nationalrat initiatives by three to one. Parliament's role in the legislative process is focused more on bringing to public at- tention the background of the government's legislative proposals and exposing any mistakes the government may have made. Op- position parties have the right to force the government to answer any questions about pending legislation. Before a bill is introduced in parliament, it has already passed through an intensive process of examination. The government solicits comments from the various interest groups affected by the bill, especially the chambers of agriculture, commerce, and labor (see Principal Economic Interest Groups, ch. 3). During this stage, a bill frequently is modified to meet the objections of key interest groups and opposition parties in parliament. Changes to legisla- tive proposals may also be made after a bill has been introduced in the Nationalrat, but the majority of changes are made before the bill is introduced officially. Bills are amended significantly by the parliament only 10 to 15 percent of the time. By West European standards, the percentage of bills passed unanimously by the Austrian parliament is high. Unanimity prevailed anywhere between 38 and 49 percent of the time during the parliaments of the 1970s and 1980s. In the late 1980s and ear- ly 1990s, with the advent of the Greens in parliament and the in- creased power of the FPO, unanimity was on the decline. As the complexity of the issues facing government has increased, so too has the importance of committees to the parliament's work. After a bill reaches the Nationalrat, it is assigned to a committee and frequently also to a subcommittee. Deputies typically spend twice as much time in committee hearings as in plenary sessions. The subcommittees hold even more hours of hearings than the full committees. Because of the unwieldy nature of plenary sessions, 80 percent of changes to government legislation occur in committee. In 1975 the Nationalrat amended its procedures to give the oppo- sition and smaller parties a greater role in the legislative process. Under the 1975 amendments, one-third of the deputies can request the Constitutional Court to review a law for constitutionality. Fur- ther, one-third of the deputies can request the government's ac- counting agency to conduct an audit of a government agency. These 178 Government and Politics changes reflect the intensification of political competition that oc- curred in the Nationalrat after the long period of grand coalition governments between the two major parties ended in 1966. The OVP, as the major opposition party during the era of SPO rule (1970-83), led the drive for greater rights for minority parties. Bundesrat The interests of Austria's nine provinces are represented at the federal level in the Bundesrat (Federal Council), the upper house of parliament. The Bundesrat has sixty- three seats, which are ap- portioned among the provinces on the basis of population. Each province is guaranteed at least three seats. As of late 1993, the break- down of seats was as follows: Vienna and Lower Austria had twelve each; Styria and Upper Austria, ten each; Tirol, five; Carinthia and Salzburg, four each; and Burgenland and Vorarlberg, three each. The members of the Bundesrat are elected by the provincial legislatures on the basis of proportional representation. At least one seat must be given to the party having the second largest number of seats in the provincial legislature. If several parties have the same number of seats, the party that won the second largest number of votes in the last provincial election is awarded a seat in the Bun- desrat. The main purpose of the Bundesrat is to protect provincial in- terests, but its powers are restricted because the government is not answerable to it. All laws passed by the Nationalrat must be present- ed to the Bundesrat for review. However, the Bundesrat can at most delay the passage of laws by means of a suspensive veto. In such a case, the bill is sent back to the Nationalrat, which can over- ride the Bundesrat' s veto by reapproving the bill. Once this is done, the bill becomes law. In 1984 the body's powers were increased by a constitutional amendment that required approval by two-thirds of the Bundesrat to any proposed constitutional change in the dis- tribution of competencies between the federal government and the provinces. Despite this change, the Bundesrat remains a weak in- stitution. Bundesversammlung The two houses of parliament meet jointly as the Bundesver- sammlung (Federal Assembly) to witness the swearing in of the president, to bring charges against him, or to declare war. Usual- ly, the Bundesversammlung is convoked by the president. If charges are brought against the president, the chancellor convokes the Bun- desversammlung. Meetings are chaired alternately by the presi- dent of the Nationalrat and the chairman of the Bundesrat. If the 179 Austria: A Country Study Bundesversammlung passes a resolution, its validity must be at- tested to by the chairman. The chancellor then countersigns and publishes the resolution. Judicial System The judicial system is independent of the executive and legisla- tive branches. The constitution establishes that judges are indepen- dent when acting in their judicial function. They cannot be bound by instructions from a higher court (except in cases of appeal) or by another agency. In administrative matters, judges are subor- dinate to the Ministry for Justice. A judge can be transferred or dismissed only for specific reasons established by law and only af- ter formal court action has been taken. The Austrian judiciary func- tions only at the federal level, and thus there is no separate court system at the provincial level. The Constitutional Court The Constitutional Court decides the legality of treaties and the constitutionality of laws and decrees passed at the federal, provin- cial, and local levels. Cases involving courts and administrative agencies or the Administrative Court and the Constitutional Court are heard in the Constitutional Court. Individuals can present cases to the court if they believe a decision of an administrative agency has violated their constitutional rights. Monetary claims against the state, provinces, administrative districts, or local communities that cannot be settled by a regular court or an administrative agency are brought to the Constitutional Court, as are claims regarding disputed elections. The court also decides questions of impeach- ment and hears cases charging the president with breaking a con- stitutional law or cases charging members of federal or provincial governments with breaking a law. The court is composed of a president, vice president, twelve judges, and six alternates. The federal president, on recommen- dations from the cabinet, appoints the court's president, vice presi- dent, six judges, and three alternates. The federal president appoints six additional judges and three more alternates based on nomina- tions from the Nationalrat (for three judges and two alternates) and the Bundesrat (for three judges and one alternate). The con- stitution requires that three judges and two alternates of the court, which sits in Vienna, live outside the city. The president of the court chairs its meetings and decides on the assignment of cases to individual judges, but he does not have voting rights. Cases are heard by five, nine, or all thirteen of the judges and are decided by majority vote. 180 Government and Politics The selection of judges for the Constitutional Court has been con- trolled by the OVP and the SPO. The two parties have applied the principle of Proporz to filling vacancies on the court. Between 1945 and 1970, the OVP was the larger of the two parties in terms of parliamentary strength, and it controlled seven of the judgeships with voting rights; the SPO controlled six of the judgeships. Be- ginning in 1970, the ratio was reversed when the SPO gained more seats in the parliament than the OVP. The Administrative Court The Administrative Court, located in Vienna, is the court of final appeal for cases involving administrative agencies. The court's specific purpose is to determine whether an individual's rights have been violated by an administrative action or omission. Individu- als can also appeal to this court if an administrative agency fails to grant a decision in a case. The Administrative Court may not rule on matters that come under the competence of the Constitu- tional Court. The Administrative Court is presided over by a court president who is assisted by a vice president and several other court officers. Appointments to the court are made by the federal president on the recommendation of the cabinet. Prerequisites for appointment are completion of law and political science studies and ten years of experience in a related field. At least one- third of the court's members must be qualified judges, and at least one-fourth must come from the provinces, preferably from civil service positions. Panels of three, five, or nine judges sit in court at any one time, depending on the importance of the case. Ordinary Courts The system of ordinary courts is headed by the Supreme Court in Vienna. This court is the court of final instance for most civil and criminal cases. It can also hear cases involving commercial, labor, or patent decisions, but constitutional or administrative de- cisions are outside its purview. Justices hear cases in five-person panels. Four superior courts, which are appellate courts, are located in Vienna, Graz, Linz, and Innsbruck. They are usually courts of second instance for civil and criminal cases and are the final ap- pellate courts for district court cases. Usually, a three-judge panel hears cases. On a lower level are seventeen regional courts having jurisdic- tion over provincial and district matters. Boundaries of judicial dis- tricts may or may not coincide with those of administrative districts. 181 Austria: A Country Study Regional courts serve as courts of first instance for civil and crimi- nal cases carrying penalties of up to ten years' imprisonment and as appellate courts for some cases from district courts. Justices usually sit as a three-person panel, but some cases can be heard by only one judge. Vienna and Graz have separate courts for civil, criminal, and juvenile cases, and Vienna also has a separate com- mercial court. At the lowest level are about 200 district or local courts, which decide minor civil and criminal cases, that is, those involving small monetary value or minor misdemeanors. Questions involving such issues as guardianship, adoption, legitimacy, probate, registry of lands, and boundary disputes are also settled at this level. Depend- ing on the population of the area, the number of judges varies, but one judge can decide a case. Civil and criminal matters are heard in separate courts in Vienna and Graz. Vienna further di- vides civil courts into one for commercial matters and one for other civil cases. Ordinary court judges are chosen by the federal president or, if the president so decides, by the minister for justice on the basis of cabinet recommendations. The judiciary retains a potential voice in naming judges, inasmuch as it must submit the names of two candidates for each vacancy on the courts. The suggested candi- dates, however, need not be chosen by the cabinet. Lay people have an important role in the judicial system in cases involving crimes carrying severe penalties, political felonies, and misdemeanors. The public can participate in court proceedings as lay assessors or as jurors. Certain criminal cases are subject to a hearing by two lay assessors and two judges. The lay assessors and judges decide the guilt or innocence and punishment of a defendant. If a jury, usually eight lay people, is used, the jury decides the guilt of the defen- dant. Then jury and judges together determine the punishment. Special Courts Cases outside the jurisdiction of these courts are heard in spe- cial courts. For example, labor courts decide civil cases concern- ing employment. Employers and employees are represented in labor court hearings. Cases involving the Stock and Commodity Ex- change and the Exchange for Agricultural Products are decided by the Court of Arbitration, which is composed of members of the exchanges. Social insurance cases are heard by the provincial com- missions for social insurance. The Patent Court decides appeals of patent cases. 182 Government and Politics The People's Attorney The Office of the People's Attorney, which was created in 1977 and granted constitutional recognition in 1981 , functions in a man- ner similar to an ombudsman's office. It is designed to assist citizens who believe that they have been improperly treated by government administration. The office can also initiate its own investigations if it suspects that particular government offices are engaged in cor- ruption or fraud. After concluding its investigations, the office has the authority to issue binding recommendations to government offices to rectify abuses. Legal Training Attaining the title of attorney-at-law requires eleven years of train- ing. Four years of this period consist of prescribed studies in law and political science at a university. On completion of a doctoral program, the candidate undergoes a seven-year apprenticeship, dur- ing which one year must be spent in a civil or criminal court and three years in an attorney's office. Finally, it is necessary to pass the bar examination. Civil Service Civil servants have held a position of respect in Austrian society since the formation of the civil service in the eighteenth century, when it was considered to be "carrying out a mission for the state. ' ' The civil service is highly regulated. Public servants take an oath of office, promise obedience to their superiors, and pledge to keep official matters secret. A civil servant may neither join an associa- tion nor be employed in another job that could be interpreted as unworthy of his or her position. Besides the high esteem in which the civil service is held, job security is also an attractive feature. Periodic raises are automatic, and promotions are scheduled at regular intervals. The retirement pension is adequate. A civil servant may be dismissed only for seri- ous misconduct. During the grand coalition of 1945-66, the OVP and SPO in- troduced the system of Proporz into the civil service. Prior to the founding of the Second Republic, the civil service had been domi- nated by OVP members, and thus after 1945 special steps were taken to recruit persons with ties to the SPO. The two parties came to exercise almost complete control of the personnel of the minis- tries that they controlled in the cabinet. During the period of single- party rule (1966-83), the importance of political allegiance came to play a lesser role in the selection process of the civil service. 183 Austria: A Country Study Chancellor Kreisky made sure that a large number of persons without party affiliation were appointed to high-level positions in the civil service. Reforms also were introduced in this period to make the civil service better able to attract highly qualified people. In 1975 a civil service training academy was established, and after 1980 some top positions were changed to fixed-term appointments. Further changes were made to give equal opportunity for career advancement to all members of the civil service, regardless of their specialty. Tradi- tionally, people with legal training had a decided advantage in ris- ing to the top of the system. As of 1993, the government was working on a comprehensive reform of the civil service system. Provincial Government Each of the nine provinces has its own constitution, which prescribes its governmental organization. Common to each province is an elected Landtag (provincial legislature), which is popularly elected on the basis of proportional representation. According to the federal constitution, the number of deputies can range from thirty- six to sixty-five, depending on the population of the province. Vienna, which is simultaneously a province and a city, is in a spe- cial category — its legislature has 100 deputies. A Landtag is sub- ject to dissolution by the federal president at the cabinet's request. This process requires the consent of the Bundesrat. One-half of the Bundesrat 's deputies must be present and cast a two- thirds vote in favor of the action. The Landtag elects an executive composed of a governor and councilors. A deputy is elected to serve in the absence of the gover- nor. Candidates for these positions must meet eligibility require- ments of the Landtag, although they need not belong to it. Elections to the Landtag occur every five years, except in Upper Austria, where they are held every six years. Legislative periods can be short- ened and elections held if the Landtag votes to dissolve itself. Provincial constitutions can be amended, provided that changes do not conflict with the federal constitution. Passage of a constitu- tional amendment requires the presence of at least one-half of the Landtag's members and a two-thirds majority vote. Regulations for passage of other provincial laws vary, but generally the proce- dure requires a vote by the Landtag, verification that the proper procedure has been followed, the countersignature of the prescribed official, and publication in the provincial law gazette. Before a law is published, the federal minister whose jurisdiction covers the area of the proposed law has to be informed of the province's action. The cabinet then has eight weeks to notify the province if the bill 184 Government and Politics interferes with federal interests. The Landtag can override the fed- eral government's objections by voting again in favor of the bill with at least one-half of its members present. The federal govern- ment would probably appeal to the Constitutional Court if it strenu- ously objected to a provincial law. The provinces have a restricted ability to raise taxes. They may not tax items already subject to federal taxation. Every four to six years, the federal government, the provinces, and the municipali- ties negotiate a Finance Equalization Law that determines how tax revenues raised at the federal and provincial levels are to be divid- ed. This system ensures that the provinces are fully compensated for the many federal programs that they implement. Article 15 (1) of the federal constitution states that matters not expressly reserved to the federal government come under the juris- diction of the provinces. Matters in which the provinces have primary jurisdiction include local police, primary education, hous- ing, health, and protection of the environment. If a provincial government believes that some federal action is infringing on its jurisdiction, it can appeal to the Constitutional Court for a ruling. Provisions exist for interprovincial coordination of policies by means of compacts and treaties. Such coordination, however, is feasible only if the matters at hand are among the autonomous rights of the provinces. This manner of cooperation has rarely occurred. Instead, conferences of provincial officials are held to plan less for- mal methods of cooperation. The federal government must be noti- fied of interprovincial action. Local Government Provinces are divided into districts and local communities. The primary function of district governments is to administer federal programs. They do not have the power of taxation. A district is headed by a district commissioner, usually a career civil servant, who is appointed by the provincial governor. Local communities are self-governing, having a popularly elected community council that is chosen by proportional representation on the basis of polit- ical party strength. The number of representatives ranges from seven to 100, depending on the population. Members serve a five- or six-year term as determined by provincial regulations. Com- munity council meetings are presided over by a mayor, elected by and responsible to the community council. The federal government or a province may delegate some func- tions to a local government. Otherwise, local communities deal with matters of local concern, such as safety, traffic, police, settlement 185 Austria: A Country Study of disputes that are not dealt with by the courts, public utilities, cultural institutions, public housing, and health care services. Local actions, whether autonomous or delegated, are in the long run usually subject to provincial or federal supervision or controls. Administrative and legal regulations on the provincial and federal levels are so pervasive that even decisions that are considered the sole responsibility of local communities are actually limited. Local communities, however, have recourse to the Administrative Court and the Constitutional Court if they believe that their rights are being infringed upon. Electoral System The electoral system is based on the principle of proportional representation. The system's basic outline was established in the constitution of 1920, although significant changes were made in 1970 and 1992. Among other changes, the amendments of 1970 raised the number of seats in the Nationalrat from 165 to 183. The 1992 reform of the election law, which went into effect in May 1993, alters the electoral system for the Nationalrat in a num- ber of significant ways. It divides the country into nine provincial electoral districts that correspond to the country's nine provinces. These districts contain a further forty-three regional electoral dis- tricts. The creation of the small regional electoral districts is in- tended to foster a greater feeling of connection between voters and those who represent them in parliament. The law also aims to per- sonalize elections by giving voters greater power than before of elect- ing individual candidates of the party of their choice by voting directly for them rather than for the party list of candidates as a whole. This reform may reduce the power of party leaders to im- pose their preselected candidates on the electorate. The law also modifies vote-counting procedures to ensure that the number of parliamentary seats won by a party will conform more closely with votes cast. Lastly, the law attempts to prevent a proliferation of small parties sitting in the Nationalrat by barring a party from that body if it has not won at least 4 percent of votes cast nationwide. However, a party can be represented in parliament by winning at least one seat in a regional electoral district. According to the 1992 law, votes in Nationalrat elections are counted in three stages, although a voter casts only one ballot. On this ballot, the voter indicates the party of his or her choice and then may choose two candidates from this party, one to be elected from the regional voting district and one from the provincial vot- ing district. Votes going to a preferred candidate are called pref- erential votes. In the first stage of counting votes, the returns 186 Vienna's city kail Courtesy Austrian National Tourist Office, New York from regional voting districts are examined; in the second stage, those from provincial voting districts are examined. In these first two stages, the Hare system (see Glossary) is used to determine the proportional allocation of seats. In the third stage of counting votes, candidates on the national party list are allocated seats ac- cording to the d'Hondt method (see Glossary). A party must win a parliamentary seat in the first stage of vote counting in order to win seats in the second and third stages. A candidate who receives preferential votes amounting to at least one- sixth of the votes his party receives wins a parliamentary seat. This is also the case for a candidate who receives preferential votes amounting to at least one-half the electoral quota (Wahlzahl), that is, the number of valid ballots in a voting district divided by the number of parliamentary seats allotted to it. The vote tallying proce- dures established by the new law mean that about ninety parliamen- tary seats come from regional voting districts, about sixty- five from 187 Austria: A Country Study provincial voting districts, and roughly twenty-five from the fed- eral level. All persons aged nineteen and over by January 1 of the year in which the election is held are eligible to vote. Voter partici- pation has traditionally been very high. In national elections, it has fallen below 90 percent only once (in 1990, when it stood at 86 percent). Voting always takes place on a Sunday. Political Dynamics Between the end of World War II and the late 1980s, when some new trends became evident, Austria's political system seemed sta- ble and unchangeable. Most political scientists considered Austria a classic case of constitutional democracy, that is, a political sys- tem in which cohesive social groups are closely identified with po- litical parties. According to this theory, Austrian politics, business, and society in general were decisively shaped by the influence of three major social camps, or subcultures {Lager) — the socialist, the Catholic-conservative, and the German-nationalist. The most important factors in determining to which subculture a person belonged were geographic location (rural or urban), socioeconomic status, and professional occupation. The socialist camp had its basis in the urban working class of Vienna and other cities and in the intellectual class. The Catholic-conservative camp had its traditional base in the small towns and farming communi- ties of Austria and was almost exclusively Roman Catholic. The German-nationalist camp was smaller than the other two subcul- tures and was founded on the enthusiasm for union with Germa- ny that was prevalent during the years of the First Republic (1918-38). A high percentage of its members came from white- collar professions. Austria's subcultures provided their members with a self- contained milieu in which to pursue their lives and a variety of occupations. In addition to the political parties aligned with the Lager, each camp featured professional and trade organizations that played an important role in party politics and in society as well. This traditional system has continued into the 1990s. In 1993, in the socialist camp, the key organizations affiliated with the SPO were the Group of Socialist Trade Unionists (Fraktion Sozialisti- scher Gewerkschaftler — FSG), the Free Business Association of Aus- tria (Freier Wirtschaftsverband Osterreichs — FWB), and the SPO Farmers (SPO-Bauern). In the Catholic-conservative camp, the chief organizations of the OVP were the League of Austrian Work- ers and Salaried Employees (Osterreichischer Arbeiter- und Angestelltenbund — OAAB), the League of Austrian Business (Oster- reichischer Wirtschaftsbund — OWB), and the League of Austrian 188 Government and Politics Farmers (Osterreichischer Bauernbund — OBB). The German- nationalist camp, which is represented by the FPO, had only one auxiliary organization of note as of 1993, the Circle of Free Busi- ness Persons (Ring Freiheitlicher Wirtschaftstreibender — RFW). A key source of influence for the professional and trade organi- zations is their control of the chambers of agriculture, commerce, and labor. In the Austrian corporatist system, the chambers are assigned responsibility for implementing certain aspects of economic laws and regulations. Moreover, membership in the chambers is obligatory for persons employed in a wide range of occupations. Thus, the professional and trade organizations and the chambers are assured a large amount of influence in the public realm. The OVP dominates the Chamber of Agriculture through the OAAB and the Chamber of Commerce through the OWB. The SPO has a controlling influence in the Chamber of Labor through the FSG. The Austrian system of interests was dominated by the socialist and Catholic-conservative camps for virtually the entire postwar period. During the early years of the Second Republic, politicians of the SPO and OVP were adamant about the need for political consensus and compromise. One overriding reason for the emer- gence of a system designed to avoid conflict was the negative ex- perience of the 1930s, when the political parties clashed so vehemently that they ended up fighting a short civil war in 1934. During the period of Nazi rule, many Austrian politicians found themselves imprisoned alongside their political opponents. This shared fate convinced the country's political elite of the impera- tive for consensus in postwar Austria. From 1945 to 1966, the coun- try was ruled by the grand coalition formed by the OVP and the SPO, an astonishing duration of a series of governments composed of Austria's two main political competitors. The cumulative effect of a variety of changes in Austrian socie- ty in the postwar era has led many political scientists to conclude that the strength of the political camps, or Lager, has weakened sig- nificantly. A major shift in the way people earn their livelihood — a decline in farming and manufacturing and a growth in the ser- vices sector — has weakened the hold of the Lager on voters. An increasingly secularized society has lessened the influence of the Roman Catholic Church. An increased sense of Austria's existence as a nation (up from less than 50 percent in the mid-1960s to 74 percent in one poll in 1990) has reduced the political potency of pan-Germanism. And the growth of the suburbs and the transfor- mation of rural areas by tourism have reduced the homogeneity of traditional SPO and OVP enclaves. 