Background Note: Austria

PA Source: Office of Public Communication, Bureau of Public Affairs Description: Historical, Political and Economic Overviews of the Countries of the World Date: Oct, 15 199210/15/92 Category: Country Data Region: Europe Country: Austria Subject: Travel, History, International Organizations, Trade/Economics, Military Affairs, Cultural Exchange, State Department [TEXT]

Official Name:

Republic of Austria


83,857 sq. km. (32,377 sq. mi.); slightly smaller than Maine.
Capital--Vienna (pop. 1.7 million). Other cities-- Graz, Linz, Salzburg, Innsbruck.
Mountainous and hilly.
Continental temperate.
Noun and adjective--Austrian(s).
Population (1991):
7.8 million.
Annual growth rate:
Ethnic groups:
German 98%, Croatian, Slovene.
Roman Catholic 89%.
German 98%.
Years compulsory--9. Attendance--95%. Literacy--98%.
Infant mortality rate--8/1,000. Life expectancy-- 72 yrs. men, 79 yrs. women.
Work force (3.4 million):
Industry and commerce--35%. Agriculture and forestry--7%.
Parliamentary democracy.
1920 (reinstated December 1945).
Executive--Federal President (chief of state), chancellor (head of government), cabinet. Legislative--bicameral Federal Assembly (parliament). Judicial--Constitutional Court, Administrative Court, Supreme Court.
Political parties (in parliament):
Social Democratic Party, People's Party, Freedom Party, Green-Alternative Movement (environmental party).
Universal over 19.
Administrative subdivisions:
Nine Laender (provinces).
Defense (est.):
1% of GDP.
Three horizontal bands--red, white, and red; flag may also have the national emblem, a black eagle, centered in the white band.
GDP (1991):
$163 billion.
Per capita income (1991):
Natural resources:
Iron ore, crude oil, natural gas, timber, tungsten, magnesite, lignite, cement.
Agriculture (3.3% of 1991 GDP):
Products--livestock, forest products, grains, sugar beets, potatoes.
Industry (40% of 1991 GDP):
Types--iron and steel, chemicals, capital equipment, consumer goods.
58% of 1990 GDP.
Trade (1991):
Exports--$41 billion: iron and steel products, timber, paper, textiles, electro-technical machinery, construction and industrial machinery, chemical products. Imports- -$51 billion: machinery, vehicles, chemicals, iron and steel, metal goods, fuels, raw materials, foodstuffs.
Principal partners
--European Community, European Free Trade Association, United States
Exchange rate (1991 avg.):
11 Austrian schillings=US$1.


Austrians are a homogenous people; 98% are native German speakers. Only two significant minority groups exist--about 15,000 Slovenes in Carinthia (south-central Austria) and some 18,000 Croatians in Burgenland (on the Hungarian border). The Slovenes form a closely knit community. Although their rights are protected by law and respected in practice, there has been some controversy over the use of the Slovenian language in schools where there is a Slovene majority. The present boundaries of Austria--once the center of the empire which was the second largest state in Europe--were established in accordance with the Treaty of St. Germain in 1919. Many Austrians, particularly near Vienna, still have relatives in Czechoslovakia and Hungary. About 89% of all Austrians are Roman Catholic. The church abstains from political activity; however, lay Catholic organizations are aligned with the conservative People's Party. The Social Democratic Party long ago shed its anti-clerical stance. A small Protestant minority is located mainly in Vienna, and in the Carinthian Mountains and Burgenland.


