Austria

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2

World War II and Allied Occupation

As a province of the German Reich, Austria was firmly harnessed to the Nazi military organization. After World War II began in 1939 Germany ruthlessly exploited the human and material resources of Austria. Thousands of Austrian soldiers fought for Hitler on the Russian front. In October 1943 the chiefs of state of the United States, Britain, and the Union of Soviet Socialist Republics (USSR) signed the Moscow Declaration, which proclaimed the reestablishment of an independent Austria as one of the Allied war aims. Soviet troops liberated the eastern part of Austria, including Vienna, in April 1945. Socialist leader Karl Renner was chosen to head a provisional government.

After the war Austria was divided into four zones of occupation controlled, respectively, by the United States, France, Britain, and the USSR. Vienna was similarly divided. By the terms of a June 1946 agreement, the Austrian government received qualified authority over the entire country, including the right to legislate and to administer the laws. The occupation powers retained authority on matters such as demilitarization and the disposal of German-owned property. German economic assets in each zone were assigned to the respective occupying power. Laws passed in 1946 and 1947 eliminated Nazi influence from public life, but former Nazis without criminal records were allowed to participate in general elections in 1949.

The Austrian government, elected in November 1945, faced immediate problems that severely taxed its limited powers. The war had shattered industry and disrupted agricultural production and transportation and communication systems. The economy was in chaos. The people of Austria had faced near starvation. The first task of the Figl government was to institute a relief program. Austria’s economic recovery was greatly facilitated by United States aid given under the European Recovery Program. By 1951 industrial production had exceeded prewar peaks; it continued to rise in the succeeding years. The government encouraged economic development by nationalizing utilities and some industries and by embarking on a program of public spending.

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Restoration of Sovereignty

The most significant event in the postwar era was the restoration of Austrian sovereignty in May 1955, after long negotiations between the USSR on one side, and the United States, Britain, and France on the other. Finally, in exchange for Soviet concessions Austria promised “…not to join any military alliances or permit any military bases on its territory.” The four Allies and Austria signed the State Treaty on May 15, 1955, formally reestablishing the Austrian republic. The treaty prohibited Anschluss between Austria and Germany, denied Austria the right to own or manufacture nuclear weapons or guided missiles, and obligated Austria to give the USSR part of its crude oil output for years to come. In December 1955 Austria became a United Nations member.

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The Second Republic

From 1945 until 1966 Austria was governed by a coalition of the Socialist and People’s parties. The number of positions each party received depended on its share of votes in parliamentary elections. This framework was extended to the economic sphere, as the state, industry, labor, and agricultural interests developed a partnership and created a modified market economy. Prosperity rested in part on nationalized industries, such as electric power plants and oil refineries; the government also controlled the banks. A new Austrian national consciousness developed based on shared experiences of wartime devastation, reestablishment of national sovereignty, successful reconstruction of the country, and the international prestige gained from Austria’s unique position as a bridge between East and West.

The coalition weathered occasional differences and the loss of prewar and wartime leaders. President Renner died in December 1950 and was succeeded by the Socialist Party leader, Theodor Körner. While Socialist candidates were elected to the presidency (until 1986), the People’s Party supplied all the federal chancellors until 1970. In 1957 Austria became embroiled in a dispute with Italy over the status of Austrians in Trentino-Alto Aldige (South Tirol), which had been under Italian rule since 1919. The settlement finally reached in 1969 called for implementation of a 1946 agreement guaranteeing the linguistic and cultural rights of the German-speaking Austrian population.

In 1960 Austria became a signatory to the pact establishing the European Free Trade Association. The government announced in July 1961 that it would seek an association with the European Economic Community (EEC) that was compatible with its military neutrality. The initial Socialist Party opposition to participation gradually waned, and in 1972 Austria signed a bilateral free-trade agreement with the EEC.

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The Kreisky Chancellorship

The Socialists won a narrow electoral victory in 1970, which for the first time made them the largest party in the Nationalrat. Socialist leader Bruno Kreisky was appointed chancellor and formed the first all-Socialist cabinet in Austrian history. The Kreisky era was marked by modernization and a dramatic increase in the standard of living for people in all social classes. Many social and labor reforms were introduced, and the government spent heavily on job creation and subsidies. Kreisky’s foreign policy initiatives gave Austria a position in international affairs far beyond its size. Despite his popularity and achievements, opposition developed around environmental issues, financial scandals, proposed tax increases, and especially the building of a nuclear power plant near Vienna (see Nuclear Energy). When antinuclear forces won a narrow victory in a 1978 referendum, the government was forced to abandon the nearly completed plant. Kreisky resigned in 1983, after the Socialists lost their absolute majority in the Nationalrat.

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New Problems and Opportunities

The new Socialist chancellor, Fred Sinowatz, formed a coalition with the Freedom Party; however, the alliance collapsed in 1986 when the Freedom Party took a sharp turn to the right under its new leader, Jörg Haider. Mismanagement and layoffs in the public sector coupled with controversy over privatization fueled discontent with the government, the Socialists, and the political patronage system. The presidential election in 1986 was won by the People’s Party candidate, Kurt Waldheim, former secretary general of the United Nations, despite allegations that he had lied about his complicity in Nazi atrocities while serving in the German army during World War II. The vote reflected the ambivalent attitude of many Austrians toward their country’s Nazi past.

Franz Vranitzky, another Socialist, took office as chancellor after parliamentary elections in November 1986, forming a coalition with the People’s Party. His government had to deal with continuing cutbacks in the public sector, high budget deficits, and international unease over Waldheim’s election. The coalition survived the elections of October 1990, but lost seats to the right-wing Freedom Party. Because of Austria’s international isolation, Waldheim was prevailed upon not to seek reelection in 1992. The People’s Party candidate, Thomas Klestil, a career diplomat and former ambassador to the United States, was elected president in 1992, partly on the promise to press forward Austria’s application to join the European Union (EU). In 1994, five years after it was first submitted, Austria’s application to join the EU was endorsed by the European Parliament and approved by Austrian voters in a nationwide referendum. The country officially joined the EU on January 1, 1995.

In the 1994 parliamentary election, the ruling coalition of the Social Democratic Party and the People’s Party retained a legislative majority but lost 23 seats. It was the worst showing by the coalition since 1945, reflecting rising dissatisfaction with the government’s direction. The Freedom Party, which advocated greater restrictions on Austria’s ethnic minorities, continued to make gains, winning a total of 42 seats in the Nationalrat. In October 1995 the ruling coalition collapsed over differences on how to handle Austria’s budget deficit.

In the December 1995 general election, both ruling parties were slightly strengthened. After agreeing on a package of austerity measures, they resumed their coalition in March 1996, with the Social Democrat Vranitzky as chancellor. (The Socialist Party had renamed itself the Social Democratic Party in 1991.) In January 1997 Vranitzky resigned as chancellor and leader of the Social Democratic Party. He was succeeded in both positions by Finance Minister Viktor Klima.

In April 1998 Thomas Klestil was elected to another six-year term as president. He received more than 63 percent of the vote, the second best showing ever in a presidential election in Austria.

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