189 Austria: A Country Study The weakened hold of the Lager on Austrian society and politics has created opportunities for smaller parties. A 1990 poll showed that only 50 percent of respondents claimed some kind of identifi- cation with a political party; a mere 20 percent claimed strong iden- tification. In the 1960s and 1970s, similar polls had shown that more than 30 percent of Austrians identified closely with a party. Services- sector, or white-collar, employees were often part of a block of so-called floating voters who did not identify with a particular party. This block can be the key to an electoral victory for the party that wins its votes. The propensity toward what political scientists call electoral dealignment, that is, the breakdown of long-standing voter loyal- ties, was bound to have effects on Austrian voting behavior, and by 1986 the first signs of change were evident. In the parliamen- tary election of that year, the combined vote for the OVP and SPO fell to 84 percent, the first time since 1962 that it had dropped be- low 90 percent (see table 13, Appendix). The party benefiting the most from the losses by the major parties was the FPO, which dou- bled its vote. Moreover, for the first time ever, members of the Green political movement entered parliament. The trend away from the dominance of the Lager system con- tinued in the next parliamentary election in 1990, but this time it was the OVP alone that bore the brunt. Its share of the vote declined from 41 .3 to 32. 1 percent, a massive loss by the standard of Austria's ultrastable political system. The FPO had another strik- ing success, and the environmentalists lost some votes but gained two seats in the Nationalrat. Although the 1990 election did not lead to a change in govern- ment (because the OVP and SPO had renewed their grand coali- tion in 1987), it nevertheless marked a watershed in Austrian political history. For the first time in the Second Republic, the status of the OVP as a major party was placed in doubt. Whereas in the 1986 election the OVP received only 88,000 fewer votes than the SPO, in 1990 the difference ballooned to more than 500,000. Un- der its colorful leader, Jorg Haider, the FPO was changing the Aus- trian party system from one dominated by two parties to one with multiparty possibilities. The Social Democratic Party of Austria The Social Democratic Party of Austria (Sozialdemokratische Partei Osterreichs — SPO), until 1991 known as the Socialist Party of Austria (Sozialistische Partei Osterreichs — SPO), has its roots in the original Social Democratic Workers' Party (Sozialdemokra- tische Arbeiterpartei— SDAP), founded in 1889 by Viktor Adler, 190 Government and Politics a young doctor. The SDAP supported revisionist Marxism and the use of democratic methods to establish working-class rule in a democratic government. The SDAP was responsible for push- ing through universal voting rights for men in 1905 and for ex- tending the same for women in 1919. From 1934 to 1945, during the regimes of Engelbert Dollfuss (1932-34) and Kurt von Schusch- nigg (1934-38) and the takeover by the Nazis, the SDAP was out- lawed. In 1945 it was reconstituted as the Socialist Party of Austria. In 1991 the party readopted the designation "Social Democratic." Moderates such as Karl Renner and Adolf Scharf, each of whom eventually served as president of the Second Republic, led the post- war party (see table 14, Appendix). Their primary interests lay in increasing SPO power in the coalition government rather than in fostering Marxism. Between 1945 and 1957, the party support- ed democratic practices and intraparty cooperation, programs for higher wages and lower food prices, and increased government spending on social programs. The election of Bruno Pittermann as party chairman in 1957 marked the beginning of major policy changes. The party had a strong following among industrial workers, but party officials want- ed to expand SPO membership to the middle class and white-collar workers and to soften the party's anticlerical position in order to become acceptable to Roman Catholics. These changes were ex- pressed in a new party program adopted in 1958. The program claimed that the SPO was "the party of all those who work for a living," and it stated the party's opposition to communism and fascism. The late 1960s brought more changes in party doctrine. A new economic program in 1967 constituted a shift from concern for the distribution of wealth to concern for economic growth, including increasing foreign investment in Austria. Cultural and social re- forms were demanded, and emphasis was placed on attending to the needs of young people. In line with its appeal to youth, the party supported a plan to shorten the term of military service. Under Bruno Kreisky, who became chairman of the SPO in 1967, the party continued its move toward the center of the ideo- logical spectrum. Although party platforms continued to refer to the classless society as an ideal, the SPO was careful to distinguish its brand of socialism from the centralized, inefficient version of Eastern Europe and the Soviet Union. The party program of 1978 stressed the four principles of freedom, equality, justice, and solidar- ity. Central to the SPO's philosophy was a guarantee for all Austri- ans of freedom from fear, hunger, exploitation, and unemployment. 191 Austria: A Country Study The freedom to pursue wealth had to be balanced by the govern- ment's guarantee of equal opportunity and social justice. Under Kreisky the SPO triumphed at the polls in 1970, 1971, 1975, and 1979, and between 1971 and 1983 the party enjoyed an absolute majority in parliament. The Kreisky governments laid great emphasis on improving the social welfare system and achieving full employment. The Kreisky era also featured the flourishing of the technocrats — SPO politicians successful in business and bank- ing whose lavish life- styles seemed incongruous in a party supposed to represent the interests of labor. In the parliamentary election of 1983, the SPO lost its absolute majority, and Kreisky decided to retire from politics rather than preside over a coalition govern- ment. Fred Sinowatz, Kreisky' s minister for education, was cho- sen as chancellor in a coalition government with the FPO. The Sinowatz era, from 1983 to 1986, proved to be a short interreg- num and was not distinguished by any great achievements (see Po- litical Developments since 1983, this ch.). Franz Vranitzky, born in 1937, became chancellor in June 1986 when Sinowatz resigned after the SPO lost the presidential elec- tion to Kurt Waldheim. Vranitzky replaced Sinowatz as party chair- man in May 1988, becoming the first person from a working-class background to hold this position. Despite his working-class heritage, Vranitzky had had a successful career in banking before entering politics. Under Vranitzky the SPO moved to restore its image among rank-and-file members by improving its methods of intraparty com- munication. Computers and direct mail technology were used to gauge the opinions of members in the provinces, and efforts were made to improve recruiting techniques by means of recreational groups. In the area of government policy, Vranitzky stressed that limits on state activity were necessary, although he noted that health care and education were fields where market forces had to be regulated. Vranitzky displayed a more open attitude toward the question of privatizing government industries than Kreisky had. To a large extent, changes in this area were inevitable because of large losses in the state industrial sector that came to light in 1985. Vranitzky embraced the principle that privatization should be pursued if it would lead to greater operational efficiency. The press dubbed Vranitzky 's approach "pinstripe socialism." The policy has proven to be a responsible one and has been fairly popular with Austrians. In 1984 the SPO launched a program called Perspectives '90, designed to promote intraparty discussion on current issues. A major aim of the leadership was to show that the party was eager 192 Bruno Kreisky, federal chancellor, 1970-83 Courtesy Austrian National Tourist Office, New York federal chancellor, 1986- Courtesy Austrian National Tourist Office, New York Franz Vranitzky, to listen to grass-roots concerns. A series of nationwide debates even- tually led to the issuance of a draft document in 1986 that incor- porated the views of party members on issues such as the environment, controls on the development of technology, and democratization of society. Events that had embarrassed the party, such as the conflict over the Hainburg power plant in 1984 and Minister for Defense Friedhelm Frischenschlager's reception of Walter Reder in 1985, were also discussed (see Political Develop- ments since 1983, this ch.). An estimated 30,000 party members participated in the Perspec- tives '90 meetings, which took place in 1,000 local groups. The success of this project led the SPO to stage the Congress for the Future in Vienna in the summer of 1987, where 400 of the party's top leaders and intellectual luminaries discussed the outlook for social democracy. It was agreed that the SPO needed to formulate an alternative to the neoconservatism of the 1980s that would al- low for greater codetermination in the workplace but also avoid the pitfalls of too much state control. After the success of this 193 Austria: A Country Study conference, the SPO began planning another that would produce a Social Democratic Manifesto for the Year 2000. Membership in the SPO is direct (unlike the OVP, where a per- son joins an organization affiliated with the party). SPO's mem- bership grew rapidly in the postwar period — from 360,000 members in 1946 to its peak of nearly 720,000 members in 1979. With the loosening of the grip of the Lager on Austrian society, the SPO's membership has declined slightly. In the early 1990s, it was esti- mated at 700,000. Party organization remained centralized as of the early 1990s. The main links between rank-and-file members and party leaders are the activists known as Vertrauenspersonen, who personally collect annual membership dues. At the local level, the SPO is represent- ed by almost 4,000 groups in villages and towns. Every two years, the SPO holds a federal conference that elects the party executive, which has sixty-five members. Because of the executive's unwieldy size, a smaller group, known as the presidium, is selected from it and actually conducts most party business. Delegates to the federal conference are drawn from the various suborganizations of the party. The party has two youth organiza- tions, the Young Generation (Junge Generation — JG) and the So- cialist Youth of Austria (Sozialistische Jugend Osterreichs — SJO). The Group of Socialist Trade Unionists (Fraktion Sozialistischer Gewerkschaftler — FSG) sends fifty- two delegates to the conference. There is also a Women's Committee, which has representatives from each province. Over the years, women have consistently made up one-third of the SPO's membership. In 1985 the federal con- ference passed an amendment providing for greater representation of women in the party and larger numbers of female candidates. Progress toward this goal has been slow, however, and in 1989 only eleven of the SPO's deputies in the Nationalrat were female. SPO candidates for parliamentary elections are determined by the Party Council, whose members come from the nine provincial party organizations. The party executive and the heads of the nine provincial parties have an input into the selection process. Roughly one-fifth of the places are reserved for high-ranking party officials, whose presence in the Nationalrat is considered imperative. The Austrian People's Party The Austrian People's Party (Osterreichische Volkspartei — OVP) was created in Vienna in 1945 by leaders of the former Chris- tian Social Party (Christlichsoziale Partei — CSP). The founders of the OVP made sure that the new party was only loosely tied to the Roman Catholic Church, unlike its predecessor. The OVP 194 Government and Politics emerged as a conservative, democratic party based on Christian values that sought to include diverse interests. From 1945 to 1966, OVP politicians filled the post of chancellor in a series of grand coalition governments with the SPO (from 1945 to 1947, KPO members were also in the cabinet). From 1966 to 1970, the OVP ruled alone and thereafter entered a long period of opposition to the SPO, which ended in early 1987 when the two parties formed a new coalition government (see table 15, Appendix). The OVP periodically has revised its party program. During the 1945-55 period, the party advocated low taxes, reduced govern- ment expenditures, a balanced budget, and low wage increases. The OVP favored a limited government role in the economy. Af- ter much debate, in 1965 the party adopted the Klagenfurt Manifesto, which referred to the OVP as an "open people's party" of the "new center. ' ' The manifesto laid less emphasis than previ- ous ones on the priority of personal property in a democracy. It also stressed the importance of expanding economic welfare and educational opportunities for all social groups. After suffering losses in the 1970 parliamentary election, the OVP entered the opposition for the first time. A wide-ranging discus- sion of principles took place at all levels of the party. The outcome of this process was the 1972 Salzburg Program, which described the OVP as a "progressive center party" dedicated to integrating Austria's different social groups. The program reaffirmed the party's commitment to a free and independent country, a multiparty democracy, and a social market economy combining free enter- prise and some government intervention. As of 1993, the Salzburg Program had not been replaced as the basic statement of OVP ide- ology. The OVP had a less centralized form of party organization than the SPO as of the early 1990s. At the top is the party presidium, composed of the party chairman, the chancellor and vice chancel- lor (if they are members of the OVP), the general secretary, up to six deputies to the chairman, the leader of the party's parliamen- tary faction, and eight additional members drawn from the provinces and interest groups affiliated with the party. The party holds a national conference at least once every three years. Roughly 600 delegates from the provinces and the party's auxiliary organi- zations attend the conference, which elects the party chairman, the deputies, and the general secretary. The auxiliary organizations play important roles in the OVP's internal workings. The key organizations are the League of Aus- trian Workers and Salaried Employees (Osterreichischer Arbeiter- und Angestelltenbund — OAAB), the League of Austrian Business 195 Austria: A Country Study (Osterreichischer Wirtschaftsbund — OWB), and the League of Aus- trian Farmers (Osterreichischer Bauernbund — OBB). These or- ganizations represent the OVP in the chambers of labor, commerce, and agriculture, respectively. Until 1980 the leaders of these three groups were automatically placed on the party presidium. However, this practice was abandoned after many party members complained about undue influence by interest groups over OVP affairs. This reform was yet another indication of the erosion in the influence of the traditional Lager over Austrian society. The majority of OVP members acquire party membership in- directly via one of the auxiliary organizations. Because of indirect membership, it is difficult to arrive at a precise figure for total mem- bership in the OVP. At the beginning of the 1990s, the combined membership of the three leagues was about 800,000. Adding to this figure members of the women's, youth, and senior organiza- tions, a total membership of 1.2 million was attained. However, the OVP's actual membership was about one-third smaller than this because many individuals belonged to more than one league or subgroup. The independence of auxiliary organizations affiliated with the OVP means that there is a fairly high degree of intraparty disagree- ment over policies compared with the SPO and other Austrian parties. One major cleavage exists between the OAAB, which represents the interests of working people in the OVP, and the OWB, which speaks for business interests. The farmers' group, the OBB, has clashed with the OWB over the issue of whether Aus- tria should join the European Union (EU — see Glossary). Ten- sions between the wings of the party remained high even in the early 1990s, despite numerous party wide discussions of ideology designed to bring about consensus. Some experts believe that the cohesion of the Catholic-conservative Lager will be endangered if the OVP does not achieve a higher degree of party unity than that prevailing in 1993. Alois Mock, who comes from Lower Austria, one of the party's strongholds, held the position of party chairman from 1979 to 1989. As the party struggled with declining vote totals, many in the OVP concluded that his uncharismatic leadership style was a hindrance to a recovery at the polls. Mock withstood pressure for his ouster after the party's poor performance in the national election of 1986, and his stature temporarily increased when he became vice chan- cellor and foreign minister in the coalition government formed in early 1987 with the SPO. Discontent with Mock resurfaced quickly, however, and there were also disturbing signs of party disunity. 196 Government and Politics After the heavy losses incurred by the OVP in the provincial elec- tions in the spring of 1989, Mock's opponents pressed again for his resignation. At an emergency summit in April 1989, Mock was finally convinced to step down as party chairman. He also relin- quished the post of vice chancellor. His replacement in both posi- tions was Josef Riegler, a member of the OBB from Styria. Riegler had served as agriculture minister between 1987 and 1989 and was known as a consensus seeker who would be able to get along well with the SPO. Riegler was also interested in develop- ing new approaches to environmental problems, and many in the party hoped this would help the OVP regain some of the voters who had deserted it for the environmental, or Green, parties. However, the devastating results of the October 1990 national election, in which the OVP's share of the vote declined by 9 per- cent, proved that the party's problems went much deeper than who held the post of party chairman. In May 1991, Riegler decided not to run again for the party chairmanship. Erhard Busek, a well- known OVP politician who had headed the party's Vienna branch between 1976 and 1989, won the election to succeed Riegler. At the same time, the party conference voted to reduce the number of the chairman's deputies from six to two, a sign that party mem- bers wanted to curb the influence of the interest groups. The Freedom Party of Austria The Freedom Party of Austria (Freiheitliche Partei Osterreichs — FPO) was founded in 1956 by Anton Reinthaller, who had served in the national socialist government of Arthur Seyss-Inquart formed in collaboration with Hitler after the Anschluss in 1938. Anticleri- cal and pro-German, the FPO was the party of persons who were uncomfortable with the domination of Austrian politics by the "red- black" (socialist-clerical) coalition governments of the SPO and OVP. The party had liberal and nationalist wings, which frequently disagreed over strategy. Although the FPO was not an extremist party, it attracted many former Nazis with its philosophy that Aus- trians should think of themselves as belonging to a greater Ger- man cultural community. The FPO's stress on nationalism made it an atypical liberal party. Nevertheless, in 1979 the FPO was admitted to Liberal Interna- tional, the worldwide group of liberal parties. The FPO's ideology emphasized the preservation of individual liberties in the face of the growth of the state's power. The party enthusiastically endorsed free enterprise and individual initiative and opposed a larger role for the state in the ownership of enterprises. The FPO was also 197 Austria: A Country Study against the socialist idea of striving for greater equality among socioeconomic groups. After Reinthaller's death in 1958, Friedrich Peter became the head of the FPO. Under his leadership, the liberal wing increased its influence, and ties to the SPO were developed. However, the FPO remained a minor party with a limited opposition role in the parliament. Between 1956 and 1983, the FPO's share of the vote stagnated between 5.0 and 7.7 percent. After the election of 1970, the FPO struck a deal with the SPO, which promised electoral re- form in exchange for the FPO's support of Kreisky's minority government. The ensuing changes in the electoral laws helped the FPO increase its representation in parliament in subsequent elec- tions, despite the fact that its vote totals did not rise at the same time. Peter's hope that he could make the FPO attractive to the SPO as a coalition partner was dashed by Kreisky's success in ob- taining absolute majorities in the elections of 1971, 1975, and 1979. It was only in 1983, when the SPO lost its majority, that it turned to the FPO to form a government. The FPO's brief three-year ex- perience in power in the SPO-FPO coalition of 1983-86 was mostly frustrating, as the government stumbled from one crisis to the next. Norbert Steger was FPO party chairman between 1980 and 1986. A member of the party's liberal wing, Steger served as vice chan- cellor and minister for trade in the SPO-FPO coalition. He was not a charismatic politician, and, as the coalition's troubles mounted, he began to lose support among the party's rank and file. At an FPO convention in the spring of 1986, Jorg Haider, leader of the Carinthian branch of the party, launched a successful coup against Steger and became the new chairman. Haider, born in 1950, is a handsome, dashing figure whose self- confidence strikes many observers as verging on arrogance. He comes from the nationalist wing of the party and has stirred con- troversy on many occasions by his remarks about Austria's proper place in the German cultural community. On one occasion in 1988, Haider referred to Austria as "an ideological deformity." Since Haider took control of the FPO in 1986, the party has achieved dramatic gains at the polls in both national and provin- cial elections. In the March 1989 provincial election in Carinthia, the FPO displaced the OVP as the second strongest party, and Haider was elected governor of the province with votes from the OVP. This election marked the first time that a provincial gover- nor was not from either of the two major parties. Haider's term as governor was cut short in June 1991 by the controversy unleashed by his remark during a parliamentary debate that the Third Reich's employment policy was a positive model. The OVP and SPO joined 198 Government and Politics together to pass a vote of no confidence against Haider, marking the first time in the history of the Second Republic that a gover- nor was forced to step down. Haider did not allow this setback to create challenges to his leadership of the party. In three provincial elections in the fall of 1991, Haider led the FPO to outstanding showings, proving that Austrian voters were increasingly ready to vote for alternatives to the two major parties. A less charitable interpretation of the FPO's rise under Haider is that Austrian politics has taken a turn to the right. At times in his career, Haider has given his critics ample reason for accusing him of neo-Nazi tendencies. He has frequently pandered to the sentiments of the far right, but his everyday political discourse is more moderate. Haider tailors his remarks to his audiences, and he resorts to the rhetoric of right-wing populism in order to in- spire the conservative nationalists in the FPO. A major element in Haider's prescriptions for Austria is his desire to cut down drastically on the number of foreigners allowed to live in the country. Haider consistently argues that immigration is ex- cessive and is causing serious problems for Austrian citizens in the areas of jobs and housing. Haider's campaign against foreigners was a major reason for the passage of a 1991 law that decreed that foreign workers could not make up more than 10 percent of the work force. In 1993 this ceiling was reduced to 9 percent when a new law, the Resident Alien Law, went into effect. Early in the same year, Haider sponsored a referendum to further tighten the control over the number of foreigners in Austria. Although he got only half of the 800,000 signatures he sought, the language Haider used in his campaign was extreme enough to cause large counter- demonstrations. The tensions between Haider and the liberal wing of the party caused five FPO members of the Nationalrat to leave the party in early 1993 and form a new party, The Liberal Forum (Das Li- berate Forum). Led by the FPO's 1992 presidential candidate, Heide Schmidt, the group won seats in the Upper Austria provin- cial elections of May 1993. The new party was also recognized by Liberal International, which was expected to expel Haider's FPO from its ranks in 1994 because it advocated policies incompatible with traditional European liberalism. Despite these setbacks, Haider is expected to remain a formida- ble force in Austrian politics. His sense for the issues that trouble many voters and his ability to enunciate views too extreme for the larger parties will likely win him a substantial following during the rest of the 1990s as the country struggles to adapt to post-Cold War conditions. 199 Austria: A Country Study Membership in the FPO is direct (there is no tradition of join- ing an organization affiliated with the party, as with the SPO). The party's membership grew from 22,000 in 1959 to 40,000 in 1990. The membership- voter ratio declined as the party made dra- matic gains at the polls. The FPO's share of the vote in national elections tripled between 1983 and 1990, when it achieved 16.6 percent. The FPO has a strong base of support in the provinces of Carinthia and Salzburg. The party draws much of its support from the middle class, salaried employees, and the self-employed. More than 60 percent of its voters are under the age of forty-four, and many are well educated. The party has few auxiliary organi- zations, in comparison with the OVP and the SPO. In addition to an organization for people in business, it has groups for aca- demics, students, and retired persons. The FPO's party structure is decentralized, and provincial organizations play an important role in party affairs. The party chairman, who is elected by the party conference, chooses the party manager and general secre- tary. The general secretary acts as a liaison between federal lead- ers and provincial organizations. The Green Parties Another clear sign that the Austrian party system is loosening up was the emergence during the early 1980s of organized environ- mental, or Green, parties. A major catalyst in the birth of the Green movement in Austria was the narrow defeat of the November 5, 1978, national referendum on nuclear energy. The Kreisky govern- ment, seeking to build a nuclear power plant in Zwentendorf near Vienna, decided to let the people decide on the question of nuclear energy (see Domestic Issues, ch. 1). The victory of the antinuclear forces encouraged environmen- tal activists to run in local elections, and in 1982 two national Green parties were formed. The more moderate of the two, the United Greens of Austria (Vereinigte Griine Osterreichs — VGO), had a strong commitment to working within the existing political system to change environmental policies. The Alternative List of Austria (Alternative Liste Osterreichs — ALO), founded in 1982 on the fourth anniversary of the Zwentendorf referendum, was more willing to challenge the political status quo. In addition to championing radi- cal changes in environmental policy, the ALO also advocated a guaranteed national income, a thirty-five-hour workweek, and great- er government ownership in certain areas of the economy. The prospects of the Green parties are limited by their frequent inability to form alliances for the purpose of contesting elections. When the ALO and VGO have campaigned on a common ticket, 200 Government and Politics they usually have won seats in parliament. In 1983, the first na- tional election in which the Green parties participated, the two groups ran on separate lists, and both failed to gain representa- tion in the Nationalrat. The Green cause received a strong boost in 1984 from the confrontation between the SPO-FPO government and environmental activists opposed to the plan to build a hydro- electric plant in a wetland forest at Hainburg in eastern Austria. The government backed down from its plan, and the incident led to an increase in support for the Green parties from disillusioned SPO voters, intellectuals, and others with strong views on the en- vironment. Green activist Freda Meissner-Blau ran in the May 1986 presi- dential election, taking a surprising 5.5 percent of the vote, which necessitated a runoff between the OVP and SPO candidates. Encouraged by this showing, the ALO and VGO, after long nego- tiations, agreed to participate in the November 1986 national election on a single list, named the Green Alternative — Freda Meissner-Blau List. The Green Alternative took 4.8 percent of the vote and won eight seats in parliament. This marked only the second time in the history of the Second Republic that a fourth party had entered the Nationalrat. (The KPO had been in the parliament between 1945 and 1959.) The harmony between the two groups was short-lived, however, as they clashed over how to divide the federal financing that became available to the Green movement. In the 1990 national election, the VGO put up its own list of candidates, and the ALO ran as the Green Alternative/Greens in Parliament (Griine Alternative/Grime in Parlament — GAL). The VGO polled only 1 .9 percent of the vote and failed to win any seats. The GAL took 4.5 percent of the vote and increased the number of Green deputies to ten. As of the early 1990s, the future of Green politics in Austria re- mained uncertain because of the strong differences between the GAL and VGO over political strategy. The VGO was committed to developing a centralized party structure along the lines of the OVP and SPO, while the GAL preferred to allow complete au- tonomy for its affiliated organizations in the provinces. There were also questions about the longevity of the Greens' appeal to voters. Studies indicated that only 50 percent of Green voters had close ties to a Green party, and roughly 35 percent of Green votes came from floating voters who had abandoned the two major parties. However, many Austrians felt a lack of confidence in the abilities of the OVP and SPO to fashion constructive policies, and as long as this doubt persists, the Green parties will have opportunities to elect deputies to parliament. 