The Austrian Empire played a decisive role in Central European history. It occupied a strategic position astride the southeastern approaches to Western Europe and the north-south routes between Germany and Italy. Although present-day Austria is only a tiny remnant of the old empire, it still occupies this strategic position. Soon after the Republic of Austria was established at the end of World War I, it not only had to redesign a government meant to rule a great empire into one that would govern only 6 million citizens but also faced catastrophic inflation. In the early 1930s, worldwide depression and unemployment added to these strains and shattered traditional Austrian society. These economic and political conditions led in 1933 to a dictatorship under Engelbert Dollfuss. In February 1934, civil war broke out, and the Social Democratic Party was suppressed. In July, the National Socialists attempted unsuccessfully to seize power and assassinated Dollfuss. In March 1938, Austria was incorporated into the German Reich through the Anschluss. At the Moscow conference in 1943, the Allies declared their intention to liberate Austria and reconstitute it as a free and independent state. In April 1945, both East and West forces liberated the country. Subsequently, Austria was divided into zones of occupation similar to Germany's. A Socialist elder statesman, Dr. Karl Renner, successfully organized an Austrian administration. General elections were held in November 1945, and the conservative People's Party obtained 50% of the vote and 85 seats in the National Council (lower house of the parliament). The Socialists won 45% and 76 seats, and the Communists won 5% and 4 seats. The ensuing three-party government held office until 1947, when the Communists left the government. During that year, the People's Party and the Socialists formed a coalition that governed until 1966. Under the 1945 Potsdam agreements, the Soviets took control of German assets in their zone of occupation. These included manufacturing plants, constituting 7% of all Austrian industry; oil resources, which accounted for 95% of the nation's oil production; and refineries, which accounted for about 80% of Austria's refinery capacity. These properties were returned to Austria under the Austrian State Treaty, signed at Vienna on May 15, 1955. The treaty came into effect on July 27 of that year. Under its provisions, all occupation forces were withdrawn by October 25, 1955. Austria became free and independent for the first time since 1938.


The Austrian president convenes and discontinues parliamentary sessions and, subject to certain conditions, can dissolve parliament. However, no Austrian president has dissolved parliament in the Second Republic. The custom is for parliament, itself, to enact a law calling new elections. The president requests a party leader, usually the leader of the strongest party, to form a government. Upon the recommendation of the federal chancellor, the president also appoints cabinet ministers. No one can become a member of the government without the approval of the president. The Federal Assembly (parliament) is composed of two houses--the National Council (Nationalrat), or lower house, and the Federal Council (Bundesrat), or upper house. Virtually all legislative authority is concentrated in the National Council. Its 183 members are elected for a maximum 4-year term from nine electoral districts, according to a complicated system of proportional representation. The National Council may dissolve itself by a simple majority vote or it may be dissolved by the president on the recommendation of the chancellor. The Federal Council consists of 63 members elected by the legislatures of the nine provinces for 4- to 6-year terms. Seats are allocated on the basis of population, with each province guaranteed at least three. The Federal Council is restricted to reviewing legislation passed by the National Council, and has only delaying, not absolute veto, powers. The highest courts of Austria's independent judiciary are the Constitutional Court, which has jurisdiction over constitutional matters; the Administrative Court, which handles bureaucratic disputes; and the Supreme Court, for civil and criminal cases. Cases in the Administrative and Supreme Courts concerning constitutional issues can be appealed to the Constitutional Court. Justices of the three courts are appointed by the president for specific terms. Austria's nine Laender (provinces) are headed by governors elected by the provincial legislatures. Although most authority, including police, rests with the federal government, the provinces have considerable responsibility for welfare matters and supervision of local administration. Strong provincial and local loyalties are based on tradition and history.
Principal Government Officials:
Federal President--Thomas Klestil Federal Chancellor--Franz Vranitzky Vice Chancellor--Gerhard Busek Foreign Minister--Aolis Moch Ambassador to the United States--Friedrich Hoess Ambassador to the United Nations--Peter Hohenfellner Austria maintains an embassy in the United States at 3524 International Court, NW, Washington, DC 20008 (tel. 202-895- 6700). Consulates general are located in New York, Chicago, and Los Angeles, with honorary consulates in Atlanta, Boston, Buffalo, Cleveland, Denver, Detroit, Honolulu, Houston, Miami, New Orleans, Newark, Philadelphia, San Francisco, San Juan, Seattle, and St. Paul.


Since World War II, Austria has enjoyed political stability. The two major parties--People's Party and Social Democrats--which formed the governing coalition during the period 1947-66, have the support of about 75% of the electorate. Extremist parties of the right and left have had virtually no influence on government policy and usually receive less than 1% of the vote. The Socialist Party, renamed the Social Democratic Party in June 1991, traditionally draws its constituency from blue- and white- collar workers, so that much of its strength lies in the urban and industrialized areas. In the past, the party advocated heavy state involvement in Austria's key industries, the extension of social security benefits, and a full-employment policy. In the mid-1980s, the party began to swing toward free market-oriented economic policies and balancing the federal budget, and is now working to bring the country into the European Community (EC). The People's Party's traditional constituency has been among liberal farmers, big and small businesses, and lay Catholic groups. Its centers of strength are the rural regions of Austria. In economic matters, the party advocates conservative financial policies and privatization of much of Austria's nationalized industry. The Freedom Party has been a small- to medium-sized right leaning party that attracts those who desire no association with the two major parties. Recently, the party's mixture of populism and anti- establishment themes have won increased support. In provincial elections in Vienna in 1991 the Freedom Party displaced the People's Party to move into second position in city government. Nationally it attracts approximately 15% of the vote. The most recent Austrian parliamentary elections were held in October 1990 and produced a Socialist/People's Party coalition government. In these elections, the Social Democratic Party under its popular chairman, Chancellor Franz Vranitzky, maintained its 43% plurality from 1986. The People's Party, however, dropped from 41% to 32% of the vote. The Freedom Party, under Joerg Haider, substantially increased its share of the electorate from 10% to 17%. Because of the new voting patterns, the new government included a larger number of Socialist cabinet members.


Austria has a social market economy in which the government plays an important role. Many of the country's largest firms were nationalized in the early post-war period to protect them from Soviet takeover as war reparations. Currently, these state-owned corporations are intended to operate largely as private businesses, and a number are being wholly or partially privatized. The government operates various state monopolies, utilities, and services. Austrian industry, banking, transportation, services, and commercial facilities are well developed. Although the nationalized industries, which include several iron and steel works and chemical plants, are large industrial enterprises employing thousands of people, most industrial and commercial enterprises are smaller. Austrian farms, like those of other West European mountainous countries, are small and fragmented. Their products are relatively expensive. Although Austrian farmers provide about 80% of domestic food requirements, the agricultural contribution to gross domestic product (GDP) has declined since 1950 to about 3.5%. Austria has achieved sustained economic growth in the post-war period. During the 1950s, the average annual growth rate was more than 5% in real terms and averaged about 4.5% through most of the 1960s. Austria's economy through 1979 grew by 4.7% but began to taper off in 1980. The growth rate during the past decade was still one of the highest in the West. GDP increased by 3% in real terms in 1985. After a short fall to 1.2% in 1986, Austria's percentage growth climbed to a healthy 4.6% in 1990 but fell to 3% in 1991. Future GDP growth is expected to be about 3% through 1996, and then to remain slightly above the 2.2% growth expected for Europe. The Central Bank's hard schilling policy has helped to keep "imported" inflation to a minimum--3.2% in 1985, and 1.4% in 1987. In recent years, inflation has remained relatively stable. Prices rose 3.3% in both 1990 and 1991. Inflation is anticipated at 3%-4% for the next several years. The reduction in the trade deficit, the traditional surplus in services, and high revenues from transit trade have resulted in a $1 billion schilling current account surplus for 1990. Unemployment in Austria remained at 4.5% in 1983-84 but increased slightly to 4.8% in 1985. Unemployment reached 5.2% and remained above the 5% level through the end of the decade. Levels have increased to 5.4% in 1990 and 5.8% in 1991 and are expected to rise slightly over the next few years. Austria has a strong labor movement. The Austrian Trade Union Federation (ATUF) comprises constituent unions with a total membership of more than 1.6 million, representing almost two- thirds of the country's wage and salary earners. Since 1945, the ATUF has followed moderate policies and generally has cooperated with industry and government anti-inflationary measures in what is known as Austria's "social partnership." Exports of goods and services account for more than 40% of GDP. Austria's main trading partners are members of the European Community (EC), which accounted for 66% of Austrian merchandise exports and 68% of its imports in 1991. Since July 1, 1977, the exchange of nearly all industrial goods between Austria and the EC has been free from tariff barriers. In order to share in the benefits of the EC's internal market, Austria applied to join in July 1989. Membership in the European Free Trade Association (EFTA), once an important element in Austrian foreign trade, has lost much of its glamor since Austria and its EFTA partners concluded bilateral free trade agreements with the EC. In 1991, EFTA countries accounted for 7% of Austrian imports and 5% of exports. Total trade with the United States in 1991 reached $3.2 billion. Imports from the United States amounted to $2 billion, constituting a US market share in Austria of 3.5%. Austrian exports to the United States in 1991 were $1.2 billion or 3% of total Austrian exports. As a rule, Austria has experienced deficits in its merchandise trade, offset somewhat by earnings from tourism and by long-term private capital.