201 Austria: A Country Study Political Developments since 1983 In 1983 a thirteen-year period of single-party rule by the SPO came to an end. The period had been dominated by Bruno Kreisky, who served as chancellor for the entire time (see The Kreisky Years, 1970-83, ch. 1). With Kreisky as its leader, the SPO had emerged from the election in 1970 as the strongest party. This election marked a turning point in Austrian history because never before had a socialist party been given such a mandate by the voters. The outcome was conclusive proof that most Austrians had lost their fear of the SPO's being too leftist to govern alone. SPO-FPO Coalition, 1983-86 In the election of 1983, the SPO lost its absolute majority in the Nationalrat, although it remained the largest party (see End of the Kreisky Era, ch. 1). Kreisky fulfilled his pledge to resign as chan- cellor if the SPO lost its undisputed position in parliament. Fred Sinowatz, a rather colorless figure who had been minister for edu- cation under Kreisky, was selected as the new chancellor. The SPO decided to form a coalition with the FPO, marking the first time ever that the FPO had joined the government. Norbert Steger, the moderate chairman of the FPO, was named vice chancellor and minister for economic affairs, and other members of his party be- came minister for defense and minister for justice. The SPO-FPO coalition lasted only three years and was not very productive. It faced a series of crises that never allowed it to become firmly established. Although the coalition had made progress on environmental protection a high priority, its decision to build a hydroelectric plant at Hamburg in a wetland forest east of Vienna provoked a storm of opposition from environmental ac- tivists. In the end, the government decided to cancel the project (see The Green Parties, this ch.). The coalition's image received another black mark in 1985 when FPO Minister for Defense Friedhelm Frischenschlager staged a wel- coming ceremony at the airport for Walter Reder, a former Waffen SS member who had been serving a life sentence for executing civilians during World War II before being pardoned by the Italians. Some SPO members of the cabinet threatened to resign over this affair, but Frischenschlager was allowed to remain in his post. This incident hurt the SPO's standing among its own mem- bers, as well as among independent voters. Austria received further unpleasant jolts in 1985. First came the news that diethylene glycol, a chemical used in antifreeze, had been 202 Government and Politics added to Austrian wines in potentially lethal amounts. The wines affected came from Burgenland, the home province of Chancellor Sinowatz. Even more damaging to the country's self-image, however, was the crisis in the state-run industrial sector that came to light at roughly the same time. The government announced that it had uncovered a financial scandal at the United Austrian Iron and Steel Works (Vereinigte Osterreichische Eisen- und Stahlwerke — VOEST; commonly known as VOEST-Alpine) in Linz. Public funds were required to cover large losses incurred through risky and unauthorized speculation in oil ventures. Moreover, the entire state industrial sector required streamlining, and jobs had to be cut. The method of staffing these industries was a prime example of the OVP and SPO's Proporz system, which created fiefdoms in which political affiliations were the main criteria for filling high-level management positions. The crisis in this sector of the economy re- vealed that the Kreisky governments had been guilty of serious mis- management. The confidence of the SPO in particular was shaken as it faced the need for privatization and layoffs. The government abolished the Proporz system at VOEST-Alpine and appointed new management to rectify the problems. Election of Kurt Waldheim as President In 1986 Austrians prepared to elect a new president. The race featured two major candidates, Kurt Waldheim for the OVP and Kurt Steyrer for the SPO, plus two less well-known candidates, a Green party activist and a former member of the FPO. Wald- heim was one of Austria's best known citizens by virtue of his having served two terms as secretary general of the United Nations in the 1970s. Waldheim had joined the OVP only in early 1985 when the party decided to offer him its presidential candidate's spot. He was presented to the voters as "the man the world trusts." Steyrer was the minister for health and the environment in the SPO-FPO government. His campaign stressed his role as a family man and a humanitarian. The 1986 presidential campaign would have taken place without many people outside Austria taking note of it, except that it focused on an issue that proved extremely sensitive for audiences inside and outside of the country. In March 1986, Profit, a Vienna-based magazine specializing in investigative reporting, began to publish a series of articles claiming that Waldheim had left out crucial de- tails about his service in the army, the German Wehrmacht, dur- ing World War II. In an autobiography published a few months before, Waldheim had glossed over most of his wartime service, 203 Austria: A Country Study alleging that he had spent much of the war in Vienna studying law while recuperating from wounds he had received. Profit, foreign newspapers, and the World Jewish Council in New York unearthed evidence that Waldheim had spent considerable time on duty in the Balkans and in Salonika, Greece. The German army had car- ried out brutal occupations of these areas, murdering thousands of Yugoslav partisans and deporting Greek Jews to the concentra- tion camps in Central Europe. Waldheim, while not accused of personally participating in any atrocities, made the unbelievable claim that he had not heard of any misdeeds by the German armed forces in the Balkans or Greece until he had read the current newspaper accounts. He stuck by his account that he had been on leave when atrocities were committed, and he defended himself by saying he "had only done his duty as a soldier." As the scrutiny of Waldheim intensified, Austrians became pola- rized over whether to defend or criticize him. Many older Austri- ans, particularly those who had served in the German army, agreed with his self-defense that he had merely done his duty in a war that Austria had not wished for. Others became more suspicious of Waldheim when documentary evidence was produced suggest- ing that he may have joined the Nazi Party to further his chances for a diplomatic career. The presidential campaign degenerated into a mudslinging affair, and the OVP launched attacks against the character of the SPO candidate. Despite the furor surrounding him, on May 4, 1986, Waldheim outpolled Steyrer by 49.7 to 43.7 percent. He fell only 16,000 votes short of the absolute majority required for victory, and thus a runoff between the two top candidates was scheduled for June 8. Wald- heim won the runoff handily, garnering 54 percent of the vote. Steyrer' s candidacy had been handicapped by his membership in a government burdened by financial mismanagement of state in- dustries and other scandals. Waldheim benefited from a wave of sympathy from certain segments of the Austrian electorate, who viewed him as a victim of unfair attacks. The Waldheim presidency proved to be a major burden for Aus- tria. In April 1987, after a one-year study of the matter by the Unit- ed States Department of Justice, the United States placed Waldheim on its ' 'watch list' ' of undesirable aliens. The department had con- cluded that there was "a prima facie case that Kurt Waldheim as- sisted or otherwise participated in the persecution of persons because of race, religion, national origin, or political opinion." Waldheim became the first active chief of state ever to be placed on the list of 40,000 subversives, terrorists, and criminals. Waldheim became isolated internationally and found support only from the Soviet 204 Government and Politics Union, some of the communist governments of Eastern Europe, and Arab states such as Jordan, one of the few countries he was to visit during his presidency. In June 1987, the Viennese branch of the SPO passed a resolu- tion calling for Waldheim to resign. Chancellor Vranitzky and Sino- watz, the chairman of the SPO, defended Waldheim, arguing that he had been elected democratically. Strains were beginning to appear within the OVP-SPO coalition over the affair, and some- how a resolution needed to be brought about. In an effort to achieve this resolution, the Austrian government announced that it would appoint an international panel of historians and human rights ex- perts to examine the whole matter. The panel presented its findings in February 1988. The panel found no direct evidence that Waldheim had participated in war crimes during his military service in the Balkans and Greece. However, it concluded that he must have had some knowledge that atrocities were taking place. Predictably, Waldheim took the panel's report as his exoneration, as did most OVP leaders. The presi- dent gave a speech in which he said he believed it to be in the best interests of Austria that he remain in office. The release of the panel's report came one month before the fiftieth anniversary of the Anschluss of March 1938. At a public commemoration of this event in Vienna, Vranitzky solemnly in- formed the Austrian people that it was time for all of them to face up to the fact that their country had been not only the first victim of Nazi aggression but also a participant in Hitler's military con- quests. Waldheim gave a television address in which he described the Holocaust as one of the greatest tragedies of history and ad- mitted that Austrians had played a role in it. He condemned fanati- cism and intolerance and expounded on Austria's dual role as victim and culprit. For Waldheim 's critics, it was a respectable perfor- mance, but woefully late. Austrian emotions had been rubbed raw by the Waldheim affair, but at least it presented Austrians with an opportunity to discuss openly issues that had effectively been taboo for fifty years. The National Election of 1986 and the Grand Coalition of 1987-90 The election of Waldheim had a large impact on Austrian domes- tic politics as well. After Waldheim 's victory, Sinowatz, the SPO chancellor who had been perceived as ineffective, resigned, and the SPO turned to Franz Vranitzky to fill the top position. Vra- nitzky decided to dissolve the SPO-FPO coalition when the lead- ership of the junior party was usurped in September 1986 by Jorg Haider. Haider was prone to making controversial remarks 205 Austria: A Country Study about Austria's place in the greater German cultural identity, and Vranitzky had little hesitation in cutting the SPO's ties to the FPO under its new leader. This action led to a premature parliamen- tary election in November 1986. Pressures for an early election also came from the financial failures in the state industrial sector that had embarrassed the SPO-FPO government. The outcome of the election was a shock to both major parties, as the FPO attained its highest vote total since 1953, receiving 9.7 percent. The SPO lost ten seats in the Nationalrat, dropping to eighty, and the OVP lost four, declining to seventy-seven. After lengthy negotiations, in early 1987 the two major parties decided to form a grand coalition for the first time since 1966. Vranitzky remained chancellor, and Alois Mock, leader of the OVP, became vice chancellor and foreign minister. The two parties agreed to split the remaining cabinet posts, with the Ministry for Justice going to a person with no party affiliation. Former Chancellor Kreisky complained loudly about Vranitzky 's giving the foreign ministry portfolio to the OVP, and he resigned as honorary chairman of the SPO in protest. The new grand coalition was not able to function in the cozy way the old grand coalition had because media scrutiny was much greater in the 1980s than it had been between 1945 and 1966. Fur- ther, one of the coalition's top priorities was to address the problems in the state industrial sector and the budget deficit in general. The government carried out job cutbacks and early retirement programs at VOEST- Alpine, the state-run iron and steel conglomerate, and also reduced subsidies to farmers. These policies hurt key interests of both parties' core constituencies, but OVP and SPO leaders saw little alternative to tackling these problems head on. Austrian po- litics had entered a new stage that was short on the optimism of the Kreisky era and focused on pragmatic and hard-headed solu- tions to economic problems. The OVP- SPO government benefited from improving economic conditions, especially from 1988 onward. Economic growth for the years 1988-90 averaged around 4 percent annually. Other economic indicators were also positive, with unemployment averaging around 5 percent and inflation running at 2.5 percent. In the political realm, however, the coalition was plagued by numerous scandals involv- ing primarily high-ranking officials of the SPO. In late 1988 and early 1989, two of these officials were forced to resign for large- scale tax evasion. Chancellor Vranitzky, who had replaced Sinowatz as party chairman in May 1988, initially was hesitant to fire his friend Gunther Sallaberger, who had failed to pay taxes on SI. 8 million (for value of the schilling — see Glossary). Pressure to remove 206 Government and Politics Sallaberger became intense after party members were shocked to learn that he was an example of a trend in which holders of multi- ple posts within the SPO were actually earning more money than the chancellor. An even larger scandal emerged when the SPO became embroiled in an insurance scandal centering on Udo Proksch, the notorious former owner of Demel's, Vienna's most famous coffee house and meetingplace for SPO bigwigs. A ship commissioned by Proksch, the Lucona, had sunk in 1977 with the loss of six crew members. Proksch claimed that the ship had been carrying a uranium process- ing plant, but documents describing the ship's cargo were found to have been forged, and Proksch was accused of deliberately sinking the vessel. The investigation into the affair moved at a snail's pace. By early 1989, a parliamentary committee that had been formed to look into the case began to focus on two leading SPO officials, Minister for Interior Karl Blecha and Leopold Gratz, the first presi- dent of the Nationalrat. The committee's investigations provided some of the most dra- matic political theater ever seen in the Second Republic. After tough cross-examinations of subordinate officials, the committee and the public began to suspect that Blecha had deliberately slowed up the Lucona investigation in the early 1980s. Blecha' s denials of any wrong- doing were unconvincing, and Vranitzky forced him to resign. Gratz, who had been foreign minister at the time the forged docu- ments relating to the Lucona 's cargo had arrived in Vienna, was suspected of even greater complicity in the affair. As the commit- tee did its work, it appeared increasingly clear that Gratz had cov- ered up important details of the affair to protect Proksch. Gratz resigned his position when, like Blecha, he had lost all support with- in the SPO. In the face of a very bleak ethical situation, Vranitzky could at least claim that he had acted relatively quickly to clean house. The Parliamentary Election of 1990 The OVP and SPO approached the parliamentary election of 1990 with trepidation. In 1989 the political landscape had been shaken by Haider's FPO, which had racked up impressive gains in provincial elections in Carinthia, Salzburg, and Tirol. Even though questions had been raised about Haider's honesty, he con- tinued to entice voters to leave the major parties. The FPO scored a spectacular success in Carinthia, where it displaced the OVP as the second largest party, and it caused the OVP to lose its abso- lute majority in Salzburg. 207 Austria: A Country Study In the October 1990 national election, the FPO again shocked the political establishment by increasing its share of the vote from 9.7 to 16.6 percent. This gain came almost completely at the ex- pense of the OVP, whose share of the vote declined from 41.3 to 32. 1 percent. The SPO's share of the vote remained essentially the same, which surprised everyone. The party, realizing that its strong suit was the popularity of Vranitzky, employed a new electoral strategy that probably explains its ability to avoid the OVP's fate. With Vranitzky as the top candidate in all nine electoral districts, the SPO urged voters to cast preference votes for Vranitzky, which could be done without selecting the SPO box on the ballot (these votes would count toward the SPO's total number of seats in the Nationalrat, however). A nonpartisan committee was organized to carry out this campaign, and it succeeded in attracting sup- port from sources that otherwise might not have voted for the SPO in the regular manner. Because of disagreements between the two Green parties, they did not run on a united ticket as they had in 1986. The Green Alternative/Greens in Parliament (Griine Alternative/Grime in Parlament — GAL), formerly known as the Alternative List of Austria, received 4.5 percent and increased its seats in the parliament from eight to ten. The United Greens of Austria (Vereinigte Griine Osterreichs — VGO) received only 1.9 percent and won no seats. Given the antipathy that Vranitzky felt for Haider, there was no chance of a revival of an SPO-FPO coalition. After a period of negotiations, the SPO and OVP agreed to continue the grand coalition. Because economic conditions were much improved in comparison with 1986, the new coalition planned to focus on is- sues such as social welfare, health care, science, and research. Attention would also be given to reforming the country's electoral system and its chambers of commerce and labor. Increasing num- bers of Austrians regarded the former as unrepresentative and resented the latter' s requirement of compulsory membership. The coalition partners decided to upgrade the position of state secre- tary for women's affairs to full cabinet rank, and the new Minis- try for Women's Affairs was created to oversee these matters. Events of 1991-93 The trend toward the dissolution of the two-party system was confirmed by the outcomes in four provincial elections held in 1991 . The FPO increased its share of the vote in all four elections, and in Styria and Upper Austria it tripled its vote to 15.4 and 17.7 percent, respectively. In Vienna the FPO displaced the OVP as the second most powerful party in the provincial legislature, a 208 Government and Politics particularly embarrassing result for the OVP. The OVP lost ground in all four elections, while the SPO lost seats in three elections. With its showing in Vienna, the FPO became the second strong- est party in two of Austria's nine provinces, having achieved the same status in Carinthia in 1989, also displacing the OVP. In June 1991, President Kurt Waldheim announced that he would not seek reelection in 1992. OVP leaders were relieved that Waldheim had decided to retire from politics because they feared the eruption of another bitter controversy over his wartime record if he had chosen to run. Waldheim became the first incumbent Aus- trian president not to seek reelection. Initially, the OVP and SPO looked into the possibility of nominating a joint candidate for the 1992 election. However, the two parties were unable to agree on a candidate, and in November 1991 they and the FPO each an- nounced separate candidates. The OVP selected Thomas Klestil, a career diplomat and former ambassador to the United States. The SPO candidate was Rudolf Streicher, head of the Ministry for National Industry and Transportation. The FPO candidate was Heide Schmidt, who was also third president of the Nationalrat. The Green candidate was the scientist Robert Jungk. No candidate was able to win an absolute majority in the first balloting on April 26, 1992. Streicher polled 41 percent, compared with Klestil' s 37 percent, but far ahead of Schmidt's 16 percent and Jungk's 6 percent. In the run-off elections four weeks later, when only the top two candidates were on the ballots, Klestil scored an easy victory over Streicher with 57 percent of the total vote. Controversy about his opponent's war record, a series of scandals connected to the SPO, and Klestil' s skill in dealing with the me- dia contributed to his easy victory in the second round of voting. Perhaps most important, however, was his career as a diplomat abroad, which had kept him out of politics (although he was an OVP member) and made him seem well suited for leading the coun- try into the post-Cold War era. The collapse of the Soviet empire and the former Yugoslavia in- creased the number of foreigners coming to Austria. The influx of asylum seekers and illegal immigrants posed a challenge to Aus- trian authorities. In 1992 and 1993, new laws went into effect that sought to reduce the number of those coming to the country for asylum and to more strictly control the large foreign community already present in Austria. The laws resulted both from serious practical problems of caring for foreigners in need of food and fears of many Austrians that their country was in danger of Uberfrem- dung, that is, being submerged by ever-increasing waves of foreign 209 Austria: A Country Study immigrants. Some politicians, most notably Haider, sought to profit politically from these fears. In early 1993, a referendum sponsored by Haider was held to determine popular support for further tightening the laws regulat- ing foreigners. More than 400,000 signatures were collected, half of what Haider had sought but still a significant response. Large counterdemonstrations were held to protest Haider's suggested poli- cies, but it was clear that Haider had tapped into widespread fears and resentments. Haider's extremism resulted in some FPO mem- bers leaving the party and forming their own party, The Liberal Forum (Das Liberale Forum). Led by Heide Schmidt, the FPO presidential candidate in 1992, the group won three seats in the May 1993 Landtag election in Upper Austria. Additional success- es for the new party were its being recognized both by the National- rat as a political party and by Liberal International. Apprehension about joining — or not joining — the European Union (EU — see Glossary) was another force driving Austrian politics. As the economy slumped and headed to an overall negative growth rate for 1993, Haider modified his previous endorsement of EU membership, sensing a chance to profit from fears about what Aus- tria's participation in a larger Europe might bring. The OVP and SPO remained strongly in favor. After much delay, Austria will join the European Economic Area (EEA — see Glossary) on Janu- ary 1 , 1994. The EEA will then consist of EU and European Free Trade Association (EFTA — see Glossary) countries, with the ex- ception of Switzerland, and will form a free-market economy of sixteen nations and 380 million inhabitants. Mass Media The Austrian press operates freely under the constitution of 1920, which guarantees all citizens freedom of expression in speech, writ- ing, and print. The constitution also forbids any government cen- sorship of the press or electronic media. Austria has a well-developed system of print and electronic media that provides its citizens with a wide variety of news sources and entertainment. Newspapers and Periodicals The Austrian newspaper market is one of the most concentrated in Europe. Three dailies, the Neue Kronen- Zeitung, Taglich Alles, and Kurier, account for more than half of the newspapers sold in the country. By 1993 their daily circulations were 1.1 million, 500,000, and 390,000, respectively, with higher circulations on Sundays. All three specialize in tabloid- style journalism, with a tendency toward sensationalism. Better educated Austrians, especially in the 210 Government and Politics larger cities, read either Die Presse or Der Standard, both high-quality newspapers published in Vienna with circulations of less than 100,000. As of the early 1990s, a total of seventeen daily newspapers were published in Austria, and thirteen regional editions of some of these papers were published. Since the early 1970s, the importance of political party newspapers has declined precipitously. The SPO pub- lishes one newspaper and the OVP two, all of which have circula- tions of less than 100,000. The SPO's venerable newspaper, Arbeiterzeitung, established in 1895, was sold to private interests in the late 1980s when the party decided it no longer wished to cover the newspaper's massive losses. Austria also has many periodicals and magazines. Among the weekly periodicals, Profit, with a circulation of more than 100,000 in 1993, has emerged as one of the best practitioners of investiga- tive journalism in the country. Another weekly magazine, News, has a circulation of more than 200,000, although it was only founded in October 1992. Other periodicals of note include Wochenpresse, a weekly; Trend, a monthly journal devoted to economic news; and Wiener, a monthly. Rising concern over financial difficulties faced by small publishers led the Austrian government to decide in 1975 that subsidies should be made available to newspapers and magazines meeting certain criteria. For a daily newspaper to receive government funds, it must have a minimum circulation of 10,000 and regional distribution. Weekly newspapers are required to have a minimum circulation of 5,000. Magazines are eligible for funds if they publish between four and forty issues a year. To be considered for funding, a newspaper or magazine must file a formal application with the government. Specific allocations are decided on a case-by-case basis, and various formulas are used to spread the funds among a large number of publications. No single newspaper can receive more than 5 percent of the total budget earmarked for support of the daily press. In 1982 Austria brought its press laws up to date with the pas- sage of the Federal Law on the Press and Other Journalistic Me- dia, which clarifies the rights of individuals to sue for damages when they believe they have been slandered or defamed by the press. The law establishes maximum amounts of S50,000 for defamation of character and SI 00, 000 for slander. The law stipulates that damages are not to be awarded if it can be shown that the public interest was served by the publication of the material or of allega- tions in dispute. The law also grants individuals and corporations the right to respond in print to published reports they regard as 211 Austria: A Country Study defamatory. However, a newspaper can refuse to publish a rejoinder if it can prove that the report is not factual. Individuals and cor- porations may respond only to factual reporting; articles contain- ing editorial opinions and value judgments are not covered by this provision of the press law. Other provisions of the 1982 law strengthened the rights of jour- nalists. Journalists are guaranteed the right to refuse to collaborate in assignments they regard as incompatible with their ethical con- victions. The law also affirms the right of journalists not to divulge their sources in a court of law. The law further states that the government may not place the communications facilities of an or- gan of the press under surveillance unless it has reason to believe that a crime carrying a sentence of at least ten years may have been committed. Radio and Television As of late 1993, radio and television programming in Austria was provided exclusively by Austrian Radio and Television (Os- terreichischer Rundfunk — ORF). This state monopoly is expected to end in the mid-1990s because such monopolies are no longer seen by many European jurists as compatible with the free exchange of information and ideas. ORF was formed as a public corpora- tion in 1945 and reorganized in 1967 for greater political and finan- cial independence. In 1974 a constitutional law was passed giving ORF complete financial autonomy from the government and guaranteeing it freedom from attempts by the government or any state body to exert influence on programming. Additional laws passed in that year required ORF to present objective reporting, a variety of opinions, and balanced programming. As of 1993, ORF had two television channels and three radio channels. FS 1 and FS 2, the two television channels, feature a wide variety of programs, including news, entertainment, educa- tion, and music. In 1988 the nine regional ORF studios began broadcasting local programs. Various groups attempted to make the case for allowing independent television in Austria, but, as of 1993, they had not persuaded the government to lift the monopo- ly enjoyed by ORF. During the 1980s, cable television became available, and by 1990 roughly 15 percent of Austrian homes received cable programming. One of the major cable programs, 3 Sat, is a joint venture of ORF, the Swiss Broadcasting Corpora- tion, and one of Germany's television networks. ORF has four radio channels. The first channel, Osterreich 1, features culturally oriented programs devoted to music, literature, science, and news. The second channel, Osterreich Regional, carries 212 Government and Politics programming produced by the nine regional ORF stations, with an emphasis on popular entertainment and local events. Osterreich 3 is an entertainment channel, which also carries hourly news broad- casts. The fourth network, Blue Danube Radio, is also an enter- tainment channel but differs in that it broadcasts mainly in English. Its news programs are in German, English, and French. Foreign Relations Since 1955 the guiding principle of Austrian foreign policy has been neutrality. As part of an agreement reached that year with the Four Powers (Britain, France, the Soviet Union, and the United States), Austria passed an amendment to its constitution declar- ing that it would forever remain neutral. Specifically, Austria pledged that it would never join any military alliances or allow for- eign troops to be stationed on its soil. The commitment to neu- trality was seen by virtually all political groups as a sensible step to achieve the complete removal of occupying forces from the country. However, Austria chose to pursue a looser model of neutrality than that followed by other states, such as Switzerland. Austria joined the United Nations (UN) in 1955, shortly after making its neutrality pledge. Austria did not take neutrality to mean that it should occupy a moral middle ground between the democratic coun- tries of the West and the totalitarian states of the East during the Cold War period. In terms of political and social ideology, Aus- tria was firmly within the community of democratic nations. A second important principle of Austrian foreign policy is in- ternationalism. Austria is active in many international organiza- tions, such as the UN and its subsidiary agencies. The country is a long-time participant in UN peacekeeping operations. An Aus- trian medical team served in the Congo (present-day Zaire) be- tween 1960 and 1963, and medical teams and soldiers have served continuously in Cyprus since 1964 and at various times in Egypt and Israel since 1968. Vienna is the home of two UN entities, the International Atomic Energy Agency and the United Nations In- dustrial Development Organization. During the Cold War peri- od, Austria consistendy supported all attempts at fostering detente between the United States and the Soviet Union. Austria's lead- ers pursued this policy because they realized that heightened ten- sions between the superpowers would make the maintenance of their country's neutrality more difficult. Foreign Policy During the Kreisky Era Bruno Kreisky, who had served as foreign minister between 1959 213 214 The Vienna International Center is also known as United Nations City because numerous United Nations offices are located there. Courtesy Embassy of Austria, Washington 215 Austria: A Country Study and 1966, laid great emphasis on an active, internationalist for- eign policy during his tenure as chancellor (1970-83). Kreisky's vision of foreign policy was based on the notion that Austria, as a neutral country, should seek to mediate conflicts between coun- tries and stake out independent and innovative policies on various issues. He offered Vienna as a site for many series of negotiations on nuclear arms reductions and other international matters. Among Kreisky's more controversial policies was his decision to grant informal diplomatic recognition to the Palestine Libera- tion Organization (PLO) in 1980. This was an outgrowth of Kreisky's conviction that Israel was stubbornly refusing to recog- nize the legitimate interests of the Palestinian people. The fact that Kreisky was Jewish gave him a certain credibility in becoming so involved in trying to solve the Arab-Israeli conflict. Kreisky fur- ther surprised the world by receiving Libyan leader Muammar al Qadhafi in Vienna. He also showed his independent approach with his decision that Austria should participate in the 1980 Summer Olympics in Moscow, despite the boycott of the games orchestrat- ed by United States president Jimmy Carter in response to the Soviet invasion of Afghanistan in 1979. Austria also did not ad- here to the economic boycott of Iran organized by the United States after the seizure of its embassy in Tehran in 1979. During the 1970s, Austria collaborated extensively with other neutral and nonaligned countries in the UN. Austria developed an independent voting profile, frequently joining with other neu- trals such as Sweden to press for action on issues ignored by coun- tries belonging to military alliances. Austria also pursued this kind of diplomacy with the nonaligned countries belonging to the Con- ference on Security and Cooperation in Europe. New Focus on Europe After Kreisky's departure from the political scene in 1983, Aus- trian foreign policy became more focused on European matters and less on global issues. This shift was caused partly by the increase in tensions between the United States and the Soviet Union, as United States diplomacy under President Ronald Reagan became more confrontational. In this climate, Austria's room to pursue a foreign policy of mediation was more constricted. Concern that the country faced exclusion from the increasing political and eco- nomic integration of Europe being pursued by the European Com- munity (EC) was another factor that came to exert strong influence on Austrian diplomacy. The traditional concept of Austrian neu- trality had held that membership in the EC was not possible or desirable, even though the EC was not a military alliance. The idea 216 Government and Politics of ceding even limited areas of political and economic sovereignty to a supranational organization was seen as incompatible with neu- trality. As an alternative to the EC, Austria had joined with Britain, Denmark, Norway, Portugal, Sweden, and Switzerland to form the European Free Trade Association (EFTA) in 1960. EFTA was restricted to facilitating trade among its members and did not in- volve the ceding of sovereign powers. Austria also negotiated a spe- cial economic arrangement with the EC in 1972 that allowed for the duty-free exchange of industrial manufactured goods. By the mid-1980s, the opinion of Austria's political elites had changed in favor of seriously considering the advantages and dis- advantages of EC membership. Many argued that Austria could not expect to guarantee its economic future if it remained outside the EC. Two-thirds of Austria's trade was with members of the EC, with the Federal Republic of Germany (West Germany) by far its largest trading partner. There was also a fear that the coun- try could become isolated within Europe as ideological barriers be- tween East and West were lowered. A long period of debate among the major parties over EC mem- bership began in 1987, and the cabinet established a working group to examine the issue. It gradually became clear that, despite some misgivings over the expected impact of EC membership in certain areas, the two major parties, the OVP and SPO, favored apply- ing for entry. The trade unions had some concerns about EC mem- bership's diminishing their strong bargaining powers in the Austrian system of social partnership, but they, too, generally favored join- ing (see Social Partnership, ch. 3). There was also widespread con- cern that the high volume of highway traffic passing through Austria en route to West Germany and Italy was damaging the country's environment (see Ecological Concerns, ch. 2). Many Austrians be- lieved that their country's environmental laws were stricter than those of the EC. The priority of protecting the environment led the Green deputies in parliament to oppose joining the EC. Within the two major parties, there was little concern over the neutrality issue, and government leaders pointed out that although the EC might someday add a military dimension to its structure, for the foreseeable future it would remain primarily an economic union with aspirations of developing greater political unity. The new climate of glasnost in the Soviet Union ushered in by Mikhail Gorbachev led Austrian leaders to expect no objection from Moscow to an Austrian decision to seek EC membership, and this expecta- tion proved true. 217 Austria: A Country Study The government reached an internal consensus in favor of ap- plying for membership in June 1989, and the following month, Foreign Minister Alois Mock delivered the application to the EC Commission in Brussels. Chancellor Vranitzky emphasized to his countrymen that during the upcoming negotiations with Brussels his government would seek clear understandings on the main- tenance of environmental standards and the preservation of Aus- tria's advanced social welfare system. Vranitzky also asserted that the issue of limiting the volume of motor vehicle traffic passing through Austrian territory would be handled separately from the application to join the EC. Austria's application met with a chilly reception from some quarters in Europe, especially from a few poli- ticians who argued that the admission of a neutral country could hinder efforts at coordinating the foreign policies of the EC's mem- bers. However, the momentous events of late 1989 and 1990 — the freeing of Czechoslovakia, Hungary, and Poland from Soviet domi- nation and the unification of Germany — made it clear to all ob- servers that Austrian neutrality would take on a new dimension and might even be jettisoned altogether. The disintegration of the communist system in the Soviet Union in late 1991 further re- inforced the impression that neutrality was of little relevance in the new Europe. In August 1991, after an examination of the Austrian applica- tion, the EC issued an initial assessment that was predominantly favorable. By late 1993, negotiations between Austria and the Eu- ropean Union (EU), the organization's name as of November 1993, were continuing over the terms of membership. Most observers expected that the EU and Austria would be able to reach an agree- ment on Austrian entry and that the country would join the EU in January 1995. The main issues involved limiting international road traffic through Alpine regions because of environmental con- cerns, subsidies for Alpine farming, and foreign ownership of resi- dences in some parts of Austria. A less certain matter was whether the Austrian government could convince a majority of Austrians to support EU membership. The question of joining the EU will be voted on in a popular referendum because any governmental action that changes the constitution must pass this test. Many opin- ion polls taken in the early 1990s showed Austrians evenly divided over the merits of joining the EU. In order to ensure approval by the electorate, the Austrian government will have to gain signifi- cant concessions from the EU in the negotiations and mount an effective public relations campaign in favor of a yes vote. 218 Government and Politics Regional Issues Austria has generally enjoyed good relations with its neighbors, although there have been exceptions. The most notable exception has been its relationship with Italy, which was strained by the issue over South Tirol during the 1960s. This largely German- speaking region, which belonged to Austria- Hungary prior to World War I, was ceded to Italy in 1919 as a result of the peace negotia- tions. Until 1992 ethnic Germans in South Tirol, in the present- day region of Trentino-Alto Adige, had to struggle to maintain the measure of autonomy promised to them by the Italian govern- ment. Acts of terrorism directed against Italian targets became a serious problem in the 1960s, and Italy accused Austria of not do- ing enough to capture terrorists whom it claimed were using Aus- trian territory as a sanctuary. Austria and Italy eventually reached an agreement in 1969 on a timetable for satisfying the demands of the German-speaking South Tiroleans for cultural autonomy. Progress was slow, but in June 1992 an agreement was finally real- ized that granted the German speakers a greater degree of auton- omy. Although not allowed the right to secede from Italy, the cultural rights of German speakers in Trentino-Alto Adige were enhanced with guarantees of education in their own language, great- er representation in the civil service, and the right to go to the In- ternational Court of Justice in The Hague without permission from the government in Rome. Both Italian and Austrian authorities have declared themselves satisfied with the agreement. Austria became concerned as the political stability of its neigh- bor to the south, Yugoslavia, began to unravel in 1991. As it be- came clear that the republics of Slovenia and Croatia were preparing to break away from the Yugoslav federation, a disagreement arose within the OVP-SPO coalition over when to grant diplomatic recog- nition to the new states. In September 1991, Foreign Minister Mock advocated immediate recognition, but Chancellor Vranitzky preferred that Austria wait until other European governments were ready to take the same step. In the end, Vranitzky prevailed in this debate, and recognition was delayed until January 1992, after the EC recognized the newly independent states. On other important aspects of policy toward the breakup of Yugoslavia, greater unanimity existed between the OVP and SPO. Foreign Minister Mock was an early advocate of sending a UN peacekeeping force to prevent bloodshed as the various Yugoslav republics sought to establish their independence. In August 1991, Austria became the first UN member to bring to the attention of the Security Council the fact that large numbers of civilians in 219 Austria: A Country Study Bosnia and Hercegovina and in Croatia were being killed by Ser- bian forces. Despite their deep concern about the tragedy unfold- ing in the former Yugoslavia, both Mock and Vranitzky are in agreement that Austria's neutrality and its proximity to the fight- ing preclude the inclusion of Austrian troops in any UN peacekeep- ing force. * * * During the 1980s and early 1990s, the literature on Austrian pol- itics in English grew considerably. Austria: A Study in Modern Achieve- ment, edited by Jim Sweeney and Josef Weidenholzer, contains a useful collection of articles on Austria's political system and politi- cal parties. Modern Austria, edited by Kurt Steiner, covers roughly the same ground, in some cases in more detail, but is somewhat dated because it was published in 1981. Melanie A. Sully's A Con- temporary History of Austria is an excellent treatment of Austrian pol- itics during the 1980s. It is particularly good on the interaction between the parties and their internal problems. John Fitzmaurice's Austrian Politics and Society Today covers roughly the same ground as Sully's book and is a readable introduction to Austrian politics. Politics in Austria, edited by Kurt Richard Luther and Wolfgang C. Miiller, contains a collection of essays by Austrian political scien- tists examining the sociological changes in Austria during the post- war era and their impact on the political system. Readers with a knowledge of German should consult Handbuch des politischen Sys- tems Osterreichs, edited by Herbert Dachs et al., which contains a wealth of articles on political parties, political institutions, trade unions, foreign policy, and many areas of government policy. Also in German is the very useful Osterreichisches Jahrbuch fur Politik, which contains articles by noted specialists and politicians about recent political developments. (For further information and complete ci- tations, see Bibliography.) 220 Chapter 5. National Security Coat of arms of the province of Vienna IN 1993 THE AUSTRIAN DEFENSE ESTABLISHMENT was in the process of restructuring, from a force intended to defend Austria's territory against threats arising from hostilities between North Atlantic Treaty Organization and Warsaw Pact countries to a force that could react rapidly to local crises. Under the re- structuring plan, both the standing army and reserves are to be scaled back but are to maintain individual units in a rapid-response status, enabling the army to intervene quickly with appropriate forces to prevent instability in Austria's border areas. In view of the civil warfare in the former Yugoslavia and the breakup of Czechoslovakia into two states, the Czech Republic and Slovakia, as well as the possibility of overwhelming movements of refugees fleeing violence in nearby states, Austria considers itself to be in a highly exposed position in spite of the end of East- West confron- tation in Europe. The intervention of the Yugoslav army in Slovenia and Croatia in 1991 prompted the largest mobilization of the Aus- trian army since it was reconstituted in 1956. The Austrian armed forces consist of only one branch, the Bun- desheer (Federal Army), of which the air force (Fliegerdivision) is a component. There is no navy. Ground forces consist of 46,000 men on active duty, 19,500 of whom are conscripts who serve for six months, followed by sixty days of refresher training with their mobilization units spread over a ten-year period. There are 6,000 men in the air force, 2,400 of whom are conscripts. (There are no women in the Austrian armed forces.) The main active combat units are three mechanized brigades equipped with M-60 main battle tanks and Saurer armored personnel carriers. Two squadrons (twenty-four aircraft) of Draken fighter aircraft acquired from Sweden defend Austrian air space. Including activated reserve in- fantry brigades and regiments, total mobilized strength is about 200,000, but the mobilization level will decline to 120,000 under the reorganization plan, the New Army Structure, announced in late 1991 and to be completed in 1995. Weapons of mass destruction and guided missiles were prohibited under the State Treaty of 1955. Also in 1955, parliament enacted a constitutional law prohibiting participation in any military alli- ance and specifying that the armed forces were to be used only for the defense of the country. However, neutrality, according to the Austrian interpretation, did not preclude contributing to peacekeep- ing operations under United Nations (UN) auspices. As of 1993, 223 Austria: A Country Study Austria had battalion units serving the UN in Cyprus and on the Golan Heights in Syria. Austria did not, however, participate in the UN-supported coalition against Iraq after the Iraqi invasion of Kuwait in 1990. Austria's Federal Police function in fourteen of the largest cities; the federal Gendarmerie functions in the remainder of the cities and towns and in most rural areas except for a few that maintain their own police forces. The Criminal Investigative Service, the Administrative Police, and the State Police (secret service) are also nationally organized under the federal Ministry for Interior. Austrians are generally peaceful people; domestic politics are rarely violent, and the level of crime is moderate. Criminal codes and criminal procedure codes are enlightened. Practices relating to criminal justice and the penal system are considered fair by Eu- ropean standards, although questionable conduct by the police and the secret service has been investigated and reforms have been in- stituted. Historical Background The Habsburg Military From the time the Habsburgs established hereditary rule over Austrian lands in the thirteenth century until the fall of the Habs- burgs at the end of World War I, their armies were among the largest and most significant in Europe. For 200 years, Habsburg forces formed a bastion defending the continent against repeated Ottoman campaigns to overrun Europe. In 1529 and again in 1683, the Turks were turned back only after reaching the gates of Vien- na. Count Ernst Riidiger von Starhemberg, who commanded the imperial troops in the city, broke the siege in 1683 with the aid of German and Polish forces under the Polish king, Jan Sobieski, then drove the Turks back into the Balkans, finally ending the Ot- toman threat. One of Austria's greatest military commanders, Prince Eugene of Savoy, in concerted operations with Britain's Duke of Marl- borough, won a series of victories over the France of Louis XIV in the War of the Spanish Succession (1701-14). Wars fought with the Prussia of Frederick the Great over Silesia in 1 740-48 (the War of the Austrian Succession) and 1756-63 were less successful. The monarchy's military potential during the eighteenth century was limited by the emperor's dependence on provincial diets for recruits and tax receipts. The nobles of the imperial lands who controlled the enserfed peasantry had no fixed obligation to provide soldiers to the Habsburgs. 224 National Security Austria was prominent in the coalitions that tried to check Napoleon Bonaparte's ambitions but was forced to accept humiliat- ing peace conditions after being decisively defeated in 1800, again in 1805 when Napoleon occupied Vienna after the Battle of Auster- litz, and finally after the Battle of Wagram in 1809. Yet Austria joined with the other great powers in the final campaign resulting in Napoleon's downfall in 1814. Habsburg armies displayed their loyalty to the monarchy in 1848 and 1849, suppressing the revolutionary regimes that had swept into power in Vienna, Budapest, Milan, and Prague. In 1859 Aus- tria was provoked into war with Piedmont and its supporter, the France of Napoleon III. The Austro-Piedmontese War lasted only three months, but both sides mobilized large armies. The Austri- ans were defeated after bitter fighting at Magenta and Solferino, the young emperor, Franz Joseph, assuming personal command during the battle at Solferino. Prussia established its domination over other German states by its victory over Austria in the Seven Weeks' War in 1866. The critical battle was waged at Koniggratz (Hradec Kralove in the present-day Czech Republic). The Austrians, armed with muzzle- loading rifles, suffered 20,000 casualties and 20,000 prisoners. The battle overshadowed Austria's victories over Prussia's Italian al- lies at Custozza and in the naval Battie of Lissa (Vis) off the Dalma- tian coast in which a smaller Austrian fleet of ironclads overcame the Italians by bold use of ramming tactics. Following the end of the Seven Weeks' War, Austria experienced fifty years of peace until World War I broke out in 1914. In spite of their size and distinction in individual engagements, Habsburg armies of the nineteenth century had known little but defeat in encounters with other major powers of Europe. The armed forces were often handicapped by uninspired or timid battlefield leaders. The principal cause of their failure, however, was the fact that, among the five great powers, which also included Britain, France, Prussia, and Russia, Austria allocated the lowest propor- tion of its revenue to its military establishment. Various political groups blocked adequate expenditures on the army. For example, the Prussian infantry, using breech-loading rifles in 1866, had four to five times the effective firepower of the Austrian infantry. The constant economizing was also reflected in the poor training of con- scripts and in the quality of the notoriously underpaid company- grade officers. Their tactics, based on frontal assault with fixed bayo- nets, were outdated. The quartermaster corps had a reputation for inefficiency and corruption. 225 Austria: A Country Study The standing army of twelve corps had 240,000 men as of 1854. At its mobilized strength of 800,000, it was the largest in Europe, but the speed of mobilization and the capacity to move troops to the scene of battle were much inferior to those of the Prussians, who made full use of their growing rail system. As a matter of policy, conscripts were assigned to regiments far from their homes. A call- up involved slow train journeys for reservists; mobilization required eight weeks, nearly twice as long as mobilization of the Prussian army, which was organized by region. The creation of Austria-Hungary (also seen as the Austro- Hungarian Empire) under the Compromise (Ausgleich) of 1867 separated the Hapsburg Empire into independent Austrian and Hungarian governments. Only the army, foreign affairs, and related budgetary matters remained joined under the emperor, who held supreme command of all forces in time of war. A new army law decreed universal three-year conscription followed by a ten-year reserve obligation. In practice, only about one in five of those lia- ble to service were called up, and many were sent on leave after two years. The army of Austria-Hungary has been described as a state within a state. In an empire of ten nationalities and five religions, marked by ethnic conflict and sharp political and eco- nomic divisions, the army formed the only real bond among the emperor's subjects and the sole instrument through which loyalty to him could find expression. Nevertheless, Austria-Hungary gave the impression of being a highly militarized nation. British historian Edward Crankshaw not- ed that not only the emperor but most males in high society never wore civilian clothes except when hunting. Select regiments of the army were splendidly outfitted, but, with a few dedicated exceptions, the officers, so magnificent on the parade ground, "shrank . . . from the arbitrament of arms as from an unholy abyss." Regiments were organized along linguistic lines, although Ger- man was the language of command. Ethnic factors did not pre- vent recruitment of non-German speakers to the officer corps or their regular promotion. Hungarians, Croats, Serbs, Poles, Italians, Czechs, Slovenes, and Romanians could be found in senior posi- tions. In the more prestigious units, most field- grade officers owed their ranks to birth or wealth. As of 1900, a majority of the officer corps in the Austro-Hungarian army were native German speak- ers, although only one-fourth of the empire's total population was German speaking. Two World Wars, 1914-18 and 1939-45 Although Austria-Hungary's aim in 1914 was to fight a limited 226 National Security war to punish Serbia after the assassination of the heir to the Habs- burg crown, Franz Ferdinand, the crisis quickly flared out of con- trol as European powers mobilized their mass armies in accordance with their treaty commitments. Although poorly prepared for con- flict and lacking essential weapons and unit cohesiveness, the Austro-Hungarians were immediately faced with a two-front war against Serbia and Russia. Their fifty-nine divisions (which included hastily raised reserve units) had to secure a front running from the Adriatic Sea to central Poland. The superior Russian army drove the Austro-Hungarians back with immense losses in Polish Galicia. The Russian front was stabilized only after German officers as- sumed command. Although Austria- Hungary had expected to con- quer Serbia quickly, Serbia was not defeated until late 1915 after terrible fighting in Bosnia. The campaigns against Italy, which had entered on the side of the Allies in May 1915, were somewhat more successful, the Habsburg armies fighting with stubbornness and at times with great skill. In spite of rebellious secession movements among some non-Germans, the bulk of the army remained loyal, holding together until the last months of the war. Only among Czech soldiers affected by Slavic nationalism were there serious defections to the Russians. At the last, however, front-line troops in Italy aban- doned their guns, and the revolt spread as even German-speaking troops refused to obey orders. Austro-Hungarian military casual- ties of 1 .4 million killed or died in captivity and 3.6 million wounded were greater than those of Germany on a proportional basis. Truncated Austria, reduced to some 6.5 million primarily Ger- man speakers after the war, was to some degree divided even against itself between a conservative population in the rural western areas of the nation and the urban socialists of Vienna and other indus- trial centers of the east. A regular Austrian army of 30,000 men was established in 1922, and, although free from political involve- ment, it had conservative leanings in the imperial tradition. Both police and army were weak; they could not prevent the formation of paramilitary groups by rival political blocs. The Social Democrat- ic Workers' Party (Sozialdemokratische Arbeiterpartei — SDAP) formed the Republican Defense League (Republikanischer Schutz- bund), and the right-wing Christian Social Party (Christlichsozi- ale Partei — CSP) had links with the various rightist militias that sprang up after the war. Both groups had impressive arsenals. In 1934, reacting to pressures by the CSP chancellor, Engelbert Doll- fuss, and to provocations by rightist militias, the SDAP called a general strike and the Republikanischer Schutzbund rose in a num- ber of cities. The uprising was put down in four days after the army 227 Austria: A Country Study used artillery against workers' apartment blocks in Vienna where the socialist revolt was centered. Although the army's actions were approved by Dollfuss, the episode seemed to attest to the army's alignment with rightist elements and its antagonism to the interests of the urban industrial workers. Germany's annexation (Anschluss) of Austria in 1938 was accom- plished without resistance under orders of the government. The armed forces suffered from low morale and were infused with pro- Nazi sentiment. Austrian troops in Salzburg and Innsbruck report- edly put themselves immediately under German command and participated in joint victory parades. The troops were dispersed throughout the army, the German Wehrmacht; no purely Austrian units were retained. Most of the generals and many field-grade officers were purged or were shifted to administrative posts. The thirty-five divisions raised on Austrian territory following the out- break of World War II were composed mainly of Austrians. For the most part, they were assigned to the Russian front. Austria suffered tremendous losses in the war, yet its 247,000 military deaths were fewer proportionately than German losses. A further 750,000 were made prisoners of war, the last of these returning from the Soviet Union as late as 1955. During the postwar occupation (1945-55) by the Four Powers (Britain, France, the Soviet Union, and the United States), the three Western occupying powers permitted the Austrian govern- ment to equip a mobile regiment of the Gendarmerie, organized into "shock battalions." Their primary mission was to control communist- inspired disturbances. Headquartered in Linz, the First Battalion was responsible for the provinces of Salzburg and Up- per Austria south of the Danube (the American Zone), the Second Battalion for Styria (the British Zone), and the Third Battalion for Tirol and Vorarlberg (the French Zone). (The Russian Zone con- sisted of Lower Austria, Burgenland, and Upper Austria north of the Danube. Vienna was occupied by the Four Powers.) Surplus equipment and vehicles were transferred to the Austrian battal- ions by the Western powers. In 1956 when the Austrian army, the Bundesheer (Federal Army) was reconstituted, 6,500 officers and enlisted men of these special units formed its nucleus. Strategic Concepts and Missions of the Austrian Armed Forces The withdrawal of the Allied forces as a result of the State Treaty of 1955 dramatically affected the general strategic situation in Cen- tral Europe. The presence of two neutral countries — Switzerland and Austria — in effect split the defenses of the North Atiantic Treaty 228 A noncommissioned officer armed with a 5.56mm Trainees in a tactical field exercise Courtesy United States Department of Defense Steyr assault rifle Courtesy United States Department of Defense Organization (NATO) into northern and southern tiers. Links be- tween NATO forces in southern Germany and northern Italy had to be routed through France. Moreover, if Warsaw Pact forces had chosen to violate Austrian neutrality by driving westward through the Danube Basin, they would have been able to outflank strong NATO defenses on the central front and avoid a contested Danube River crossing in Bavaria. A second line of potential Warsaw Pact attack ran across the southern flanks of the main Alpine range from the Hungarian Plain leading into northern Italy. The early years of the Bundesheer were directed by military lead- ers whose experience reflected their service as mid-level officers in the German army, the Wehrmacht. The army's structure resem- bled that of European NATO powers but on a smaller scale. Its combat units were filled with permanent cadre and nine-month conscripts. It lacked sufficient manpower and air cover. In 1956 the Bundesheer was called on to handle the first of two border crises. It was in that year that the Hungarian uprising was 229 Austria: A Country Study crushed by the Soviet Union and 170,000 Hungarians fled into Austria. The second was in 1968 when Warsaw Pact troops in- vaded Czechoslovakia. Austria's experiences during the Hungar- ian and Czechoslovak crises helped clarify the nature of the potential threat to the nation's neutrality and led to a reorientation of defense policy and a revised definition of the military's mission. After 1970, under the influence of a majority of the Socialist Party of Austria (Sozialistische Partei Osterreichs — SPO) in parliament, military service was deemphasized and conscription reduced to six months. However, with the system of refresher training for former conscripts, the basis for a large militia program was established, and there was more total manpower available. The example of Swit- zerland's reliance on mobilization units to uphold its neutrality provided a useful lesson. However, strict budgetary limits continued to delay the acquisition of modern supersonic combat aircraft un- til the late 1980s. Until the early 1990s, Austria's security policy centered on a strategy of Abhaltestrategie (deterrence or dissuasion). Its aim was to convince a prospective invader that any possible advantages de- rived from an attack on or across Austria would easily be offset by a loss in time, personnel, and equipment. The Austrian ver- sion of deterrence flowed from the philosophy of Comprehensive National Defense, also embraced by such other European neutrals as Switzerland, Sweden, and Finland. This concept encompasses the psychological, civil, economic, and military defense of the home- land. Military defense is based on an area defense combat doctrine that uses Austria's geography — its mountains and forests — to the utmost. Austrian forces would use hit-and-run tactics to slow and wear down the aggressor, while avoiding pitched battles. Defense of preselected key zones and strong points along or near primary areas of approach would be used to channel the enemy's advance to make it more susceptible to both commando and limited armor counterattacks. Austrian military planners concluded that the least likely threat scenario was one in which Austria would be involved in an all-out nuclear war, a role that in any event was beyond the capability of such a small country. Rather, the problem was how Austria could best use its limited military capacity to deal with the range of threats with which the country might realistically be faced. Three levels of threat were identified. The first was a localized political crisis near Austria's borders, such as the case of Czechoslovakia in 1968 or the Slovenian assertion of independence from Yugoslavia in 1991. These situations could be faced by rapidly shifting armored and mechanized standing forces to the border area where trouble could 230 National Security break out. Austrian military leaders stressed that their purpose would be to avoid hostilities and to give credence to their determi- nation to prevent, as one former army commander expressed, "wanton or negligent disregard of Austria's neutrality." A second level of threat might arise in the case of hostilities be- tween neighboring states. In such an event, Austria might have to deny right of passage, prevent Austrian territory from being used as a base or refuge, or defend the integrity of its air space. In this situation, reserves would have to be partially or fully deployed. In the other situation contemplated, defense against clear aggres- sion threatening the state, the nation's entire military potential would be deployed. In the third level of threat, it was assumed that the aggressor would consider Austrian territory useful only as a base of opera- tions against a primary enemy. Thus, the purpose of an Austrian military buildup would be to compel a potential aggressor to con- clude that the advantages of mounting an attack against Austria were out of proportion to the price that would have to be paid and the delay encountered. To deal with these contingencies, Austria developed the area defense (Raumverteidigung) concept in the mid-1970s. Under this plan, all of Austrian territory was denoted as either a key zone (Schlusselzone) or an area security zone. The key zones were those having prime value as military routes of advance, such as the Danube and Inn river valleys and the mountain passes of southern Austria. Austria's combat strength was to be concentrated in the key zones, where enemy forces could be funneled and then de- stroyed by armored and mechanized units. Main lines of communi- cation were to be defended by static defenses consisting of fortified gun positions and prepared demolitions positioned around or near natural obstacles. Rear-echelon units of the enemy were to be simul- taneously harried by reserve light infantry forces. In the area secu- rity zones (Raumsicherungszonen), the objective would be to deny unchallenged use of the terrain by the use of prepared artillery po- sitions, antitank obstacles, and guerrilla-type actions (Jagdkampfe) on the enemy's flanks and rear, forcing the invader to deploy com- bat troops to protect service and support operations. The breakup of the Warsaw Pact and the subsiding of East-West tensions in 1990 and 1991 necessitated a fundamental reappraisal of Austrian security policy. Austrian planners no longer expected a large-scale invasion requiring defense of the entire territory. Therefore, changes in the security policy were undertaken in 1993 with the New Army Structure (Heeresgliederung Neu). This policy, to be completed in 1995, is intended to meet local crises arising 231 Austria: A Country Study from internal instability in countries on Austria's borders that would precipitate large refugee flows and spillover violence. Contemplated structural changes emphasize the immediate availability of reac- tion forces that could deal with particular situations without the need for mobilization. Commenting in 1992, Defense Minister Werner Fasslabend said that although the collapse of the Soviet empire had put an end to East- West confrontation, the dramatic changes had contributed to new risks in the form of local and ethnic conflicts. Although the danger of world conflagration had diminished, Austria was in one of the regions where instability had actually increased. Austria's miliary leadership saw a continuing mission to defend the country's border to prevent the Yugoslav civil war from spill- ing into Austrian territory. The breakup of Czechoslovakia into two states in 1993 also raised threats of instability on the nation's northern flank. Control over refugees attempting to flee fighting or economic hardship could also necessitate intervention of the armed forces. Neutrality and the Armed Forces Under the State Treaty of 1955, a number of restrictions were imposed that affected the buildup of the Bundesheer. Under Arti- cle 13 of the treaty, Austria was prohibited from possessing "any self-propelled or guided missiles or guns with a range of more than thirty kilometers." On October 26, 1955, the government passed a law in which Austria declared of its own free will its permanent neutrality. The law further specified that "Austria will never in the future accede to any military alliances nor permit the estab- lishment of military bases by foreign states on her territory." The Austrian government asserted that it alone was competent to de- fine Austrian neutrality. Austria has interpreted its posture as a neutral state in Europe in somewhat the same terms as Switzerland. It has deliberately adopted a more active policy of involvement in international peace- keeping and humanitarian matters, in particular those it could per- form in conjunction with other members of the UN or at the behest of the UN. In 1960 the army sent a medical team to the Congo (present-day Zaire) and has provided other medical units, military police, and observers to Cyprus and other areas in the Middle East since 1964. By the early 1990s, some 30,000 Austrians had served in UN missions. As of 1993, one battalion of 350 troops was de- ployed with the United Nations Peacekeeping Force in Cyprus (UNFICYP) patrolling the buffer zone between the Greek Cyp- riot and Turkish forces. Another battalion of 450 troops was 232 National Security on the Golan Heights in Syria as part of the United Nations Dis- engagement Observer Force (UNDOF). Seven observers were with the United Nations Iraq-Kuwait Observer Mission (UNIKOM), and seventeen observers were attached to the United Nations Truce Supervision Organization (UNTSO) in Cambodia. Austria did not participate directly in the UN-backed action in 1991 to drive the Iraqi invasion forces out of Kuwait. It did, however, provide financial assistance to states suffering from dis- location caused by the invasion. In addition, the United States was granted expanded overflight authority for troops and supplies in connection with Operation Desert Shield and Operation Desert Storm. This action, a departure from Austria's former posture of strict neutrality, was interpreted as a gesture to help demonstrate that Austria's neutral status need not be a barrier to future mem- bership in the European Union (EU — see Glossary). In the same vein, Austria announced that it would grant NATO permission to use its airspace for airborne warning and control system (AW ACS) aircraft as "an expression of solidarity within the frame- work of pan-European security." With the exception of the prohibition on guided missile systems, restrictions in the State Treaty on the acquisition of particular weapons have not prevented Austria's defense buildup. Austria refrained for many years from the purchase of modern antiaircraft and antitank guided missiles in spite of the fact that such weapons have been accepted as essential elements of defense in all modern armies. Short-range weapons of this type had not been developed when the treaty was concluded. Nevertheless, in 1988 when Aus- tria sought a reinterpretation of Article 1 3 by the other signatories to justify purchasing such weapons, its attempt was not successful. In 1989, however, Austrian authorities reached a decision to ac- quire surface-to-air missiles (SAMs) and antitank missiles on the understanding that they were intended solely for defensive pur- poses. The changed security situation in Europe made it possible for Austria to take such a step without fear of provoking countries that belonged to the Warsaw Pact. As of 1993, Austria was ac- cepting delivery of BILL (Bofors, Infantry, Light and Lethal) antitank missiles from Sweden and was also planning to purchase larger antitank missiles from France or the United States. Its Draken interceptor aircraft will be armed with Sidewinder air-to-air mis- siles, and its ground-based antiaircraft missile defense will be equipped with French Mistral missiles. National Defense Under the constitution, the president is the nominal commander 233 Austria: A Country Study in chief of the armed forces. In reality, the chancellor has opera- tional authority, exercised through the minister for national defense. The chancellor also chairs the National Defense Council, which has as its members a vice chairman, the minister for national defense, an appointee of this minister, the general troop inspector of the armed forces, and a parliamentary representative. The minister for national defense, acting in cooperation with the minister for interior, coordinates the work of the four major committees under the National Defense Council: the Military Defense Com- mittee; the Civil Defense Committee; the Economic Defense Com- mittee; and the Psychological Defense Committee. The general troop inspector acts as the senior military adviser to the minister for national defense, assists the minister in the exercise of his authority, and, as head of the general staff, is responsible for plan- ning. However, the army commander exercises direct operational control of the Bundesheer in both peacetime and wartime. Article 79 of the constitution, as amended in 1985, states that the army is entrusted with the military defense of the country. In- sofar as the legally constituted civil authority requests its coopera- tion, the army is further charged with protecting constitutional institutions and their capacity to act, as well as the democratic free- doms of the inhabitants; maintaining order and security in the in- terior; and rendering aid in disasters and mishaps of extraordinary scope. In administering the armed forces, the Ministry for National Defense is organized into four principal sections and the inspec- torate general: Section I deals with legal and legislative matters; Section II handles personnel and recruitment matters, including discipline and grievances; Section III is concerned with troop com- mand, schools, and other facilities, and it also comprises depart- ments G-l through G-5 as well as a separate department for air operations; and Section IV deals with procurement and supply, quartermaster matters, armaments, and ordnance (see fig. 12). The general troop inspectorate is a separate section of the ministry with responsibility for coordination and fulfillment of the missions of the armed forces. It encompasses a general staff department, an attache department, and planning and inspection groups. The armed forces consist solely of the army, of which the air force is considered a constituent part. As of 1993, the total active complement of the armed forces was 52,000, of whom 20,000 to 30,000 were conscripts undergoing training of six to eight months. The army had 46,000 personnel on active duty (including an esti- mated 19,500 conscripts), and the air force had 6,000 personnel (2,400 conscripts). 234 National Security Army Under the area defense strategy, which had determined the ar- my's organizational structure until 1993, the army was divided into three principal elements: the standing alert force (Bereitschafts- truppe) of active units, including the air division; the mobile militia (Mobile Landwehr), organized as eight mechanized reserve brigades to be deployed to key danger spots in the event of mobilization; and the stationary militia (Raumgebundene Landwehr) of twenty- six reserve infantry regiments organized for territorial defense. Both the mobile militia and the stationary militia were brought up to strength only in times of mobilization or during periods allotted for refresher training, usually three weeks in June. Training of con- scripts was conducted by twenty-eight training and equipment- holding regiments (Landwehrstammregimenten). On mobilization, these regiments would disband, with their cadre reassigned to lead reserve units or form replacement regiments and battalions. At the army level were a headquarters, guard, and special forces battalions and an artillery battalion at cadre strength. Two corps headquarters, one in the east at Graz and one in the west at Salz- burg, would, on mobilization, command the provincially organized units in their respective zones. Each corps included artillery, anti- tank, antiaircraft, and engineering battalions and a logistics regi- ment, all on a cadre basis. Each of the nine provincial military commands supervised the training and maintenance activities of its training and equipment- holding regiments. On mobilization, these nine commands would convert to a divisional headquarters commanding mobile militia, stationary militia, and other independent units. The only active units immediately available in an emergency were those of the standing alert force of some 15,000 career sol- diers supplemented by conscripts. The force was organized as a mechanized division consisting of three armored infantry brigades. Each brigade was composed of one tank battalion, one mechanized infantry battalion, and one self-propelled artillery battalion. Two of the brigades had antitank battalions equipped with self-propelled weapons. The divisional headquarters was at Baden near Vienna; the three brigades were based in separate locations, also in the north- east of the country. The New Army Structure — the reorganization plan announced in late 1991 and scheduled to be in place sometime in 1995 — replaces the previous two-corps structure with one of three corps. The new corps is headquartered at Baden, with responsibility for the two northeastern provinces of Lower Austria and Upper Austria 235 Austria: A Country Study — lil «Q "!z ■< S s o o s 1- LLI i Z - o :abi r y z i. o u < cc LU i- H m 3 z -5 III -5 LL Q DC — LL. 2 < a S O t- z > z ?. LU :tio IPME CUR PLY LU DOl a) O0C3 UiOLO) QUI i u- QjO CO Z z O 2 i= Q I- Q< Z < ZCC < DC QljC-fllj^ .3 U §-5 6 "S3 270 Appendix Table 14. Presidents of Austria, 1945- Name Years in Office Party Allegiance Karl Renner 1945-50 SPO 1 Theodor Korner 1951-57 -do- Adolf Scharf 1957-65 -do- Franz Jonas 1965-74 -do- Rudolf Kirchschlager 1974-86 -do- Kurt Waldheim 1986-92 OVP 2 Thomas Klestil 1992- -do- 1 Sozialistische Partei Osterreichs (Socialist Party of Austria). In 1991 the name changed to Social Democratic Party of Austria (Sozialdemokratische Partei Osterreichs — SPO). 2 Osterreichische Volkspartei (Austrian People's Party). Table 15. Governments of Austria, 1945- Chancellor and Period in Power Party Affiliation Parties in Government 1945 Karl Renner (SPO) 1 SPO, OVP 2 , KPO 3 1945-49 Leopold Figl (OVP) -do- 1949-53 -do- SPO, OVP 1953-56 Julius Raab (OVP) -do- 1956-59 -do- -do- 1959-61 -do- -do- 1961-64 Alphons Gorbach (OVP) -do- 1964-66 Josef Klaus (OVP) -do- 1966-70 -do- OVP 1970-83 Bruno Kreisky (SPO) SPO 1983-86 Fred Sinowatz (SPO) SPO, FPO 4 1986- Franz Vranitzky (SPO) SPO, OVP 1 SPO — Sozialistische Partei Osterreichs (Socialist Party of Austria). In 1991 the name changed to Social Democratic Party of Austria (Sozialdemoktatische Partei Osterreichs — SPO). 2 OVP — Osterreichische Volkspartei (Austrian People's Party). 3 KPO — Kommunistische Partei Osterreichs (Communist Party of Austria). 4 FPO — Freiheitliche Partei Osterreichs (Freedom Party of Austria). Source: Based on information from Jim Sweeney and Josef Weidenholzer (eds.), Austria: A Study in Modern Achievement, Aldershot, United Kingdom, 1988, 278-79. 271 Austria: A Country Study Table 16. Major Military Equipment, 1993 Type and Description Country of Origin In Inventory Army Main battle tanks M-60A3 United States 169 Armored personnel carriers Saurer 4K-4E/F Austria 465 Tank destroyers Kiirassier SK-105 -do- 285 Self-propelled artillery M-109A2 155mm howitzers United States 54 Towed artillery IFH (M-2A1), 105mm -do- 108 M-114, 155mm -do- 24 Fortress artillery SFK M-2, 155mm Sweden 24 Mortars M-2, 107mm United States 102 M-43, 120mm Austria 274 Multiple rocket launchers M-51, 130mm Czechoslovakia 18 Antitank guided missiles RBS-56 BILL Sweden 118 Antitank guns M-52/-55, 85mm Czechoslovakia 240 United States 60 Centurion tank turrets, 105mm . . . Britain 200 Air defense guns M-58 Oerlikon, 20mm Switzerland 560 Oerlikon twin, towed, 35mm -do- 74 M-42 twin, self-propelled, 40mm . . United States 38 ir force Fighter/ground attack aircraft Saab 1050 Sweden 30 Fighter aircraft Draken J-350e -do- 24 Helicopters Agusta-Bell AB-212, medium, Italy 23 Agusta-Bell AB-204, light, transport -do- 8 Bell OH-58B Kiowa, United States 12 A-316B Alouette III, search and air France 24 Light transport/liaison Short Skyvan 3M Britain 2 Pilatus PC-6B Turbo Porter Switzerland Air defense weapons M-65 twin Oerlikon, 35mm guns . . -do- 18 Source: Based on information from The Military Balance, 1993-1994, London, 1993, 72. 272 Bibliography Chapter 1 Barker, Elisabeth. Austria, 1918-1972. Coral Gables, Florida: University of Miami Press, 1973. Bridge, F.R. The Habsburg Monarchy among the Great Powers, 1815-1918. New York: Berg, 1990. Evans, Robert John Weston. The Making of the Habsburg Monarchy, 1550-1700: An Interpretation. Oxford: Clarendon Press, 1984. Gellott, Laura S. The Catholic Church and the Authoritarian Regime in Austria, 1933-1938. New York: Garland, 1987. Jelavich, Barbara. The Habsburg Empire in European Affairs, 1814-1918. Chicago: Rand McNally, 1969. Modern Austria: Empire and Republic, 1815-1986. Cam- bridge: Cambridge University Press, 1987. Johnson, Lonnie. Introducing Austria: A Short History. Riverside, California: Ariadne Press, 1989. Kann, Robert A. A History of the Habsburg Empire, 1526-1918. Berke- ley: University of California Press, 1977. Leeper, Alexander Wigram Allen. A History of Medieval Austria. Lon- don: Oxford University Press, 1941. Low, Alfred D. The Anschluss Movement, 1918-1938: Background and Aftermath — An Annotated Bibliography of German and Austrian Nation- alism. New York: Garland, 1984. Luza, Radomir. Austro-German Relations in the Anschluss Era. Prince- ton: Princeton University Press, 1975. . The Resistance in Austria, 1938-1945. Minneapolis: Univer- sity of Minnesota Press, 1984. Macartney, Carlile Aylmer. The Habsburg Empire, 1790-1918. Lon- don: Weidenfeld and Nicolson, 1968. Reinerman, Alan J. Austria and the Papacy in the Age of Metternich. (2 vols.) Washington: Catholic University of America Press, 1979. Sully, Melanie A. A Contemporary History of Austria. London: Rout- lege, 1990. Continuity and Change in Austrian Socialism: The Eternal Quest for the Third Way. Boulder, Colorado: East European Mono- graphs, 1982. Tapie, Victor Lucien. The Rise and Fall of the Habsburg Monarchy. New York: Praeger, 1971. 273 Austria: A Country Study Vexler, Robert I. Austria: A Chronology and Fact Book, 1437-1973. Dobbs Ferry, New York: Oceana, 1977. Ward, David. 1848: The Fall ofMetternich and the Year of Revolution. New York: Weybright and Talley, 1970. Williamson, Samuel R. Austria- Hungary and the Origins of the First World War. New York: St. Martin's Press, 1991. Zollner, Erich. Geschichte Osterreichs: Von den Anfangen bis zur Gegen- wart. Vienna: Verlag fur Geschichte und Politik, 1970. Chapter 2 Austria. Austrian Museum for Economic and Social Affairs. Survey of the Austrian Economy, 92-93: The Austrian Economy and Its Inter- national Position in Data, Diagrams, and Tables. Vienna: 1992. Austrian Museum for Economic and Social Affairs. Survey of the Austrian Economy, 93-94: The Austrian Economy and Its Inter- national Position in Data, Diagrams, and Tables. Vienna: 1993. . Austrian Museum for Economic and Social Affairs. Survey of the Austrian Economy, 94-95: The Austrian Economy and Its Inter- national Position in Data, Diagrams, and Tables. Vienna: 1994. . Bundeskammer fur Arbeiter und Angestellte. Wirtschafts- und Sozialstatistisches Taschenbuch, 1992. Vienna: 1992. Dokumentationsarchiv des Osterreichischen Widerstandes und Ministerium fur Erziehung, Kunst, und Sport. Osterreicher und der Zweite Weltkrieg. Vienna: Osterreichischer Bundesverlag, 1989. . Federal Press Service. Austria: Facts and Figures. Vienna: 1990. . Federal Press Service. Austria and the New Emigration. Vienna: 1990. , Federal Press Service. The Austrian Educational System. Vienna: 1990. . Federal Press Service. Burden Sharing: Austria's Contribu- tion to International Solidarity. Vienna: 1991. Federal Press Service. The First Republic, 1918-1938. Vienna: 1988. . Federal Press Service . Jewish Life in A ustria. Vienna: 1992. Federal Press Service. The Rational Approach to Labour and Industry. Vienna: 1990. Federal Press Service. Religions in Austria. Vienna: 1990. . Federal Press Service. Social Security in Austria. Vienna: 1988. 274 Bibliography Ministerium fur Wissenschaft und Forschung. Hochschul- bericht, 1990. Vienna: 1990. . Ministerium fur Wissenschaft und Forschung. Statistisches Taschenbuch. Vienna: 1991. . Ministerium fur Wissenschaft und Forschung. Zur Sozia- len Lage der Studierenden, 1990. Vienna: 1990. . Ministry for Foreign Affairs. Austrian Foreign Policy Year- book, 1991. Vienna: 1991. Osterreichisches Statistisches Zentralamt. Sozialstatistische Daten, 1990. (Beitrage zur Osterreichischen Statistik, No. 967.) Vienna: 1990. . Osterreichisches Statistisches Zentralamt. Statistisches Hand- buch fur die Republik Osterreich, 1991. Vienna: 1991. Osterreichisches Statistisches Zentralamt. Statistisches Jahr- buch fur die Republik Osterreich, 1992. Vienna: 1992. Osterreichisches Statistisches Zentralamt. Statistisches Jahr- buch fur die Republik Osterreich, 1993. Vienna: 1993. Staatssekretariat fur allgemeine Frauenfragen, Bundeskanz- leramt. Frauen in Osterreich, 1975-85. Vienna: 1985. Staatssekretariat fur allgemeine Frauenfragen, Bundeskanz- leramt. Frauen in Osterreich, 1985-90. Vienna: 1990. Baratta, Mario von (ed.). Der Fischer Weltalmanach, 1994. Frankfurt: Fischer Taschenbuch Verlag, 1993. Bartunek, Ewald. "Erwerbstatigkeit, Arbeitsmarkt." Pages 133-86 in Austria, Osterreichisches Statistisches Zentralamt, Sozial- statistische Daten, 1990. (Beitrage zur Osterreichischen Statistik, No. 967.) Vienna: 1990. Dallinger, Alfred. "Social Security in Austria." Pages 197-204 in Jim Sweeney and Josef Weidenholzer (eds.), Austria: A Study in Modern Achievement. Aldershot, United Kingdom: Avebury, 1988. Dungler, Herta, and Wilhelm Janik. "Wohnen." Pages 323-50 in Austria, Osterreichisches Statistisches Zentralamt, Sozialstatistische Daten, 1990. (Beitrage zur Osterreichischen Statistik, No. 967.) Vienna: 1990. Fassmann, Heinz. "Einwanderung, Auswanderung, und Binnen- wanderung in Osterreich-Ungarn um 1910." Pages 92-101 in Heinz Fassmann et al. (eds.), Demographische Informationen, 1990- 91. Vienna: Institut fur Demographie, Osterreichische Akademie der Wissenschaften, 1991. Fassmann, Heinz, and Rainer Munz. "Einwanderungsland Oster- reich?" Pages 85-91 in Heinz Fassmann et al. (eds.), Demogra- phische Informationen, 1990-91. Vienna: Institut fur Demographie, Osterreichische Akademie der Wissenschaften, 1991. 275 Austria: A Country Study Filla, Wilhelm. "National Minorities in Austria." Pages 250-55 in Jim Sweeney and Josef Weidenholzer (eds.), Austria: A Study in Modern Achievement. Aldershot, United Kingdom: Avebury, 1988. Findl, Peter. "Ehe, Familie, Haushalt." Pages 43-76 in Austria, Osterreichisches Statistisches Zentralamt, Sozialstatistische Daten, 1990. (Beitrage zur Osterreichischen Statistik, No. 967.) Vienna: 1990. Fitzmaurice, John. Austrian Politics and Society Today: In Defence of Austria. New York: St. Martin's Press, 1990. Fraser, Angus. The Gypsies. Oxford: Blackwell, 1992. Hainka, Alexander. "Bevolkerung." Pages 9-42 in Austria, Os- terreichisches Statistisches Zentralamt, Sozialstatistische Daten, 1990. (Beitrage zur Osterreichischen Statistik, No. 967.) Vienna: 1990. Heiler, Bernhard, and Friedrich Nitsch. "Schulwesen, Bildung." Pages 101-33 in Austria, Osterreichisches Statistisches Zen- tralamt, Sozialstatistische Daten, 1990. (Beitrage zur Oster- reichischen Statistik, No. 967.) Vienna: 1990. Johnson, Lonnie. Introducing Austria: A Short History. Riverside, California: Ariadne Press, 1989. Karmasin, Fritz. Austrian Attitudes Toward Jews, Israel, and the Holocaust. (Working Papers on Contemporary Anti-Semitism.) New York: American Jewish Committee, 1992. Leitner, Helga. "Demography and Population Problems." Pages 75-98 in Kurt Steiner (ed.), Modern Austria. Palo Alto, Califor- nia: Society for the Promotion of Science and Scholarship, 1981 . Marz, Eduard. "Austria's Economic Development: 1945-85." Pages 27-46 in Jim Sweeney and Josef Weidenholzer (eds.), Aus- tria: A Study in Modern Achievement. Aldershot, United Kingdom: Avebury, 1988. Mayerhofer, Claudia. Dorfzigeuner: Kultur und Geschichte der Burgen- land-Roma von der Ersten Republik bis sur Gegenwart. Vienna: Picus Verlag, 1987. Moritz, Herbert. "Education in Austria." Pages 217-25 in Jim Sweeney and Josef Weidenholzer (eds.), Austria: A Study in Modern Achievement. Aldershot, United Kingdom: Avebury, 1988. Neyer, Gerda. "Alleinerziehende in Osterreich." Pages 68-73 in Heinz Fassmann et al. (eds.), Demographische Informationen, 1990-91. Vienna: Institut fur Demographie, Osterreichische Akademie der Wissenschaften, 1991. Pauley, Bruce. From Prejudice to Persecution: A History of Austrian Anti- Semitism. Chapel Hill: University of North Carolina Press, 1992. 276 Bibliography Population Crisis Committee. "The International Human Suffering Index." Washington: 1992. Stadler, Karl. Austria. (Nations of the Modern World Series.) New York: Praeger, 1971. Steger, Gerhard. "The Churches and Politics." Pages 250-54 in Jim Sweeney and Josef Weidenholzer (eds.), Austria: A Study in Modern Achievement. Aldershot, United Kingdom: Avebury, 1988. Steiner, Kurt. "Education and Educational Policy." Pages 321-34 in Kurt Steiner (ed.), Modern Austria. Palo Alto, California: So- ciety for the Promotion of Science and Scholarship, 1981. "Higher Education." Pages 335-44 in Kurt Steiner (ed.), Modern Austria. Palo Alto, California: Society for the Promotion of Science and Scholarship, 1981. Steiner, Kurt (ed.). Modern Austria. Palo Alto, California: Society for the Promotion of Science and Scholarship, 1981. Stojka, Ceija. Wir leben im Verborgenen: Erinnerungen einer Rom- Zigeunerin. Vienna: Picus Verlag, 1989. Stourzh, Gerald. Vom Reich zur Republik: Studien zum Osterreichisch- bewusstsein im 20. Jahrhundert. Vienna: Edition Atelier, 1990. Strasser, Rudolf. "Social Policy Since 1945: Democracy and the Welfare State." Pages 301-20 in Kurt Steiner (ed.), Modern Aus- tria. Palo Alto, California: Society for the Promotion of Science and Scholarship, 1981. Sweeney, Jim, and Josef Weidenholzer (eds.). Austria: A Study in Modern Achievement. Aldershot, United Kingdom: Avebury, 1988. Tomasevic, Nebojsa. Gypsies of the World. New York: H. Holt, 1988. United States. Department of State. Country Reports on Human Rights Practices for 1993. (Report submitted to United States Congress, 103d, 2d Session, House of Representatives, Committee on For- eign Affairs, and Senate, Committee on Foreign Relations.) Washington: GPO, 1994. Vollman, Kurt, and Eva Dragosits. "Einkommen, materieller Le- bensstandard." Pages 187-234 in Austria, Osterreichisches Statistisches Zentralamt, Sozialstatistische Daten, 1990. (Beitrage zur Osterreichischen Statistik, No. 967.) Vienna: 1990. Weinzierl, Erika. "Religions and Their Relations to State and Par- ties." Pages 99-122 in Kurt Steiner (ed.), Modern Austria. Palo Alto, California: Society for the Promotion of Science and Scholarship, 1981. Welpton, Eric. The Austrians: How They Live and Work. London: David and Charles, 1970. Wohlschlagl, Helmut. "Austria: Landscape and Regional Struc- ture." Pages 23-74 in Kurt Steiner (ed.), Modern Austria. Palo 277 Austria: A Country Study Alto, California: Society for the Promotion of Science and Scholarship, 1981. Wright, William E. (ed.). Austria since 1945. Minneapolis: Center for Austrian Studies, University of Minnesota, 1982. Chapter 3 Arndt, Sven W. Political Economy of Austria. Washington: Ameri- can Enterprise Institute, 1982. Austria. Austria Documentation. Austria for Investors: General Infor- mation. Vienna: Federal Press Service, 1990. Austria Documentation. The Rational Approach to Labor and Industry. Vienna: Federal Press Service, 1990. Austrian Information Service. Austria: Selected Economic Data. Vienna: Bundeswirtschaftskammer, 1992. . Austrian Museum for Economic and Social Affairs. Sur- vey of the Austrian Economy, 91-92: The Austrian Economy and Its International Position in Data, Diagrams, and Tables. Vienna: 1991. .... Austrian Museum for Economic and Social Affairs. Sur- vey of the Austrian Economy, 92-93: The Austrian Economy and Its International Position in Data, Diagrams, and Tables. Vienna: 1992. _. Austrian Museum for Economic and Social Affairs. Sur- vey of the Austrian Economy, 93-94: The Austrian Economy and Its International Position in Data, Diagrams, and Tables. Vienna: 1993. . Austrian Museum for Economic and Social Affairs. Sur- vey of the Austrian Economy, 94-95: The Austrian Economy and Its International Position in Data, Diagrams, and Tables. Vienna: 1994. . Bundeskammer der Gewerblichen Wirtschaft. "Bundes- sektion Geld-, Kredit-, und Versicherungswesen." Pages 61-73, 235-51 in Jahrbuch der Osterreichischen Wirtschaft, 1990. Vienna: Ungar, 1991. . Bundeskammer der Gewerblichen Wirtschaft. "Bundes- sektion Handel." Pages 225-34 in Jahrbuch der Osterreichischen Wirt- schaft, 1990. Vienna: Ungar, 1991. Osterreichisches Statistisches Zentralamt. Statistisches Hand- buch fur die Republik Osterreich, 1972. Vienna: 1972. . Osterreichisches Statistisches Zentralamt. Statistisches Hand- buch fur die Republik Osterreich, 1982. Vienna: 1982. Osterreichisches Statistisches Zentralamt. Statistisches Hand- buch fur die Republik Osterreich, 1991. Vienna: 1991. Osterreichisches Statistisches Zentralamt. Statistisches Jahr- buch fur die Republik Osterreich, 1992. Vienna: 1992. 278 Bibliography Baratta, Mario von (ed.). Der Fischer Weltalmanach, 1994. Frank- furt: Fischer Taschenbuch Verlag, 1993. Butschek, Felix. ''EC Membership and the 'Velvet' Revolution: The Impact of Recent Political Changes on Austria's Economic Position in Europe." Pages 62-80 in Giinter Bischof and An- ton Pelinka (eds.), Austria in the New Europe. (Contemporary Aus- trian Studies, No. 1.) New Brunswick, New Jersey: Transaction Books, 1993. The Europa World Year Book, 1993, 1. London: Europa, 1993. Gruenwald, Oskar. "The Political Economy of Austria." Pages 150-55 in Sven W. Arndt (ed.), Austrian Industrial Structure and Industrial Policy. Washington: American Enterprise Institute, 1982. Haschek, Helmut H. "Trade, Trade Finance, and the Austrian Economy." Pages 176-98 in Sven W. Arndt (ed.), Austrian In- dustrial Structure and Industrial Policy. Washington: American En- terprise Institute, 1982. Organisation for Economic Co-operation and Development. OECD Economic Surveys: Austria (annuals 1972 and 1981-1982 through 1992-1993). Paris: 1972 and 1982-93. Osterreichisches Institut fur Wirtschaftsforschung. "Kennzahlen zur Konjunkturlage der Industriebranchen," WIFO Monatsbericht [Vienna], April 1992, 5, 25, 164-70, 178, 180-81. Stankovsky, Jan. Der Aussenhandel Osterreichs: Entwicklung und Struktur. Vienna: Bundeswirtschaftsakademie, 1990. Starik, W. "Die Osterreichische Energieversorgung — Bisherige Entwicklung und Perspektiven, " Osterreichische Zeitschrift fur Elek- trizitdtswirtschaft [Vienna], August, 1991, 281-88. Sweeney, Jim, and Josef Weidenholzer (eds.). Austria: A Study in Modern Achievement. Aldershot, United Kingdom: Avebury, 1988. Traxler, Franz. "Austria: Still the Country of Corporatism." Pages 270-97 in Anthony Ferner and Richard Hyman (eds.), Indus- trial Relations in the New Europe. Oxford: Blackwell, 1992. (Various issues of the following periodicals were also used in the preparation of this chapter: Austria Today [Vienna]; Econo- mist [London]; Economist Intelligence Unit, Country Profile: Aus- tria [London] and Country Report: Austria [London]; Financial Times [London]; Foreign Broadcast Information Service, Daily Report: West Europe; Handelsblatt [Diisseldorf] ; Osterreichisches Institut fur Wirtschaftsforschung, Statistische Berichten [Vienna]; and Trend [Vienna].) 279 Austria: A Country Study Chapter 4 Austria. Federal Press Service. The Mass Media in Austria. Vienna: 1990. . Federal Press Service. The Political System in Austria. Vienna: 1987. Bischof, Gunter, and Anton Pelinka (eds.). Austria in the New Eu- rope. (Contemporary Austrian Studies, No. 1.) New Brunswick, New Jersey: Transaction Books, 1993. Dyk, Irene. "The Austrian People's Party." Pages 67-81 in Jim Sweeney and Josef Weidenholzer (eds.), Austria: A Study in Modern Achievement. Aldershot, United Kingdom: Avebury, 1988. The Europa World Year Book, 1993, 1. London: Europa, 1993. Fabris, Heinz. "The Media." Pages 236-44 in Jim Sweeney and Josef Weidenholzer (eds.), Austria: A Study in Modern Achievement. Aldershot, United Kingdom: Avebury, 1988. Feichdbauer, Hubert. "The Media." Pages 279-300 in Kurt Stern- er (ed.), Modern Austria. Palo Alto, California: Society for the Promotion of Science and Scholarship, 1981. Fellner, Fritz. "The Genesis of the Austrian Republic." Pages 1-22 in Kurt Steiner (ed.), Modern Austria. Palo Alto, California: So- ciety for the Promotion of Science and Scholarship, 1981. Fischer, Heinz. "Das Parlament." Pages 96-117 in Handbuch des politischen Systems Osterreichs, eds., Herbert Dachs et al. Vienna: Manz, 1991. . "Die Reform der Nationalratswahlordnung, 1992." Pages 341-60, in Osterreichisches Jahrbuchfiir Politik, 1992, eds., Andreas Khol, Giinther Ofner, and Alfred Stirnemann. Vienna: Verlag fur Geschichte und Politik, 1993. Fitzmaurice, John. Austrian Politics and Society Today: In Defence of Austria. New York: St. Martin's Press, 1990. Flanz, Gisbert H., and Peter Knize. "Austria." Pages 1-133 in Albert P. Blaustein and Gisbert H. Flanz (eds.), Constitutions of the Countries of the World. Dobbs Ferry, New York: Oceana, 1985. Frischenschlager, Friedhelm. "Zur Praxis der parlamentarischen Arbeit im Osterreichischen Nationalrat." Pages 723-56 in Her- bert Schambeck (ed.), Osterreichs Parlamentarismus: Werden und Sys- tem. Berlin: Duncker und Humblot, 1986. Gerlich, Peter. "Government Structure: The Principles of Govern- ment." Pages 209-22 in Kurt Steiner (ed.), Modern Austria. Palo Alto, California: Society for the Promotion of Science and Scholarship, 1981. Haerpfer, Christian. "Austria: The 'United Greens' and the 'Al- ternative List/Green Alternative'. " Pages 23-38 in Ferdinand 280 Bibliography Muller- Rommel (ed.), New Politics in Western Europe: The Rise and Success of Green Parties and Alternative Lists. Boulder, Colorado: Westview Press, 1989. Handbuch des politischen Systems Osterreichs. (Eds., Herbert Dachs et al.) Vienna: Manz, 1991. Klose, Alfred. Machtstrukturen in Osterreich. Vienna: Signum, 1987. Kneucker, Raoul F. "Public Administration: The Business of Government." Pages 261-78 in Kurt Steiner (ed.), Modern Aus- tria. Palo Alto, California: Society for the Promotion of Science and Scholarship, 1981. Kostelka, Peter, and Ralf Unkart. "Vom Stellenwert des Fede- ralismus in Osterreich." Pages 337-60 in Heinz Fischer (ed.), Das politische System Osterreichs. Vienna: Manz, 1991. Kramer, Helmut. "Strukturentwicklung der Aussenpolitik: 1945- 1990." Pages 637-57 in Handbuch des politischen Systems Osterreichs, eds., Herbert Dachs et al. Vienna: Manz, 1991. Luif, Paul. "Austrian Neutrality and the Europe of 1992." Pages 19-41 in Giinter Bischof and Anton Pelinka (eds.), Austria in the New Europe. (Contemporary Austrian Studies, No. 1.) New Brun- swick, New Jersey: Transaction Books, 1993. Luther, Kurt Richard. "Consociationalism, Parties, and the Party System." Pages 45-98 in Kurt Richard Luther and Wolfgang C. Muller (eds.), Politics in Austria: Still a Case of Consociational- ism? London: Frank Cass, 1992. Luther, Kurt Richard, and Wolfgang C. Muller. "Consociation- alism and the Austrian Political System." Pages 1-15 in Kurt Richard Luther and Wolfgang C. Muller (eds.), Politics in Austria: Still a Case of Consociationalism? London: Frank Cass, 1992. Luther, Kurt Richard, and Wolfgang C. Muller (eds.). Politics in Austria: Still a Case of Consociationalism? London: Frank Cass, 1977. Mitten, Richard. The Politics of Antisemitic Prejudice: The Waldheim Phenomenon in Austria. Boulder, Colorado: Westview Press, 1992. Muller, Wolfgang C. "Austrian Governmental Institutions: Do They Matter?" Pages 99-131 in Kurt Richard Luther and Wolf- gang C. Muller (eds.), Politics in Austria: Still a Case of Consocia- tionalism? London: Frank Cass, 1992. Neisser, Heinrich. "Die Reform der Nationalratswahlordnung. " Pages 361-85 in Osterreichisches Jahrbuch fur Politik, 1992, eds., Andreas Khol, Gunther Ofner, and Alfred Stirnemann. Vienna: Verlag fur Geschichte und Politik, 1993. Neuhofer, Hans. "Gemeinden." Pages 774-84 in Handbuch des politischen Systems Osterreichs, eds., Herbert Dachs et al. Vienna: Manz, 1991. 281 Austria: A Country Study Nick, Rainer, and Anton Pelinka. Osterreichs politische Landschaft. Innsbruck: Haymon Verlag, 1993. Parlamentarismus in Osterreich. Vienna: Jugend und Volk, 1984. Nick, Rainer, and Sieghard Viertler. "Survey of Austrian Politics." Pages 193-210 in Giinter Bischof and Anton Pelinka (eds.), Aus- tria in the New Europe. (Contemporary Austrian Studies, No. 1 .) New Brunswick, New Jersey: Transaction Books, 1993. Osterreichisches Jahrbuch fur Politik, 1992. (Eds., Andreas Kohl, Giin- ther Ofner, and Alfred Stirnemann.) Vienna: Verlag fur Geschichte und Politik, 1993. Pelinka, Anton. "The Peculiarities of Politics in Austria: The Con- stitution, Federalism, Parliamentary and Social Democracy." Pages 47-54 in Jim Sweeney and Josef Weidenholzer (eds.), Aus- tria: A Study in Modern Achievement. Aldershot, United Kingdom: Avebury, 1988. Prisching, Manfred. "The Transformation of Austria in the Con- text of New Europe." Pages 81-106 in Giinter Bischof and An- ton Pelinka (eds.), Austria in the New Europe. (Contemporary Austrian Studies, No. 1.) New Brunswick, New Jersey: Trans- action Books, 1993. Quendler, Franz. "Osterreich in internationalen Organisationen." Pages 705-18 in Handbuch des politischen Systems Osterreichs, eds., Herbert Dachs et al. Vienna: Manz, 1991. Steiner, Kurt (ed.). Modern Austria. Palo Alto, California: Society for the Promotion of Science and Scholarship, 1981. Stuhlpfarrer, Karl. Austria: Permanently Neutral — Austrian Foreign Policy since 1945. Vienna: Federal Press Service, 1987. Sully, Melanie A. A Contemporary History of Austria. London: Rout- ledge, 1990. . Political Parties and Elections in Austria. London: C. Hurst, 1981. Sweeney, Jim, and Josef Weidenholzer (eds.). Austria: A Study in Modern Achievement. Aldershot, United Kingdom: Avebury, 1988. Weidenholzer, Josef. Der bsterreichische Weg: Einsichten und Aussichten. Vienna: Zimmermann und Karrer, 1989. Wicha, Barbara. "Parteienfmanzierung in Osterreich." Pages 489-526 in Anton Pelinka and Fritz Plasser (eds.), Das oster- reichische Parteiensystem. Vienna: Bohlau, 1988. Widder, Helmut. "Der Nationalrat. " Pages 261-336 in Herbert Schambeck (ed.), Osterreichs Parlamentarismus : Werden und System. Berlin: Duncker und Humblot, 1986. 282 Bibliography (Various issues of the following periodicals were also used in the preparation of this chapter: Austria Today [Vienna]; Der Spiegel [Ham- burg]; Economist [London]; Economist Intelligence Unit, Country Report: Austria [London]; Foreign Broadcast Information Service, Daily Report: West Europe; New York Times; Profil [Vienna]; and Washington Post.) Chapter 5 Amnesty International. Amnesty International Report, 1991. New York: 1991. . Amnesty International Report, 1993. New York: 1993. Austria. Osterreichischer Bundesverlag. Ein Heer furjede Jahreszeit: Das osterreichische Bundesheer. Vienna: 1985. . Osterreichisches Statistisches Zentralamt. Statistisches Hand- buch fur die Republik Osterreich, 1990. Vienna: 1990. Bauer, Robert A. (ed.). The Austrian Solution: International Conflict and Cooperation. Charlottesville: University Press of Virginia, 1982. Bell, Raymond E., Jr. "Austria and Conflict in Central Europe," Military Review, 70, No. 2, February 1990, 48-54. Clarke, John L. "Austria's Raumverteidigung: Central Front So- lution?" Armed Forces Journal, 123, No. 2, September 1985, 46-48. Crankshaw, Edward. The Fall of the House of Habsburg. New York: Viking, 1963. Danspeckgruber, Wolfgang F. "Neutrality and the Emerging Eu- rope." Pages 265-88 in Wolfgang F. Danspeckgruber (ed.), Emerging Dimensions of European Security Policy. Boulder, Colora- do: Westview Press, 1991. "Security in Europe 1992." Pages 107-36 in Giinter Bischof and Anton Pelinka (eds.), Austria in the New Europe. (Con- temporary Austrian Studies, No. 1.) New Brunswick, New Jer- sey: Transaction Books, 1993. Defense and Foreign Affairs Handbook. (Ed. , Gregory R. Copley.) Alex- andria, Virginia: International Media, 1990. Dupuy, R. Ernest, and Trevor N. Dupuy. The Encyclopedia of Mili- tary History: From 3500 B. C. to the Present. New York: Harper and Row, 1986. Fernau, Heribert, Johann Maurer, and Franz Stier Schneider. Daten, Trends, und Interpretationen zum Budget der osterreichischen Landesver- teidigung. Vienna: Institut fur Militarische Sicherheitspolitik an der Landesverteidigungsakademie, 1990. 283 Austria: A Country Study Hacksey, Kenneth, and William Woodhouse. Penguin Encyclopedia of Modern Warfare: 1850 to the Present Day. London: Viking, 1991. Hagelin, Bjorn. Neutrality and Foreign Military Sales. Boulder, Colora- do: Westview Press, 1990. Harnischmacher, Robert. "The Federal Gendarmerie in Austria," International Journal of Comparative and Applied Criminal Justice, 13, No. 1, Winter 1989, 123-34. International Crime Statistics, 1987-1988. St. Cloud, France: Inter- national Criminal Police Organization, n.d. Jager, Friedrich. Das grosse Buck der Polizei und Gendarmerie in Oster- reich. Graz: H. Weishaupt Verlag, 1990. Jelavich, Barbara. Modern Austria: Empire and Republic, 1815-1986. Cambridge: Cambridge University Press, 1987. Katzenstein, Peter J. Disjoined Partners: Austria and Germany since 1815. Berkeley: University of California Press, 1976. Keegan, John. World Armies. Detroit: Gale, 1983. Kurian, George Thomas. World Encyclopedia of Police Forces and Penal Systems. New York: Facts on File, 1989. Luchak, John M. "Austria and U.S. Security," Parameters, 18, No. 3, September 1988, 87-93. Luif, Paul. "Austrian Neutrality and the Europe of 1992." Pages 19-41 in Giinter Bischof and Anton Pelinka (eds.), Austria in the New Europe. (Contemporary Austrian Studies, No. 1.) New Brunswick, New Jersey: Transaction Books, 1993. The Military Balance, 1991-1992. London: International Institute for Strategic Studies, 1991. The Military Balance, 1992-1993. London: International Institute for Strategic Studies, 1992. The Military Balance, 1993-1994. London: International Institute for Strategic Studies, 1993. The Military Balance, 1994-1995. London: International Institute for Strategic Studies, 1994. Miller, Charles (ed.). "Republic of Austria." Pages 37-41 in Charles Miller (ed.), Air Forces of the World, 1988-89. Geneva: Interavia, 1988. Pleiner, Horst. "Das Bundesheer: In einem veranderten Umfeld — neue Aufgaben, Strukturen, Wege in die Zukunft," Osterreichische Militarische Zeitschrift [Vienna], 31, No. 2, May-June 1993, 197-206. Pochhacker, Christian. "Austria: Equipped to Defend Neutrali- ty?" Defence [London], 20, No. 10, October 1989, 777-81. Sauerwein, Brigitte. "Current Issues of Austrian Defense," Inter- national Defense Review [London], 22, No. 2, March 1989, 299-301. " 284 Bibliography Skuhra, Anselm. "Austria and the New Cold War." Pages 1 17-47 in Bengt Simdelius (ed.), The Neutral Democracies and the New Cold War. Boulder, Colorado: Westview Press, 1987. Spannocchi, Emil. "Defense Policy from the Austrian Point of View." Pages 381-91 in Kurt Steiner (ed.), Modern Austria. Palo Alto, California: Society for the Promotion of Science and Scholarship, 1981. Stone, Norman. The Eastern Front, 1914-1917. New York: Scrib- ner's, 1975. Thompson, Wayne C. Western Europe, 1990. Washington: Stryker- Post, 1990. United States. Arms Control and Disarmament Agency. World Mili- tary Expenditures and Arms Transfers: 1990. Washington: GPO, 1991. Department of State. Background Notes: Austria. (Depart- ment of State Publication No. 7955.) Washington: GPO, De- cember 1992. Department of State. Country Reports on Human Rights Prac- tices for 1990. (Report submitted to United States Congress, 102d, 1st Session, Senate, Committee on Foreign Relations, and House of Representatives, Committee on Foreign Affairs.) Washing- ton: GPO, 1991. Department of State. Country Reports on Human Rights Prac- tices for 1991. (Report submitted to United States Congress, 102d, 2d Session, House of Representatives, Committee on Foreign Affairs, and Senate, Committee on Foreign Relations.) Washing- ton: GPO, 1992. Department of State. Country Reports on Human Rights Prac- tices for 1992. (Report submitted to United States Congress, 103d, 1st Session, Senate, Committee on Foreign Relations, and House of Representatives, Committee on Foreign Affairs.) Washing- ton: GPO, 1993. . Department of State. Country Reports on Human Rights Prac- tices for 1993. (Report submitted to United States Congress, 103d, 2d Session, House of Representatives, Committee on Foreign Affairs, and Senate, Committee on Foreign Relations.) Washing- ton: GPO, 1994. . Department of State. Patterns of Global Terrorism, 1989. Washington: 1990. Vetschera, Heinz. "Austria." Pages 59-77 in Richard E. Bissell and Curt Gasteyger (eds.), The Missing Link: West European Neu- trals and Regional Security. Durham: Duke University Press, 1990. Wiener, Friedrich. Die Armeen der neutralen und blockfreien Staaten Eu- ropas: Organisation, Kriegsbild, Waff en, und Gerat. Vienna: Ueber- reuter, 1986. 285 Austria: A Country Study Zeger, Hans G., et al. Alpen-Stasi: die II. Republik in Zerrspiegel der Staatspolizei. Linz: Edition Sandkorn, 1990. (Various issues of the following periodicals were also used in the preparation of this chapter: DMS Market Intelligence Report; Economist Intelligence Unit, Country Report: Austria [London]; Foreign Broad- cast Information Service, Daily Report: West Europe; Jane's Defence Weekly [London]; New York Times; and Washington Post.) 286 Glossary Bretton Woods system — Established in 1944, the system aimed at stabilizing exchange rates by fixing the price of gold at US$35 per troy ounce. Other currencies were linked to the system ac- cording to their exchange rates with the United States dollar. The system was replaced by one of floating exchange rates in the early 1970s. See also European Monetary System (EMS). d'Hondt method — Also known as the highest-average method of determining the allocation of seats to political parties after an election. The d'Hondt method was devised by a Belgian, Vic- tor d'Hondt, to be used in electoral systems based on propor- tional representation. In addition to Belgium, the method has been adopted by Austria, Finland, Portugal, and Switzerland. Under this method, voters do not choose a candidate but vote for a party, each of which has a published list of candidates. The party winning the most votes in a constituency is award- ed the area's first seat, which goes to the candidate at the top of the winning party's list. The total vote of this party is then divided by two, and this amount is compared with the totals of the other parties. The party with the greatest number of votes at this point receives the next seat to be awarded. Each time a party wins a seat, its total is divided by the number of seats it has won plus one. The process continues until all the seats in a constituency are awarded. The d'Hondt method slightly favors large parties. European Community (EC) — See European Union (EU). European Economic Area (EEA) — An economic area encompass- ing all the members of the European Union (EU — q. v. ) and the European Free Trade Association (EFTA — q. v.), with the exception of Switzerland. Created in May 1992, the EEA went into effect on January 1, 1994. The EEA is a single market for the free movement of labor, services, capital (with some restrictions on investments), and most products. EFTA mem- bers have agreed to accept EU regulations in many areas, in- cluding company law, education, environmental protection, mergers, and social policy. European Economic Community (EEC) — See European Union (EU). European Free Trade Association (EFTA) — Founded in 1960, EFTA aims at supporting free trade among its members and in- creasing the liberalization of trade on a global basis, particularly 287 Austria: A Country Study within Western Europe. In 1993 the organization's member states were Austria, Finland, Iceland, Liechtenstein, Norway, Sweden, and Switzerland. European Monetary System (EMS) — Established in 1979 by the European Economic Community (EEC — q. v. ), the EMS was created to stabilize currency values because the Bretton Woods system (q. v.) proved not fully satisfactory. European Monetary Union (EMU) — The EMU is a plan for a sin- gle European central bank and for a single European currency to replace national banks and currencies for those European states that qualify. European Union (EU) — Until November 1993, the EU was known as the European Community (EC). The EU comprises three communities: the European Coal and Steel Community (ECSC), the European Economic Community (EEC), and the European Atomic Energy Community (Euratom). Each community is a legally distinct body, but since 1967 they have shared com- mon governing institutions. The EU forms more than a frame- work for free trade and economic cooperation: the signatories to the treaties governing the communities have agreed in prin- ciple to integrate their economies and ultimately to form a political union. Belgium, France, Italy, Luxembourg, the Netherlands, and the Federal Republic of Germany (West Ger- many) were charter members of the EU; Britain, Denmark, and Ireland joined on January 1 , 1973; Greece became a mem- ber on January 1, 1981; and Portugal and Spain entered on January 1, 1986. exchange rate mechanism (ERM) — Mechanism established in 1979 to regulate currency exchange rates in the European Monetary System (EMS — q.v.). Member currencies are permitted to fluc- tuate in value only within a narrow margin (the so-called snake). gross domestic product (GDP) — The total value of goods and ser- vices produced by the domestic economy during a given period, usually one year. Obtained by adding the value contributed by each sector of the economy in the form of profits, compen- sation to employees, and depreciation (consumption of capi- tal). Most GDP figures in this book are based on GDP at factor cost. Real GDP is the value of GDP when inflation has been taken into account, gross national product (GNP) — Obtained by adding the gross domestic product (GDP — q. v. ) and the income received from abroad by residents, less payments remitted abroad to nonresi- dents. Real GNP is the value of GNP when inflation has been taken into account. 288 Glossary Hare system — Also known as the single transferable vote formula. The Hare system was developed in the nineteenth century by Thomas Hare, a British political reformer, to create constituen- cies with multiple representatives in electoral systems based on proportional representation. Ballots are used on which a voter may rank his or her choices in order of preference. Any candi- date who has received enough first-preference votes to meet a quota wins a seat. Votes above this quota are transferred to the candidates with second-preference votes, and each of those who meet the quota is awarded a seat. The process continues until all seats in a constituency are filled. Organisation for Economic Co-operation and Development (OECD) — Established in 1961 to replace the Organisation for European Economic Co-operation (OEEC), the OECD is an international organization composed of the industrialized mar- ket economy countries (twenty-four full members as of 1993). The OECD seeks to promote economic and social welfare in member countries, as well as in developing countries, by provid- ing a forum in which to establish and coordinate policies. Organisation for European Economic Co-operation (OEEC) — See Organisation for Economic Co-operation Development (OECD). schilling (S) — National currency. Consists of 100 groschen. In re- lation to the United States dollar, the average annual exchange rate was S13.2 in 1989, S11.4 in 1990, S11.7 in 1991, S11.0 in 1992, and SI 1.4 in 1993. Western European Union (WEU) — Founded in 1948 to facilitate West European cooperation in economic, social, cultural, and defense matters. Reactivated in 1984 to concentrate on the defense and disarmament concerns of its members, the WEU is headed by a council consisting of its members' ministers of foreign affairs and defense. The council meets twice a year; lower-level WEU entities meet with greater frequency. In late 1993, WEU members included Belgium, Britain, France, Ger- many, Greece, Italy, Luxembourg, the Netherlands, Portu- gal, and Spain. 289 Index abortion, 83, 103; church opposition to, xxvii, 102; as controversial issue, 61; legalized, 62, 81 acquired immune deficiency syndrome (AIDS), 112 Adler, Viktor, 190 Administrative Court, 180, 181, 186 Administrative Police, 224, 254, 256 Advisory Committee for Economic and Social Questions, 139 Afghanistan: immigrants from, 84; Soviet invasion of, 216 Agrarian League (Landbund), 36 agricultural: credit cooperatives, 158; policy, 143-44; production, 146 agriculture, 143-46; in the Alps, 73; decline in, xxvi, 140, 143; employment in, 68, 136, 141, 145; government role in, 143-45; as percentage of gross domestic product, xxvi, 141, 143; price controls for, 144; quotas for, 144; in so- cial partnership, xxxvi, 138, 144; struc- ture of, 145-46; subsidies for, xxx, 132, 144-45 AIDS. See acquired immune deficiency syndrome air force, 223, 242-44; aircraft of, 230; insignia, 244; materiel, 241; mission of, 242; number of personnel, 234; organi- zation of, 244; ranks, 245; training, 244; uniforms, 244 Alemanni. See Swabians Alexander I, 20 Allied Council, 51 Allied occupation, 48-56, 228; distribu- tion of power in, 50-51; economy un- der, 122-26; end of, 4, 56; legacy of, 4; national identity under, 79; nation- alization under, xxvi, 52, 124-25; zones in, 50-51 Allies: economic support by, 54, 121, 122; position of, on Austria, 48 ALO. See Alternative List of Austria Alps, 70-73; agriculture in, 73; climate in, 75; tourism in, 156; transit through, 75 AL Technologies, 142 Alternative Liste Osterreichs. See Alter- native List of Austria Alternative List of Austria (Alternative Liste Osterreichs — ALO): in elections of 1983, 63, 201; in elections of 1986, 201; platform of, 200 Amnesty Act (1948), 53 Anabaptists, 9-10 Andrassy, Gyula, 29 Anschluss {see also Nazi occupation), xxiv, 3, 44-47, 228; constitution suspended under, 169; debate over, 94, 206; desire for, 22, 24, 29, 36, 38, 39, 121; econo- my under, 121; end of, 50; impact of, on national identity, 79; international reactions to, 44; support for, 37, 45 anti-Semitism, xxiv, 32, 37, 93, 251; de- bate over, 94; under Nazi occupation, 46 Arab-Israeli conflict, 216 Arbeiterzeitung, 211 Arbeitsbeirat. See Labor Advisory Council Arbeitskammertag. ^Chamber of Labor Conference Argentina: immigrants from, 84 aristocracy, 95; political power of, 32 armed forces {see also air force; army): commander in chief, 233-34; conscien- tious objectors, 239; conscription in, 226, 230, 234; exemptions from service in, 239; in Habsburg Empire, 224-26; materiel of, 223; missions of, 230; mobilization of, 226; morale of, 228; and neutrality, 232-33; number of per- sonnel in, 223, 226, 234, 240; organi- zation of, 223; reserves, 226, 231; restructuring of, 223; women in, 240 army {see also air force), 223, 235-37; ac- tive units of, 235; conscripts in, 237-40; demobilization of, 237; deployment of, 237; insignia, 244; materiel, 241-42; mission of, 234; number of personnel in, 228, 234, 237; organization of, 229, 235; ranks, 245; reconstituted, 228; term of service in, 239; training of, 235; uniforms, 244 attorneys, 183 Augustinians, 13 Ausgleich (Compromise) of 1867, 26, 226; implemented, 27 291 Austria: A Country Study Austria: in Dual Monarchy, 27; establish- ment of, after World War I, 35, 38-39; etymology of, 6, 7; in Quadruple Alli- ance, 20 Austria, Duchy of, 6-7 Austria, Margravate of, 6 Austria- Hungary (see also Dual Monar- chy), xxi-xxiii, 26-35, 226; Balkans partitioned by, 29; Bosnia and Herce- govina acquired by, 29-30, 33; in Dual Alliance, 30; foreign relations of, 27-28; government of, 27; materiel produced by, 248; migration within, 86; in Triple Alliance, 30, 34; war declared on Serbia by, 34; in World War I, 34 Austrian Airlines, 156; privatized, 128, 132, 156 Austrian Airtransport, 156 Austrian Federal Railroad (Osterreichische Bundesbahnen— OBB), 142, 152 Austrian Industries (see also nationaliza- tion): branches of, 142, 147; number of employees in, 142; restructured, 127, 128 Austrian People's Party (Osterreichische Volkspartei — OVP) (see also Christian Social Party), xxviii-xxxii, 4, 50, 194- 97, 217; auxiliary organizations of, 195-96; economy under, 127; in elec- tion of 1945, 51; in election of 1949, 54; in election of 1971, 61; in election of 1983, 63; in election of 1986, 190, 206; in election of 1990, 190, 207, 208; in election of 1991, 209; in election of 1992, 209; in election of 1994, xxxi- xxxii; in grand coalition, xxviii, 56-60, 167, 190, 195; in single-party govern- ment, 56-60; modifications in, 52-53; national conferences of, 195; newspaper of, 211; organization of, 195; platform of, 195; popularity of, 58; special in- terests of, 189 Austrian Radio and Television (Oster- reichischer Rundfunk— ORF), 156, 212 Austrian Spanish Cooperative Develop- ment, 248 Austrian Trade Union Federation (Oster- reichischer Gewerkschaftsbund — OGB), 136; membership in, 136; po- litical role of, 175; in social partnership, 125, 134, 138, 139 Austria Tabakwerke, 142 Austro-Hungarian Empire. See Austria- Hungary Austro-Piedmontese War (1859), 225 Avars, 5 Babenberg family, 6 Badeni, Kasimir, 31 balance of payments, 159-60 balance of trade, 160 Balkan League, 33 Balkan Peninsula: foreigners from, 94; partition of, 29; rivalries in, 29 Balkan War, First (1912), 33 Balkan War, Second (1913), 33 Bank Austria, 143, 158 banking, 158-59; regulation of, 136; sav- ings, 159 banks, 158; agricultural credit coopera- tives, 158; mortgage, 158; people's, 158; savings, 158 Baroque era, 13-15 Basic Law (1867), 170 Battle of Austerlitz (1805), 225 Battle of Custozza (1866), 225 Battle of Koniggratz (1866), 26, 225 Battle of Lechfeld (955), 6 Battle of Lissa (1866), 225 Battle of Magenta (1859), 225 Battle of Mohacs (1526), 9 Battle of Solferino (1859), 225 Battle of Wagram (1809), 225 Battle of White Mountain (1620), 12 Bauer, Otto, 38, 40 Bavarians, 3, 5 Benedictines, 13 Berlin blockade (1948), 55 Beust, Friedrich Ferdinand von, 26 Billa grocery stores, 150 birth control, 83; effect of, on population, 81 Blecha, Karl, 207 Bohemia, 9, 12; ethnic tensions in, 31; German speakers in, xxii; immigrants from, 88; Maria Theresa as queen of, 15; religious restrictions in, 12; riots in, 31 Bohemian Granite Massif, 73 Bonaparte, Napoleon: marriage of Marie Louise to, 19; opposition to, 18, 225 borders, 69; set by Congress of Vienna, 19; set by Treaty of St. Germain, 38-39, 86 292 Index Bosnia and Hercegovina: annexation of, by Austria-Hungary, 29, 30-31, 33 Bosnians: as refugees, 85 Brandt, Willy, 60 Bregenz, 74 Brenner Pass, 75; pollution in, 76; tran- sit through, 76, 152 Bretton Woods system, 126, 158, 162 Britain: in Crimean War, 25; in Europe- an Free Trade Association, 217; materiel from, 249; occupation of Aus- tria by, xxiv-xxv, 48-56; in Quadru- ple Alliance, 20; reaction of, to Anschluss, 44; relations with, 15, 21; in World War I, xxiii, 34 budget: structure of, 128 budget deficit: efforts to limit, 127; in magic pentagon, 130; in 1970s, 126; as percentage of gross domestic product, 126, 127; servicing, 127 Bulgarian Orthodox Church: official recognition of, 102 Bundesbank (Germany), 129, 130, 162; stability policy of, 140 Bundesheer (Federal Army). See army Bundespolizei. See Federal Police Bundesrat (Federal Council), 171, 179; established, 39; number of seats in, 179; powers of, 179 Bundesversammlung (Federal Assembly), 169, 179-80 Bundeswirtschaftskammer. See Federal Economic Chamber Burgenland, 69; emigration from, 80; ethnic composition of, 87-88, 90; seats in Bundesrat for, 179 Busek, Erhard, 197 cabinet, 171-72, 174-75; appointments to, 174-75; dismissal of, 175; members of, 174-75; powers of, 174 Calvinists, 102, 103 Cambodia: United Nations observer mis- sions in, 233 Canada, 252 CAP. See Common Agricultural Policy Carinthia, 69; ethnic composition of, 62, 87, 88; ethnic tensions in, 88; Haider as governor of, 198-99; political affili- ation in, 200; seats in Bundesrat for, 179; tourism in, 156; Yugoslavia's desire for, 88 Carinthia, Duchy of, 6 Carolingian Empire, 5-6 Carter, Jimmy, 216 Catholic Church, Old: official recognition of, 102 Catholic Church, Roman: concordat of 1855, 25, 32; concordat of 1934, 43, 47; concordat of 1960, 59; government re- lations with, 25, 42-43, 102; members of, xxvii, 102, 103; under Nazi occu- pation, 47, 102; official recognition of, 102; political power of, xxvii, 32, 36, 102, 103, 189, 191, 194; reestablish- ment of, 13; schools run by, 104 Catholic League: formed, 12 Catholics, Roman: conflicts of, with Prot- estants, 11-12 Celtic era, 4-5 central bank. See Nationalbank Central Flying School, 244 Central Office for Jewish Emigration (Zentralamt jiidischer Auswanderung — ZjA), 46 Chamber of Labor Conference (Arbeits- kammertag), 135 chambers of agriculture, 134-35, 143, 189, 196; functions of, 134, 135, 137; mem- bership in, 133-34; organization of, 134; in social partnership, 120, 125, 138 chambers of commerce, 134, 189, 196; es- tablished, 134; functions of, 134, 137; membership in, 133-34; organization of, 134; reform of, 208; in social part- nership, 120, 125, 138 chambers of labor, 135, 189, 196; estab- lished, 135; functions of, 134, 135, 137; membership in, 133-34; organization of, 134; reform of, 208; in social part- nership, 120, 125, 138 chancellor, 171-72, 174-75; powers of, 174, 234; role of, 174 Charlemagne, 5 Charles II, 14 Charles V: territories of, 8-9 Charles VI, 14 Charles Albert, 15 Chile: immigrants from, 84 Christian Corporatist State, 102 Christianity {see also under individual denomi- nations): conversion to, 6; evangeliza- tion in, 5-6 293 Austria: A Country Study Christian Social Party (Christlichsoziale Partei — CSP) (see also Austrian People's Party), xxiii-xxiv, xxviii, 32, 35, 36-37, 42, 102, 194; in elections of 1920, 40; in elections of 1930, 41; militias of, 227; platform of, 36-37, 39 Christlichsoziale Partei. See Christian So- cial Party Church of Jesus Christ of Latter-Day Saints. See Mormon Church church taxes, 104 Circle of Free Business Persons (Ring Freiheitlicher Wirtschaftstreibender — RFW), 189 Cis-Leithania (see also Austria), 27 Cistercians, 13 City Guard of Vienna, 253 civil code of 1811, 21 civil service, 183-84; military personnel in, 239; popular view of, 183; Proporz system in, xxviii-xxix, 183; reform of, 184; training academy for, 184 climate: Atlantic maritime, 75, 76-77; characteristics of, 75-76; continental, 75; Mediterranean, 75, 76, 77; and pol- lution, 76-77 coal: consumption of, 150; imports of, 149; sources of, 39 Columban, Saint, 5 Comecon. See Council for Mutual Eco- nomic Assistance Common Agricultural Policy (CAP), 145, 161 Common Market. See European Com- munity communications. See telecommunications Communist Party of Austria (Kom- munistische Partei Osterreichs — KPO), 38, 50; in election of 1945, 51; in elec- tion of 1949, 54; outlawed, 42; popular- ity of, 59 Comprehensive National Defense strate- gy, 230 Compromise of 1867. See Ausgleich of 1867 concentration camps: deaths in, 80, 90, 91; prisoners in, xxv, 52, 90 Conference of Presidents of the Chambers of Agriculture, 134 Conference on Security and Co-operation in Europe (CSCE), 157, 216 Congo: United Nations peacekeeping forces in, 232 Congress for the Future, 193 Congress of Vienna (1814-15), 19-21 Congress System, 20 constituent assembly, 22, 23 Constitutional Court, 178, 180-81, 186; members of, 180-81; president of, 180 constitutional framework, 168-71 constitution of 1849, 24 constitution of 1867 ("December Consti- tution"), 27; religious freedom under, 102 constitution of 1918, 35 constitution of 1920: amendments to, xxv, 168-69, 170-71; freedom of expression under, 210; individual rights under, 170; neutrality under, 213; suspended, 169, 172 constitution of 1934, 42-43 corporatist system, 189 Council for Mutual Economic Assistance (Comecon): trade with, 162 Council of the Austrian Chambers of Labor, 139 Council of Trent (1545-63), 10 Counter- Reformation, 3, 11-13, 101; ori- gins of, 10; policies, 13 coup d'etat, attempted: of 1934, xxiv, 43 Court of Arbitration, 182 courts: administrative, 180, 181; of ar- bitration, 182; constitutional, 178, 180-81; criminal, 253; district, 182; labor, 182; patent, 182; Proporz system in, 181; regional, 181-82; superior, 181; supreme, 181 Crankshaw, Edward, 226 Creditanstalt: collapse of, 41 Creditanstalt-Bankverein, 143, 158; privatized, 132 credit institutions: nationalized, 124-25 crime: categories of, 253; investigative de- tention for, 253; military, 245; rate, 249-50, 257; trials for, 253 Crimean War (1853-56), 25 crimes, war, 4, 53 Criminal Investigative Service, 224, 254 Croatia, 223; economic relations with, 162-63; recognition of, 219 Croats, xxii, 56; as ethnic minority, 87, 88, 89; immigration by, 5; under Nazi occupation, 46; rights for, 62, 171 CSCE. See Conference on Security and Co-operation in Europe CSP. See Christian Social Party 294 Index currency {see also schilling): common Eu- ropean, 120; policies, 120 current account: balance, 119; in magic pentagon, 130; in 1970s, 126 customs union, 160 Cyprus: United Nations peacekeeping forces in, 213, 224, 232 Czech language, 31 Czechoslovakia: creation of, 35; German- speaking minorities in, 86; population of, 39; refugees from, 81; in revolution of 1989, 218; Warsaw Pact invasion of, 58, 83, 230 Czech Republic, 223; border with, 69; joint venture agreements with, 162 Czechs: in Austria-Hungary, xxii, 27, 86, 88; as ethnic minority, 87, 89; govern- ment of, in exile, 35; as guest workers, 92; immigration by, 5, 83, 88; under Nazi occupation, 46; parliament boy- cotted by, 30; political participation by, 23, 31; as refugees, 83 Deutsche Arbeiterpartei. See German Workers' Party deutsche mark {see also currency; schill- ing): schilling tied to, 120, 130, 158, 162 divorce, 98; causes of, 99; rate, xxvii, 98-99, 103 Dollfuss, Engelbert, xxiv, 41, 227; killed, 43 Dollfuss government, xxiv, 41-43; fascist support for, 41; political parties under, 42, 191; state of emergency under, 42, 169 Drau River, 70 Drau River Valley: transit through, 75 Dual Alliance, 30 Dual Monarchy {see also Austria-Hun- gary): founded, 26-27; nationalities in, 27; negotiations for, 25; organiza- tion of, 26-27 Dachau: politicians imprisoned at, 52 Dairy Board, 144 Danube Confederation, 78-79 Danube River, 70; transportation on, 155 Danube River Basin, 73; climate in, 75; as defense zone, 231 Das Liberale Forum. See Liberal Forum, The deaths: causes of, 111; in concentration camps, 80; in World War I, 80; in World War II, 80 debt servicing, 120, 127 December Constitution. See constitution of 1867 defense, national, 233-49 defense industry, domestic, 241, 248; ex- ports, 248-49 defense spending: budget, 247-48; in Habsburg Empire, 225; as percentage of gross national product, 247; reluc- tance regarding, 247 de Gaulle, Charles, 57 demography, 80-86 denazification, 53 Denmark: in European Free Trade As- sociation, 217; military intervention by, 12 East Germany. See Germany EC. See European Community economic collapse of 1873, 31 Economic Commission: established, 125 economic infrastructure: under Nazi oc- cupation, 46 economic reform, 127-30 economic stabilization plan, 40, 121, 125 economy: adapting to European Commu- nity standards, 161; Allied support for, 54-55, 121, 125-26; and decline in agriculture, xxvi, 143; interwar, xxv, 39; under Metternich, 22; moderniza- tion of, xxvi, 46; under Nazi occupa- tion, 45-46; structure of, xxvi, 140-43 Edict of Tolerance (1781), 16 education {see also schools), 104-9; access to, xxvii, 68, 95; foreign children in, 106-7; government responsibility for, 192; higher, xxvii, 107-9; policy, 109; reform of, 106, 107; rigidity of, 105-6; technical, 106; two-track, 105; voca- tional, xxvii, 101, 106; of women, 101; of working class, 107 EE A. See European Economic Area EEC. See European Economic Com- munity EFTA. See European Free Trade As- sociation 295 Austria: A Country Study Egypt: United Nations peacekeeping for- ces in, 213 elections: of 1919, 38; of 1920, 40; of 1930, 41; of 1938 (Nazi plebiscite), 44-45; of 1945, 51-52; of 1949, 54; of 1970, 61, 192, 198; of 1971, 61, 192; of 1975, 61, 192; of 1979, 61, 192; of 1983, 63, 198, 200, 201; of 1986, 190, 201, 205-7; of 1990, 200, 207-8; of 1991, 208-9; of 1992, 209; of 1993, 210; of 1994, xxxi-xxxii electoral system, 186-88; districts in, 186; reform of, 61, 186, 208; vote-counting procedures in, 186-88 electric power: consumption of, 150; dis- tribution of, 150; generation of, 119, 150; hydroelectric power, 119, 149, 150 emigration, 46, 68, 80-81, 86, 91; from Eastern Europe, 83-84; from East Ger- many, 84 Emmerich Assmann, 248 employment: benefits, 61, 110; distribu- tion of, 124; in magic pentagon, 130; policies, 192; in retail trade, 150; of women, 83 Employment of Foreigners Law (1991), 92 EMS. See European Monetary System EMU. See European Monetary Union energy: consumption of, 149-50; policies, 149 energy installations: nationalized, 124-25 energy sector, 149-50; imports by, 149; regulation of, 136 Enlightenment: influence of, 16 Enns River, 70 environmental damage: as controversial issue, xxx, 61, 76-78, 167, 200-201, 217, 218; and decline in agriculture, 143, 144; to forests, 77; from north- western Europe, 76-77, 217, 218; from road traffic, 76, 155; from tourism, 77-78 equal rights law of 1976, 100 Equal Treatment Law (1979), xxviii, 100 ethnic groups (see also under ethnic minori- ties and individual groups): in Austria- Hungary, xxii, 27, 86 Ethnic Groups Law (1976), 89 ethnic minorities, 86-94; attitudes toward, 93-94; criteria of identification, 88-89; in Czechoslovakia, 86; in Ita- ly, 86-87; population of, 87, 89; rights for, 61, 62 Eugene of Savoy (prince), 14, 224 Europe: balance of power in, 21, 25, 27-28, 29; borders of, redrawn, 19; common currency for, 120; liberal up- risings of 1830s in, 21; system of alli- ances in, 34 Europe, Eastern: energy imports from, 149; immigrants from, 83-84, 94; joint ventures in, 120, 129, 162; refugees from, xxxii, 68, 81, 85, 94, 250; trade with, 162 Europe, Western: exports to, 119 European Community (EC) (see also Eu- ropean Union): attempts to join, xxx, 119, 160, 161, 168, 216-18; trade with, 217 European Economic Area (EEA), 163; formed, 119, 161; membership in, xxvi, xxx, 127, 143, 210; negotiations on, 155 European Economic Community (EEC): formed, 57; trade with, 63 European Free Trade Association (EFTA), xxvi, 57, 160-61; formed, 57; members of, 119, 160, 210, 217; trade with, 161 European Monetary System (EMS), 156; membership in, 162 European Monetary Union (EMU), 156, 161-62; convergence requirements for, 161-62; membership in, 161 European Recovery Program. See Mar- shall Plan European Telecommunications Satellite Organisation (Eutelsat), 156 European Transfer Express Freight Train System, 155 European Union (EU) (see also European Community), 73; membership in, xxvi, xxx-xxxi, xxxiii, 168, 196, 210, 218, 233; trade in, 121 Eutelsat. See European Telecommunica- tions Satellite Organisation Evangelical Union: attempts to join, 119; formed, 12 Exchange for Agricultural Products, 182 exchange rate, 158 exports (see also under individual products), 127, 159, 160; decline in, 129; of elec- tricity, 150; to Germany, 119, 129; of machinery and equipment, 160; of mili- tary materiel, 248-49; subsidies for, 144; to Western Europe, 119 296 Index families, 96-101; benefits, 113-14; changes in, 68; division of labor in, 100; illegitimacy in, 99; single-parent, 98; single-person, 98; size of, 96 farms: labor devoted to, 145-46; number of, 145; size of, 145 Fasslabend, Werner, 232 Fatherland Front (Vaterlandische Front), 42 Federal Army. See army Federal Assembly. See Bundesversamm- lung Federal Chamber of Trade and Com- merce, 134, 137, 139 Federal Chancellery, 174, 176 Federal Council. See Bundesrat Federal Economic Chamber (Bundeswirt- schaftskammer). See Federal Chamber of Trade and Commerce Federal Law on the Press and Other Jour- nalistic Media (1982), 211-12 Federal Police (Bundespolizei), 224, 254-55; deployment of, 254; duties of, 254; materiel of, 255; number of per- sonnel in, 255; organization of, 254-55; women in, 255 Federal Republic of Germany. See Ger- many Federation of Austrian Industrialists (Vereinigung Osterreichischer Indus- trieller— VOI), 134, 137-38; func- tions of, 137-38; membership of, 137 Ferdinand I: career of, 9; death of, 11; peace agreement of, with Turks, 11; religion under, 10 Ferdinand I of Austria, 21; abdication of, 23 Ferdinand II, 12 Ferdinand III, 13 Figl, Leopold, 56; as chancellor, 51, 54 Finance Equalization Law, 185 financial markets, 159 Financial Times "European 500," 143 First Republic (1918-38), 35-44; found- ed, 38; political factions in, xxv, 35r- 38 Fligerdi vision. See air force food: prices, 145, 191; production, 119; sources of, 39 foreigners: political campaign against, xxix-xx, xxi, 199, 209-10 foreign exchange: controls on, 128 foreign investment, 163 foreign loans, 40 foreign policy: under Franz Joseph, 26; under Kreisky, 62-63, 213-16; in 1950s, 56-58; in 1960s, 57-58; in 1980s and 1990s, xxx-xxxi, xxxii-xxxiii, 216-20 foreign relations, 213-20 foreign workers. See guest workers forestry: employment in, 68, 145; subsi- dies for, 144-45; workers in, 136 forests, 73; environmental damage to, 77; land area of, 145 Four Power Control Agreement (1946), 51-52; veto powers under, 51-52 Fourteen Points (Wilson), 35 FPO. See Freedom Party of Austria Fraktion Sozialistischer Gewerkschaftler. See Group of Socialist Trade Unionists France: in Crimean War, 25; materiel from, 233, 241, 242, 244, 249; military intervention by, 12; occupation of Aus- tria by, xxiv-xxv, 48-56; reaction of, to Anschluss, 44; relations with, 15, 27-28; retaliation by, 41; Second Republic of, 22; in World War I, xxiii, 34 Franche-Comte: in Habsburg Empire, 8 Franco-Prussian War (1870-71), 28 Franks, 5 Franz (husband of Maria Theresa), 15 Franz I (of Austria), 18; domestic poli- cies of, 21-22 Franz II (of Holy Roman Empire), 18 Franz Ferdinand (archduke): assassina- tion of, xxiii, 33-34, 227 Franz Joseph I: armed forces under, 225, 254; crowned, 24; death of, 34; foreign policy of, xxi, 26 Frederick III, 8; as Holy Roman Em- peror, 8 Frederick V, 12 Frederick the Great, 224 Free Business Association of Austria (Freier Wirtschaftsverband Oster- reichs— FWB), 188 Freedom Party of Austria (Freiheitliche Partei Osterreichs — FPO) {see also League of Independents), xxix-xxxii, 58-59, 197-200; auxiliary organiza- tions, 200; in election of 1970, 198; in election of 1971, 61; in election of 1983, 63, 198, 200; in election of 1986, 190, 206; in election of 1990, 190, 200, 207, 297 Austria: A Country Study 208; in election of 1991, 208-9; in elec- tion of 1992, 209; in election of 1994, xxxi-xxxii; founded, 197; members of, 59, 197, 200; platform of, 197-98; popularity of, 167, 190; structure of, 200 Freier Wirtschaftsverband Osterreichs. See Free Business Association of Austria Freiheitliche Partei Osterreichs. See Free- dom Party of Austria French Revolution, 18-19 Frischenschlager, Friedhelm, 193, 202 FSG. See Group of Socialist Trade Union- ists FWB. See Free Business Association of Austria Gail River, 70 GAL. See Green Alternative/Greens in Parliament Gall, Saint, 5 gas, natural: consumption of, 149; import of, 149; reserves, 150 Gastarbeiter . See guest workers GDP. See gross domestic product Gendarmerie, 224, 251, 254, 255; in Al- lied occupation, 228; created, 254; functions of, 254, 255-56; materiel of, 256; misconduct among, 256; number of personnel in, 255; organization of, 255; training of, 255; women in, 255 General Directorate for Public Security, 254 General Law for University Education (1966), 104 General Social Insurance Act of 1955, 109 geography, 69-78 geostrategic situation, 228-29 German Austrians: desire of, for union with Germany, 29, 36, 78-80, 188; in independent Austria, 35; politics of, xxii, xxiii-xxiv, 31, 36, 188 German Confederation, 19; dissolved, 26; restored, 24; revolutions of 1848 in, 22 German Democratic Republic. See Ger- many German Front, 33; platform of, 33 Germanic tribes, 3, 4-5 German People's Party (Grossdeutsche Volkspartei — Nationals), 36, 40; desire of, for unification, 39; in elections of 1919, 38 German Workers' Party (Deutsche Ar- beiterpartei), 36 Germany: border with, 69; division of, 55; in Dual Alliance, 30; economic re- lations with, 41, 120, 126, 129, 217; emigration from, 84; emigration to, 86; exports to, 119, 129, 217; influence in, 25-26, 27-28; relations with, 25, 29; trade with, 160; in Triple Alliance, xxi, 30, 34; in World War I, 34; in World War II, xxiv, 47-48 Gewerbeordnung. See Regulation of the Professions glasnost, 217 GNP. See gross national product Gorbach, Alphons, 58 Gorbachev, Mikhail, 217 government: administrative organization of, 69; branches of, 169; liberals in, 30-31; Nazi Party in, 38; Proporz sys- tem in, 54, 167, 175; reduction of, 128; relations of, with Catholic Church, 25, 42-43, 102; reorganization of, in 1848, 23-24; responsibilities of, 170; role of, in agriculture, 143-44 government, local, 185-86; federal con- trols on, 186; powers of, 185; purview of, 185-86; role of, 185 government, provincial, 169-70, 184-85; constitution of, 184; dissolution of, 184; elections for, 184; executive of, 184; legislation of, 184-85; members of, 184; purview of, 185 government, provisional, 48-50; recogni- tion of, 50-51 government spending: as percentage of gross domestic product, 127, 128 Grain Board, 144 grand coalition, xxviii, 56-60, 167, 189, 190, 205-7, 208; scandals in, 206-7; so- cial partnership under, 59-60, 189 Gratz, Leopold, 207 Graz: immigrants to, 88; riots in, 31 Greek Orthodox Church: official recog- nition of, 102 Green Alternative — Freda Meissner-Blau List, 201 Green Alternative/Greens in Parliament (Griine Alternative/Grime in Parla- ment— GAL), 201 ; in election of 1990, 208 298 Index Green parties, xxx, 77, 167, 200-201; in election of 1983, 201; in election of 1986, 190; in election of 1992, 209; in election of 1994, xxx, xxxi; future of, 201; origins of, 200; platforms of, 200, 217 Greens, The (Die Griinen), xxx-xxxi Grossdeutsche Volkspartei. See German People's Party gross domestic product (GDP): under Al- lied occupation, 125; growth, xxvi, 129; in magic pentagon, 130 gross domestic product fractions: agricul- ture, xxvi, 141, 143; budget deficit, 126, 127, 128; government services, 127, 128; industry, xxvi, 141, 146; mining, 149; retail trade, 150; services sector, xxvi, 141; subsidies, 128-29, 130; trade, xxvi, 159 Grossglockner Mountain, 70 Group of Socialist Trade Unionists (Frac- tion Sozialistischer Gewerkschaftler — FSG), 188, 194 Griine Alternative/Grime in Parlament. See Green Alternative/Greens in Par- liament Griinen, Die. See Greens, The guest workers, xxvii, 75, 87, 89, 91-93, 95, 119, 132-33; assimilation of, 93; entitlements for, 106-7; naturalization of, 92; number of, 83, 85, 133; popu- lar opinion toward, 93; as percentage of work force, xxvii, 133; population growth caused by, 81, 92; religious af- filiations of, 103; unemployment among, 129 Gypsies, 90-91; as ethnic minority, 87, 90; geographic distribution of, 90; un- der Nazi occupation, 90; popular opin- ion toward, 90, 91, 94; population of, 90; social organization of, 90 Habsburg, Rudolf von, 7 Habsburg Dynasty, xxi; branches of, 9; inheritable succession in, 8; privileges of, 8; rebellions against, 11-12; support for, 12-13, 36-37 Habsburg Empire, xxi-xxiii, 7-11; armed forces in, 224-26; borders of, redrawn, 19; collapse of, 3, 35; division of, 11; ethnic groups in, 18; extent of, 3; Hun- gary under, 14; organization of, 8; re- ligious tolerance in, 101-2; territories of, 8-9 Haider, Jorg, xxix-xxx, xxxi-xxxii, 167, 190, 198-99, 205-6, 207; background of, 198; as governor of Carinthia, 198-99; ideology of, 198, 199; xeno- phobia of, 199, 210 Hamburg power plant, 193, 202 health, 111-12; habits, 111 health benefits, 68 health care, 112; regulation of, 192 health care professionals, 112 health insurance, 112 Heer, Friedrich, 78 Heeresgliederung Neu. See New Army Structure Heimatbloc (Homeland Bloc), 41 Heimatschutz (Homeland Defense), 40-41 Heimwehr (Home Guard), 40-41 ; under Dollfuss, 41, 42 Hercegovina. See Bosnia and Hercegovina Hereditary Lands, 8-9, 12; created, 8 High Tauern Range, 75 Hirtenberger Patronenfabrik, 248 Hitler, Adolf, xxiv, 36; meeting of, with Schuschnigg, 43-44; plebiscite of 1938 under, 44-45 Holstein: control of, 26 Holy Alliance, 20 Holy Roman Empire, 6-8; dissolved, 19; emperors in, 7-8, 11, 12, 15; organi- zation of, 8; origins of, 6 Home Guard. See Heimwehr Homeland Bloc. See Heimatbloc Homeland Defense. See Heimatschutz hotels, 157 housing, 114-15; amount of, 114; expen- ditures for, 115; ownership of, 114-15; standards, 114; vacation, 115 Hungarian Plain, 73 Hungarian Revolution (1956), 83 Hungarians: as ethnic minority, xxii, 87, 88, 89; government of, in exile, 35; as guest workers, 92 Hungary, 12; border with, 69; captured by Habsburg Empire, 14; division of, 9; independence declared by, 24; joint venture agreements with, 162; under Maria Theresa, 17; negotiations with, 25; Protestant rebellion in, 11; recon- ciliation with, 26; resistance of, to 299 Austria: A Country Study Austrian government, 25; in revolution of 1989, 218; Soviet invasion of, 58, 229-30 immigration, xxvii, xxxi, 68, 80-81, 83-86; illegal, 85, 94, 209-10, 250; rate of, 83; waves of, xxix, 83 imports, 159, 160; of energy, 149; of machinery and equipment, 160; restric- tions on, 144 industrialization, 31-32, 124 industry, 146-50; under Allied occupa- tion, 125; competitiveness of, 147; decline in, 140; employment, 141-42; geographic distribution of, 146; growth of, 68; kinds of firms in, 146-47; na- tionalization of, 124; under Nazi occu- pation, 45; as percentage of gross domestic product, 141, 146; production costs in, 132; Proporz system in, 203; size of firms in, 142-43, 146; in social partnership, 138; subsidies for, 132 inflation: under Allied occupation, 125; interwar, 121; in magic pentagon, 130; in 1970s, 126; policies, 130 inland waterways, 70, 155 Innovation and Technology Fund, 132 Inn River, 70 Inn River Valley, 75; as defense zone, 231 Innsbruck, 74 insurance services: regulation of, 136 Intelsat. See International Telecommuni- cations Satellite Organization internal security, 249-58 International Atomic Energy Agency, 157, 213, 250 International Criminal Police Organiza- tion (Interpol), 257 International Telecommunications Satel- lite Opanization (Intelsat), 156 Interpol. See International Criminal Police Organization investment, 127 Iran: boycott of, 216; immigrants from, 84; materiel sold to, 248 Iranian Kurdish Democratic Party, 250 Iraq: United Nations observer missions on Iraq-Kuwait border, 233 Iron Ring government, 31 Islam: official recognition of, 102 Israel, 216; immigration to, 84; United Nations peacekeeping forces in, 213 Italianization campaign, 87 Italy, xxi, xxii, 26; border with, 69, 86; emigration to, 86; German- speaking minorities in, 86; reaction of, to An- schluss, 44; relations with, 25, 219; South Tirol ceded to, 39, 86-87; sup- port of, for Dollfuss, 41; trade with, 160; in Triple Alliance, 30, 34; in World War I, 227 Jagiellon family, 9 Jesuits, 13 Jews, 18, 84, 91; in Austria- Hungary, 86; emigration of, 46, 80, 91; as ethnic minority, 87, 89; extermination of, 46, 80, 91; immigration of, 80; political participation of, 30, 32; population of, 46, 91, 93, 103; restrictions on, 16, 91 JG. See Young Generation Jonas, Franz, 58, 61 Joseph II: death of, 18; penal code un- der, 252; reforms under, 16-18, 91 journalists, 212 Judaism: official recognition of, 102 judges, 180, 182, 253; appointment of, 253; selection of, 181, 182 judicial system, 180-83 Junge Generation. See Young Generation Jungk, Robert, 209 Karl (emperor), 34; abdication of, 35 Kirchschlager, Rudolf, 61 Klagenfurt, 74 Klagenfurt Manifesto (1965), 195 Klaus, Josef, 58, 59 Klestil, Thomas, 209 KO. See Konsum Osterreich Kommunistische Partei Osterreichs. See Communist Party of Austria Konsum Osterreich (KO), 142, 152 Korner, Theodor, 58 KPO. See Communist Party of Austria Kreisky, Bruno, xxviii, 56; background of, 60; as chancellor, 202, 216; as party chairman, 191-92, 206; use of televi- sion by, 174 Kreisky government, 60-63; civil service 300 Index under, 184; domestic policy under, 61-62; foreign policy under, 62-63, 213-16 Kiissel, Gottfried, 252 Kuwait: United Nations observer mis- sions on Iraq-Kuwait border, 233 Labor Advisory Council (Arbeitsbeirat), 138 labor unions (see also Austrian Trade Union Federation), 188, 217; functions of, 136, 137, 139; membership in, 136; in social partnership, 120, 125, 138, 140 Lager (social camps), xxiii-xxiv, 35, 95-96, 188-90; decline in, xxvii, xxix, 194, 196; strength of, 189 land: arable, 73, 74, 145; area, 69 Landbund. See Agrarian League Landtag. See government, provincial land use, 73 Lauda Air, 156 Law of October 26, 1955, 56, 171, 232 League of Austrian Business (Oster- reichischer Wirtschaftsbund — OWB), 188, 195-96 League of Austrian Farmers (Oster- reichischer Bauernbund — OBB), 188- 89, 196 League of Austrian Workers and Sal- aried Employees (Osterreichischer Arbeiter- und Angestelltenbund — OAAB), 188, 195 League of Independents (Verband der Unabhangigen — VdU) (see also Free- dom Party of Austria; Nazi Party), 53-54; in election of 1949, 54; forma- tion of, 53 League of Nations: financial support by, 121 legal system. See courts legislation: preparation of, 176, 178 Leitha Range, 73 Leitha River, 27 Leopold I, 14 Leopold II, 18 Liberal Forum, The (Das Liberale Fo- rum), xxxi, 167; formed, xxix, 199, 210 Liberal International, 197, 199, 210 liberalism: conflict of, with nationalism, 22-23 liberals: in government, 30-31 Liechtenstein: border with, 69 Linz: immigrants to, 88 livestock, 73 Livestock and Meat Commission, 144 living standards, 68, 120; improvements in, 95 Louis (king), 9 Louis XIV, 14 Louis XVI: marriage of, 15 Lower Austria, 69; seats in Bundesrat for, 179 Low Tauern Range, 75 Lutherans, 9, 102; number of, 102-3 Maastricht Treaty, 120 magic pentagon, 130 Magyars, 6 Maria Theresa: accession of, 15; Hun- gary under, 17; penal code under, 252; as queen of Bohemia, 15; reforms un- der, 16-18 Maria Theresa Military Academy, 239, 240 Marie Antoinette: marriage of, to Louis XVI, 15 Marie Louise: marriage of, to Napoleon, 19 Marlborough, Duke of, 224 marriage: age for, 98; frequency of, 96, 98; prerequisites for, 96 Marshall Plan (European Recovery Pro- gram), 54-55; aid under, 122; end of, 57; industry under, 125 materiel: acquisition of, 230, 233; air force, 230, 241; from Britain, 249; con- figuration of, 241; domestic, 241, 248-49; exports of, 248-49; from France, 233, 241, 242, 244, 249; from Netherlands, 241; from Soviet Union, 249; from Sweden, 233, 242-44, 249; from United States, 233, 241, 242, 244, 249 maternity benefits, 113 Matthias (king), 11 Maximilian I, 8 Maximilian III, 11 media, 210-13 medieval era, 5-7 Meissner-Blau, Freda, 201 Methodist Church: official recognition of, 102 301 Austria: A Country Study Metro SB-Grosshandel, 150 Metternich, Clemens von, 19, 21-22; at Congress of Vienna, 19; domestic poli- cies of, 21-22; economy under, 22; in- ternational developments under, 21 middle class, 95; political power of, 32 migration, 83, 124; within Austria- Hungary, 86 military: discipline, 245-47; justice, 245-47; policy, 230 military officers: commissioned, 239; in Habsburg Empire, 226; noncommis- sioned, 239, 240; promotion of, 239-40; surplus of, 240; training of, 239, 240 military strategy: area defense concept, 231, 235; deterrence, 230; in Habsburg Empire, 225; levels of threat in, 230-31; in World War I, 227 militias, 227 minerals, 147-49; production of, 149 mining, 147-49; employment in, 149; as percentage of gross domestic product, 149 ministries: distribution of, 175; number of, 175 Ministry for Education, 104 Ministry for Interior, 224, 254, 257 Ministry for Justice, 175, 206 Ministry for National Defense, 234 Ministry for Science and Research, 104 Ministry for Women's Affairs, 208 minorities. See ethnic minorities Mobil Oil, 150 Mock, Alois, xxx, 196-97, 206, 218, 219 monasteries, 5 Moravia, xxii, immigrants from, 88 Mormon Church (Church of Jesus Christ of Latter-Day Saints): official recogni- tion of, 102 Moscow Declaration (1943), 48 Mur River, 70 Mur River Valley, 75 Miirz River, 70 Miirz River Valley, 75 Muslims (see also Islam), 103 Napoleon III, 225 Napoleonic Wars, 225 Nationalbank, 158; monetary policies of, 120, 132; privatized, 128 National Council. See Nationalrat National Defense Academy, 239, 240 National Defense Council, 234; members of, 234 national identity, xxv, 3-4, 78-80; de- velopment of, xxv, 67, 68, 79-80; regional subcultures in, 74 nationalism, xxii, 3; conflict of, with liber- alism, 22-23 nationalist movement: anti-Semitism in, xxiv, 32; growth of, xxii, 32-33 Nationalists/Liberals (see also German People's Party), xxix, 35, 36, 188 nationalization (see also Austrian Indus- tries): under Allied occupation, xxvi, 52; of industry, 124 Nationalization Act (1946), 124 Nationalization Act (1947), 124 Nationalrat (National Council), 171-72, 175-79, 201, 210; candidates for, 177; committees in, 176, 178; competition in, 178-79; dissolution of, 177; estab- lished, 39; interpellation in, 177; Klubs (factions) in, 176-77; legislation in, 176; members of, 177-78; number of seats in, 177; powers of, 175-76; presi- dents of, 176; sessions in, 177; terms in, 177; women in, xxviii, 177 Nationals. See German People's Party National Socialist Act (1947), 53 National Socialist German Workers' Party (National-Sozialistische Deutsche Arbeiterpartei — NSDAP). See Nazi Party National Socialists. See Nazis National-Sozialistische Deutsche Ar- beiterpartei. See Nazi Party NATO. See North Atlantic Treaty Or- ganization Nazi occupation (see also Anschluss), xxiv, 3; anti-Semitism under, 46; Austrian Nazis under, 45; Catholic Church un- der, 47, 102; economy under, 45-46, 121; political parties under, 191; popu- lation policies under, 81, 88, 89; repres- sion under, 47; social policies under, 45-46 Nazi Party, 36, 204; influence of, 43-44; origins of, 36; outlawed, 42, 53; popularity of, 41; putsch by, 43 Nazis: as percentage of population, 53; political parties of, 197; registration of, 53 302 Index neoabsolutism, 22-26; failure of, 24-25 neo-Nazis, 251-52 Netherlands: in Habsburg Empire, xxi, 9; materiel from, 241 Neue Bahn (New Railroad), 152-54 Neue Kronen- Zeitung, 210 neutrality, xxx, xxxii-xxxiii, 55-56, 160, 168; and armed forces, 232-33; under constitution of 1920, 213; definition of, 57-58, 213; obstacles to, xxx, 55-56; under State Treaty of 1955, 223 New Army Structure (Heeresgliederung Neu), 223, 231-32, 235-37; personnel under, 240; reduction in strength un- der, 237 New Railroad. See Neue Bahn News, 211 newspapers (see also journalists; media), 210-12; circulation of, 210, 211; num- ber of, 211; party, 211; subsidies for, 211 Noricum (Celtic state), 4 Noricum (arms manufacturer), 248 North Atlantic Treaty Organization (NATO), 228-29, 233; founded, 55 Northern Alpine Foreland, 70-73; climate in, 75 North German Confederation, 26 Norway: in European Free Trade Associ- ation, 217 NSDAP. See National Socialist German Workers' Party nuclear power: as controversial issue, 61 , 77; plans for, 62 OAAB. See League of Austrian Workers and Salaried Employees OBB. See Austrian Federal Railroad OBB. See League of Austrian Farmers OECD. See Organisation for Economic Co-operation and Development OEEC. See Organisation for European Economic Co-operation Office of the People's Attorney, 183 OGB. See Austrian Trade Union Fed- eration oil (see also petroleum): embargo of 1970s, 62, 120, 126, 133; refining of, 150; reserves of, 150 Olympic Games, 1980 Summer, 216 OMV. See Osterreichische Mineralolver- waltung OPEC. See Organization of the Petrole- um Exporting Countries Operation Desert Shield, 233 Operation Desert Storm, 233 ORF. See Austrian Radio and Television Organisation for Economic Co-operation and Development (OECD), xxvi, 127 Organisation for European Economic Co- operation (OEEC), 54, 57 Organization of the Petroleum Exporting Countries (OPEC), 62, 250 Osterreichische Bundesbahnen. See Aus- trian Federal Railroad Osterreichische Landerbank, 158; priva- tized, 132 Osterreichische Mineralolverwaltung (OMV), 142, 143; petroleum refining by, 150 Osterreichische Post/Telegrafenverwal- tung (national postal service), 142; sav- ings in, 159 Osterreichischer Arbeiter- und An- gestelltenbund. See League of Austrian Workers and Salaried Employees Osterreichischer Bauernbund. See League of Austrian Farmers Osterreichischer Gewerkschaftsbund. See Austrian Trade Union Federation Osterreichischer Rundfunk. See Austrian Radio and Television Osterreichischer Wirtschaftsbund. See League of Austrian Business Osterreichisches Institut fur Wirtschafts- forschung (WIFO), 144 Osterreichische Volkspartei. See Austrian People's Party Ostrogoths, 5 Otakar II, 6-7 Ottoman Empire: Hungary in, 9 Otto the Great, 6 OVP. See Austrian People's Party OWB. See League of Austrian Business Palestine Liberation Organization (PLO): recognition of, 63, 216 Parity Commission for Prices and Wages, 59, 137, 139-40; established, xxvi, 59, 139; functions of, 139; members of, 139; subcommittees of, 139 303 Austria: A Country Study parliament. See Bundesrat; Bundesver- sammlung; Nationalrat Patent Court, 182 patronage, political {see also Proporz sys- tem): xxviii-xxix Peace of Aix-la-Chapelle (1748), 15 Peace of Westphalia (1648), 12-13 peasants, 94, 95; families of, 96, 98 penal codes, 21, 252-53; capital pun- ishment under, 252; torture under, 252 People's Defense. See Volkswehr periodicals, 211-12; subsidies for, 211 Perot, Ross, xxxii Perspectives '90, 192-93 Peter, Friedrich, 198 petroleum (see also oil): consumption of, 149; imports of, 149, 150; refining of, 150 Phryn Pass, 75 Pitterman, Bruno, 191 PLO. See Palestine Liberation Organi- zation Poland: emigration from, 83-84; in- dependence of, 35; military support from, 14; partitions of, 17; in revolu- tion of 1989, 218 Poles: as guest workers, 92; in Habsburg Empire, xxii, 18; immigration by, 83-84; politics of, 31; popular opinion of, 94; as refugees, 83-84 police. See Administrative Police; Crimi- nal Investigative Service; Federal Police; Gendarmerie; State Police political: affiliation, 103-4; asylum, 83-85, 209-10; system, diversity in, 167-68; unrest, 42 political parties (see also under individual par- ties): cooperation among, xxv, xxviii, 52; identification with, 190; outlawed by Dollfuss, 42 population, 80; age distribution in, 83; of Czechoslovakia, 39; density, 74; distri- bution of, 73-75, 81-82, 124; in 1843, 22; ethnic distribution in, 87, 89; growth, 80, 81; of guest workers, 83, 85, 92; of Gypsies, 90; of Jews, 46, 80, 91, 103; Nazi policies on, 81, 89; Na- zis as percentage of, 53; in 1900, 80; in 1919, 39; in 1991, 80; projected, 81; urban, 22; of Vienna, 22 population fractions: engaged in agricul- ture, xxvi, 68, 145; engaged in forestry, 68, 145; engaged in mining, 149; of ethnic minorities, 87, 89; working in services sector, xxvi, 60 population statistics: birth rate, xxvii, 80, 81, 85-86, 92, 96-98; death rate, 80; fertility rate, 81, 83, 96; growth rate, 22, 81; infant mortality rate, 81; life expectancy, 82, 111; mortality rate, 80 Porsche Holding, 142 Portugal: in European Free Trade Associ- ation, 217 postal service, 142 poverty, 96 Pragmatic Sanction, 15 president, 172-74; candidates for, 172; as commander in chief, 233; election of, 172-73; powers of, 173; pressing charges against, 173-74, 179; role of, 169, 173; succession to, 174; term for, 172 Presidential Conference of the Austrian Chambers of Agriculture, 139 Presidial Conference, 176 press {see also journalists; media; news- papers): under constitution of 1920, 210; slander by, 211-12 Presse, Die, 211 prices, 132; controls on, 144, 191; food, 145, 191 prisoners, 258 prison system, 257-58; population of, 258; sentences in, 252 privatization, 128, 132, 147, 192 professional associations, 188 professions, 136; regulation of, 135-36 Profil, 203, 204, 211 Proksch, Udo, 207 Proporz system, 54, 175, 181, 183, 203 prostitution, 252-53 Protestantism (see also under individual denominations): official recognition of, 102 Protestant Reformation, 9-10 Protestants: conflicts of, with Catholics, 11-12; number of, 102-3; rebellion by, in Hungary, 11; rights of, 16 provinces, 169-70 Prussia: military relations with, xxi, 224, 225; occupation of Poland by, 17; in Quadruple Alliance, 20; relations with, 21; unification of Germany by, 3, 28 Public Order Watch, 253 304 Index Qadhafi, Muammar al, 216, 250 Quadruple Alliance, 20 Raab, Julius, 56; as chancellor, 55, 58 Radetzky, Joseph, 23 radio, 156, 212-13; languages of broad- cast, 213; programming, 212-13; sta- tions, 212-13 railroad system, 152-54; construction of, 152-54; network, 152; passengers, 152 Reder, Walter, 193, 202 reform: under Joseph II, 16-18; under Maria Theresa, 16-18; under revolu- tion of 1848, 22 Reformation. See Protestant Reformation refugees, 83; from Eastern Europe, xxxii, 68, 81, 85, 94, 132, 223, 250; illegal, 94; as security threat, 232 Regulation of the Professions (Gewerbe- ordnung), 135-36 Reinthaller, Anton, 197 religion {see also under individual denomina- tions), 101-4; distribution of, in popu- lation, 103; of guest workers, 103; and political affiliation, 103-4; restrictions on, 12, 13; suppression of, 16 religious tensions, 11-12 religious tolerance, 16, 101-2 Renner, Karl, 37-38, 191; as chancellor, 38; as president, 51, 58; as head of provisional government, 48-50; plebi- scite under, 45 Renner government, 38 Republican Defense League (Repub- likanischer Schutzbund), 40, 227; per- sonnel strength of, 40; uprising of, 227-28 Republikanischer Schutzbund. See Re- publican Defense League Rerum Novarum (1891), 32, 138 Resident Alien Law (1993), 92, 199 retirement, 110-11; age for, 110; benefits, 110-11 revolutions of 1848, 22-26, 225 RFW. See Circle of Free Business Persons Rhine-Main-Danube Canal, 70; trans- portation on, 155 Riegler, Josef, 197 Ring Freiheidicher Wirtschaftstreibender. See Circle of Free Business Persons rivers, 70; drainage system, 70; transpor- tation on, 155 roads, 155; environmental damage from traffic on, 76, 155; freight transport on, 155 Roma. See Gypsies Roman Catholic Church. See Catholic Church, Roman Roman era, 4-5 Romania: refugees from, 81, 250 Romanian Orthodox Church: official recognition of, 102 Romanians: as guest workers, 92; in Habsburg Empire, xxii, 18; popular opinion of, 94 rural areas: social importance of, 144 Russia (see also Soviet Union): colonial ex- pansion by, 30; in Crimean War, 25; interests of, in Balkans, 29, 33; mili- tary support from, 14; occupation of Poland by, 17; in Quadruple Alliance, 20; relations with, 21; in World War I, 34 Russian Orthodox Church: official recog- nition of, 102 Russo-Turkish War (1877-78), 29 Ruthenians: in Habsburg Empire, 18 Sallaberger, Giinther, 206-7 SALT. See Strategic Arms Limitation Talks Salzach River, 70 Salzburg, 5-6, 18, 74; political affiliation in, 200; seats in Bundesrat for, 179; tourism in, 156-57 Salzburg Program (1972), 195 Salzburg Province, 69 SAP. See structural adjustment program scandals, 202-7; in grand coalition, 206-7; Lucona, 207; Reder, 193, 202; Sallaberger, 206-7; VOEST- Alpine, 203; Waldheim, 168, 203-5; wine, 202-3 Scharf, Adolf, 56, 58, 191 schilling {see also currency), 158; revalued, 126, 162; tied to deutsche mark, 120, 130, 162 Schleswig: control of, 26 Schmidt, Heide, 199, 209, 210 Schonerer, Georg von, 36 School Law (1962), 104, 106 305 Austria: A Country Study schools: Catholic, 104; elementary, 105; enrollment patterns in, 105, 106; higher, 105-7, 109; middle, 105-7, 109; private, 109; technical, 106; voca- tional, 106 Schuschnigg, Kurt von: as chancellor, xxiv, 43; meeting of, with Hider, 43-44 Schuschnigg government, 43-44; consti- tution suspended under, 169; Nazi in- fluence in, 43-44; political parties under, 191 Schwechat, 150, 156 SDAP. See Social Democratic Workers' Party Second Republic: founded, xxv, 48-50 security threats: levels of, 230-31; politi- cal instability as, 232; refugees as, 232; Serbia as, 33; Turkey as, 10-11; War- saw Pact as, 229 Seipel, Ignaz, 36; as chancellor, 40 self-administration associations, 139-40 Semmering Pass, 75 Serbia: expansion of, 30; Russia's protec- tion of, 33; as security threat, 33; war declared on, by Austria, 34; in World War I, 227 Serbian Orthodox Church, 103; official recognition of, 102 Serbs, xxii; as guest workers, 92; popu- lar opinion toward, 94 services sector, 150-59; employment in, 60, 142; growth of, 68, 140; as percen- tage of gross domestic product, xxvi, 141 Seven Weeks' War (1866), 26, 225 Seven Years' War (1756-63), 17 Seyss-Inquart, Arthur, 197 Siege of Vienna (1529), 10 Siege of Vienna (1683), 14 Silesia, xxii Single European Act, 127 Single Market, 143, 163 Sinowatz, Fred: as chancellor, 63, 192, 202 Sinti. See Gypsies SJO. See Socialist Youth of Austria skiing: environmental damage from, 77-78; and weather, 76 Skoda company, 248 Slavs: in Austria-Hungary, 27 Slovakia, 223; border with, 69; im- migrants from, 88; joint venture agree- ments with, 162 Slovaks: as ethnic minority, xxii, 87, 89; government of, in exile, 35; as guest workers, 92; immigration by, 5, 83; un- der Nazi occupation, 46; as refugees, 83 Slovenes, xxii, 56; as ethnic minority, 87, 88, 89; immigration by, 5; under Nazi occupation, 46; rights for, 62, 171 Slovenia, 223; border with, 69; econom- ic relations with, 162-63; recognition of, 219 Sobieski, Jan, 224 social class: importance of, 68, 94-95 Social Democratic Manifesto for the Year 2000, 194 Social Democratic Party of Austria (Sozi- aldemokratische Partei Osterreichs — SPO) (see also Social Democratic Wor- kers' Party; Socialist Party of Austria), 190-94; auxiliary organizations, 194; candidates for, 194; in election of 1992, 209; in election of 1994, xxxi-xxxii; federal conferences of, 194; member- ship in, 194; newspaper of, 211; organi- zation of, 194; platform of, 191-92, 193-94; women in, 194 Social Democratic Party of Austria Wom- en's Committee, 194 Social Democratic Workers' Party (Sozi- aldemokratische Arbeiterpartei — SDAP) (see also Socialist Party of Aus- tria), xxii, xxviii, 32, 35, 37-45, 102, 190-91; in elections of 1920, 40; in elec- tions of 1930, 41; founded, 32; militias of, 227; outlawed, 42; platform of, 32; popularity of, 40; role of, in govern- ment, 38; support of, for unification with Germany, 39 Social Insurance Act (1955), 109 Socialist Party of Austria (Sozialistische Partei Osterreichs — SPO) (see also So- cial Democratic Party of Austria; So- cial Democratic Workers' Party), xxviii-xxix, 4, 50, 188, 217; accommo- dation of, to church, 102; coalition with Freedom Party of Austria, 202-3; com- munication within, 192-94; economy under, 127; education reform under, 107; in election of 1945, 51; in election of 1949, 54; in election of 1970, 61, 192; in election of 1971, 192; in election of 1975, 192; in election of 1979, 192; in election of 1986, 190, 206; in elec- tion of 1990, xxviii-xxx, 190, 208; in 306 Index elections of 1991, 209; in grand coali- tion, xxviii, 56-60, 167, 190; under Kreisky, xxviii, 191-92; modifications in, 52, 192-94; platform of, 192; spe- cial interests of, 189 Socialist Youth of Austria (Sozialistische Jugend Osterreichs— SJO), 194 social partnership, xxi, xxvi, 59, 67, 120, 124, 138-40; agriculture under, 138, 144; incentives for, 124, 140, 167, 189; institutions in, 120, 125, 138; princi- ples of, 138-39 social security, xxvi-xxv, 68, 109-14, 191, 192, 218; organization of, 109-10; origins of, 109 social structure, xxvii, 94-96; and decline in agriculture, xxvi, 143 Society of Jesus. See Jesuits Southeastern Alpine Foreland, 73; climate in, 75 South Tirol, 86-87, 219; autonomy for, 56-57, 87, 219; ceded to Italy, 39, 86-87; terrorism in, 219, 251 Soviet Union {see also Russia): confisca- tion of Austrian assets by, 52, 122, 124; and detente with United States, 168, 213; emigration from, 84; glasnost in, 217; invasion of Afghanistan by, 216; invasion of Hungary by, 58, 229-30; materiel from, 249; occupation of Aus- tria by, xxiv-xxv, 48-56; reparation payments to, 122; role of, in occupa- tion, xxv, 54, 56 Sozialdemokratische Arbeiterpartei. See Social Democratic Workers' Party Sozialdemokratische Partei Osterreichs. See Social Democratic Party of Austria Sozialistische Jugend Osterreichs. See So- cialist Youth of Austria Sozialistische Partei Osterreichs. See So- cialist Party of Austria Spain: in Habsburg Empire, xxi, 9 Spar Osterreich grocery stores, 150 Spezialfahrzeuge AG, 248 SPO. See Social Democratic Party of Austria SPO. See Socialist Party of Austria Staatspolizei. See State Police Standard, Der, 211 Stapo. See State Police Starhemberg, Ernst Riidiger von (prince), 41, 224 State Police (Staatspolizei — Stapo), 224, 254, 255; illegal intelligence activities of, 256; restructuring of, 256 state secretaries, 175 State Treaty (1955), xxxii, 4, 55-56, 79, 160; borders under, 171; government under, 171; minority rights under, 62, 88, 171; neutrality under, 223, 232; reparation payments under, 122 Steger, Norbert, 198, 202 Stephen (king), 6 Steyr: immigrants to, 88 Steyr-Allradtechnik, 248 Steyr-Daimler-Puch, 241, 248, 249 Steyr-Mannlicher, 248 Stock and Commodity Exchange, 182 Stock Exchange Act (1989), 128 Strategic Arms Limitation Talks (SALT), 63 Streicher, Rudolf, 209 strikes, 140; general, 42, 227 structural adjustment program (SAP): need for, 147 Styria, 69; seats in Bundesrat for, 179; transit through, 75 Styria, Duchy of, 6 subsidies: for agriculture, xxx, 132, 144, 145, 218; attempts to reduce, 128- 29, 147; for nationalized industry, 132; for newspapers and periodicals, 211; as percentage of gross domestic product, 128-29, 130; policies governing, 130-32 suffrage. See voting suicide, 112 Supreme Court, 181 Swabians, 3, 5 Sweden: defense spending in, 247; in European Free Trade Association, 217; materiel from, 233, 242-44, 249; mili- tary intervention by, 12; military train- ing by, 244; military troop strength of, 240 Switzerland: border with, 69; defense spending in, 247; emigration to, 86; in European Free Trade Association, 217; military troop strength of, 240; trade with, 160 Syria: United Nations peacekeeping mis- sions in, 224, 233 Taaffe, Eduard, 31 Tdglich Alles, 210 307 Austria: A Country Study Tauern Pass, 75 taxes: church, 104; income, 110; reform of, 129; social security, 109-10 telecommunications, 156; regulation of, 136; workers in, 136 telephones, 156 television, 156; cable, 212; channels, 212; languages of broadcast, 213; program- ming, 212; use of, in politics, 174 terrorism, 219, 250 Third Reich: Austrian Nazis in, 45 Thirty Years' War (1618-48), 11-12; reconstruction following, 13 Tirol, 69; population density of, 74; seats in Bundesrat for, 179; tourism in, 156 Tito, Josip Broz, 88 topography, 70-73; drainage system, 70 tourism, 156-58; environmental damage from, 77-78; government support for, 144; revenues from, 156, 160; and weather, 76 trade, domestic: employment in, 150; as percentage of gross domestic product, 150; regulation of, 136; retail, 150- 52 trade, foreign (see also balance of trade; ex- ports; imports), 159-60, 161; deficit, 119; as percentage of gross domestic product, 169 transit, 74-75, 83; through Brenner Pass, 76, 152; by emigrants, 84 transportation, 152-56; air service, 152; barge service, 70; bus service, 152; rail- roads, 152; regulation of, 136; river, 70; workers in, 136 Treaty of St. Germain (1919), 38, 86 Treaty of Utrecht (1713), 14 Trenck Military Sports Group, 251 Trend, 211 Trentino-Alto Adige. See South Tirol Triple Alliance (1882), 30, 34 Triple Entente, 33 Tulln-Langenlebarn Air Base, 242 Turkey: in Crimean War, 25; peace agreement of, with Ferdinand, 11; as security threat, 10-11; siege of Vienna by, 10, 224 Turkish wars, 14 Turks: as guest workers, 92, 103, 133; popular opinion toward, 94 Tyrolean Airways, 156 Uberfremdung, xxix Uganda: immigrants from, 84 unemployment, 41; benefits, 110; of col- lege graduates, 109; insurance, 110; interwar, 121; under Nazi occupation, 45; rate, 125-26, 127, 129, 133 unification of Austria with Germany. See Anschluss Union of Arts, Journalism, and the Professions, 136 Union of Commercial, Clerical, and Technical Employees, 136 United Austrian Iron and Steel Works (Vereinigte Osterreichische Eisen- und Stalhwerke— VOEST-Alpine), 142, 147; financial scandal in, 203, 248; materiel manufactured by, 248; restruc- turing of, 206 United Greens of Austria (Vereinigte Grime Osterreichs — VGO): in election of 1983, 63, 201; in election of 1986, 201; in election of 1990, 208; platform of, 200 United Nations: membership in, xxxii, 213; peacekeeping forces, 219-20 ; peace- keeping missions, 168, 213, 223-24, 232-33, 244; voting in, 216 United Nations City, 157 United Nations Industrial Development Organization, 213 United Nations Universal Declaration of Human Rights (1948), 170 United States, xxiii, xxiv-xxv, 252; aid from, 122, 124; and detente with Soviet Union, 168, 213; immigration to, 80; materiel from, 233, 241, 242, 244, 249; occupation of Austria by, xxiv-xxv, 48-56; in World War I, 34 United States Arms Control and Disar- mament Agency, 249 United States Department of Justice, 204 universities, 107-9; attrition rate, 109; enrollment in, 107; overcrowding in, 107 University of Vienna, 104 University Organization Law (1975), 104 Upper Austria, 69; seats in Bundesrat for, 179; transit through, 75 urban areas: population in, 22 urbanization, 31-32 urban migration, 68 308 Index Vandals, 5 Vaterlandische Front. See Fatherland Front VdU. See League of Independents Venice: military support from, 14 Verband der Unabhangigen. See League of Independents Vereinigte Griine Osterreichs. See United Greens of Austria Vereinigte Osterreichische Eisen- und Stalhwerke. See United Austrian Iron and Steel Works Vereinigung Osterreichischer Indus- trieller. See Federation of Austrian In- dustrialists VGO. See United Greens of Austria Vienna: as center for international negoti- ations, xxxii, 63, 250; ethnic minori- ties in, 87, 88, 90; growth of, 17; guest workers in, 92; immigrants to, 88; oc- cupied by Napoleon, 225; office space in, 163; politics in, xxiv, 40; popula- tion in, 22; port of, 155-56; as province, 69; riots in, 31; seats in Bun- desrat for, 179; siege of (1529), 10, 224; siege of (1683), 14, 224; tourism in, 157 Vienna stock exchange, 159 Viennese Basin, 73, 75 Visigoths, 5 VOEST- Alpine. See United Austrian Iron and Steel Works VOL See Federation of Austrian Indus- trialists Volkswehr (People's Defense): founded, 38; suppressed, 40 Vorarlberg, 69; seats in Bundesrat for, 179; tourism in, 156 voting: age for, 188; participation in, 188; reform, 31; rights, 191 Vranitzky, Franz, xxviii, xxxi, 205, 208; background of, 192; as chancellor, xxxi, 192, 205, 218, 219 wages, 129, 191; collective bargaining for, 110; in social partnership, 125; of wom- en, 101 Waldheim, Kurt, xxxii, 4, 62, 93-94, 209; international disapproval of, 204-5; as president, 192, 203-5; pres- sure on, to resign, 205; scandal involv- ing, 168, 203-5; wartime service of, 203-4 War of the Austrian Succession (1740- 48), 15, 224 War of the Spanish Succession (1701-14), 14, 224 Warsaw Pact: breakup of, 231; invasion of Czechoslovakia by, 58, 83, 230; as security threat, 229 Wehrmacht, xxiv, 47, 228 welfare, xxvi-xxvii, 68, 109-14 West Germany. See Germany Western European Union (WEU), xxxii Wiener, 211 Wienerberger Baustoffindustrie, 143 WIFO. See Osterreichisches Institut fur Wirtschaftsforschung Wilson, Woodrow, 35 Windischgratz, Alfred, 23 wine scandal, 203 Wochenpresse, 211 women, 99-101; in armed forces, 240; education of, 101; employment of, xxviii, 83, 101; equality for, xxviii, 61, 100; income of, xxvii, 101; marriage of, xxvii, 96, 98; maternity benefits for, 113-14; in police force, 255; in poli- tics, xxvii, 177, 194 Women's Omnibus Law (1993), xxviii, 100 workers: benefits for, 61, 110; in services sector, 60 workers, foreign. See guest workers workforce, 119; in agriculture, 141; guest workers as percentage of, 133; in indus- try, 141-42; percentage of, in labor unions, 136; in services sector, 142, 150 working class, 95; families of, 98; univer- sity education for, 107 works councils, 137 World Jewish Council, 204 World War I, xxi, xxiii, 33-34, 226-27; Austria's liabilities in, 38; deaths in, 80, 227; purpose of, 226-27; Russia's with- drawal from, 34; strategy in, 227; Unit- ed States entry into, 34 World War II, xxiv, 47-48, 228; Austria in, 47-48; Austrian Nazis in, 45; deaths in, 80, 90, 228; German defeat in, 47-48 Young Generation (Junge Generation — JG), 194 309 Austria: A Country Study Yugoslavia: civil war in, xxxii, 232; refu- gees from, xxxii, 81, 85, 103, 219, 250; territorial claims of, 55, 88 Zentralamt judischer Auswanderung. See Central Office for Jewish Emigration Zentralsparkasse, 158 ZjA. See Central Office for Jewish Emigration Zwentendorf nuclear power plant, 62, 77 310 Contributors Steven R. Harper is a government affairs analyst for the Earth Observation Satellite Company. Lonnie Johnson is coeditor of the quarterly Higher Education Science & Research in Austria for the Austrian Academic Exchange Ser- vice and is the author of Introducing Austria: A Short History and a forthcoming book on Central Europe for Oxford University Press. David E. McClave, formerly a Soviet affairs analyst at the Fed- eral Research Division, Library of Congress, is an indepen- dent researcher and writer on Central and East European politics and environmental issues. John F. Schaettler is a foreign affairs analyst for the Department of the Army. W.R. Smyser teaches and writes about European political econo- my and is the author of The German Economy: Colossus at the Crossroads. Eric Solsten is Senior Research Specialist in West European Af- fairs, Federal Research Division, Library of Congress. Jean R. Tartter is a retired Foreign Service Officer who has writ- ten extensively on Western Europe for the Country Studies series. 311 Published Country Studies (Area Handbook Series) 550-65 Afghanistan 550-87 Greece rcn no Albania c cn 7Q Guatemala 550-44 Algeria 550-174 Guinea 550-59 Angola 550-82 Guyana and Belize 550-73 Argentina 550-151 Honduras 550-169 Australia 550-165 Hungary 550-1 /o Austria 550-zl India 550-175 Bangladesh 550-154 Indian Ocean 550-170 Belgium 550-39 Indonesia 550-66 Bolivia 550-68 Iran 550-20 Brazil 550-31 Iraq 550-168 Bulgaria 550-25 Israel ooU-ol Burma c cn 1 on jjU-1oZ italy 550-50 Cambodia 550-30 Japan 550-166 Cameroon 550-34 Jordan 550-159 Chad 550-56 Kenya 550-77 Chile 550-81 Korea, North JJI/-DU v^nina 4.1 Korea, South 550-26 Colombia 550-58 Laos 550-33 Commonwealth Caribbean, 550-24 Lebanon Islands of the 550-91 Congo 550-38 Liberia 550-90 Costa Rica 550-85 Libya JJU - Cote d'lvoire (Ivory Coast) ^Rfl 179 Nlalawi 550-152 Cuba 550-45 Malaysia 550-22 Cyprus 550-161 Mauritania 550-158 Czechoslovakia 550-79 Mexico 550-36 Dominican Republic and 550-76 Mongolia Haiti 550-52 Ecuador 550-49 Morocco 550-43 Egypt 550-64 Mozambique 550-150 El Salvador 550-35 Nepal and Bhutan 550-28 Ethiopia 550-88 Nicaragua 550-167 Finland 550-157 Nigeria 550-155 Germany, East 550-94 Oceania 550-173 Germany, Fed. Rep. of 550-48 Pakistan 550-153 Ghana 550-46 Panama 313 550-156 Paraguay 550- -53 Thailand 550-185 Persian Gulf States 550- -89 Tunisia C C A A O 550-42 Peru CCA 550- -80 Turkey 550-72 Philippines 550- -74 Uganda 550-162 Poland 550- -97 Uruguay 550-181 Portugal 550- -71 Venezuela 550-160 Romania 550- -32 Vietnam 55U-3/ Rwanda and Burundi CCA ooO- 1 OQ -183 Yemens, Ihe c C/l C 1 jjU-jI Saudi Arabia oou- QQ -yy Yugoslavia CCA "7A 550-/0 Senegal c c a 550- -o/ Zaire 550-180 Sierra Leone 550- -75 Zambia 550-184 Singapore 550- -171 Zimbabwe c c a o<; 55U-00 Somalia 550-93 South Africa CCA AC Soviet Union 550-179 Spain 550-96 Sri Lanka 550-27 Sudan 550-47 Syria 550-62 Tanzania 314 PIN: 027043-000