The 1955 Austrian State Treaty ended the four-power occupation and recognized Austria as an independent and sovereign state. In October 1955, the Federal Assembly passed a constitutional law in which "Austria declares of her own free will her perpetual neutrality." The second section of this law stated that "in all future times Austria will not join any military alliances and will not permit the establishment of any foreign military bases on her territory." In line with its desire to join the European Community, and with the demise of the Warsaw Pact, Austria has begun reassessing its definition of its neutrality. Austria shapes its foreign policy on the basis of neutrality. Austrian leaders also emphasize the unique role the country plays as a link between East and West and as a moderator between the industrialized and developing countries. Austria is active in the United Nations and in UN peacekeeping efforts. It attaches great importance to participation in the Organization for Economic Cooperation and Development and other international economic organizations, and has played an active role in the Conference on Security and Cooperation in Europe (CSCE). Vienna is headquarters of the International Atomic Energy Agency and the UN Industrial Development Organization. Other international organizations based in Vienna include the Organization of Petroleum Exporting Countries and its Fund for International Development, and the International Institute for Applied Systems Analysis. Vienna hosted the mutual and balanced force reduction talks, which resulted in the November 1990 signing of the Treaty on Conventional Armed Forces in Europe. In 1986, Vienna hosted the follow-up meeting of the CSCE. Austria traditionally has been active in what the Austrians call "bridge building to the East," involving increasing contacts at all levels with Eastern Europe and the states of the former Soviet Union. Austrians maintain a constant exchange of business representatives, political leaders, students, cultural groups, and tourists, with the countries of Central and Eastern Europe. As a result, Austrian companies are very active in investing and trading with the countries of Central and Eastern Europe. In addition, the Austrian Government and various Austrian organizations provide assistance and training to support the changes underway in the region. They believe also that their country, as gateway to the Danube River basin, is uniquely qualified for this role.


Austria's political leaders and people recognize and appreciate the essential role played by US economic assistance through the Marshall Plan in the rehabilitation of their country after World War II, and by the United States in promoting the conclusion of the Austrian State Treaty. It is in the interest of the United States that: -- The present friendly relations be maintained and strengthened; -- Austria remain free and independent; and -- Its political and economic stability be maintained.
Principal US Officials:
Ambassador--Roy Michael Huffington Deputy Chief of Mission--James W. Swihart Counselor for Political Affairs--Alfreda E. Meyers Counselor for Economic Affairs--Edward B. O'Donnell Counselor Public Affairs (USIS)--Craig B. Springer Counselor for Commercial Affairs--Benjamin N. Brown Counselor for Administrative Affairs--Warren P. Nixon Counselor for Agricultural Affairs--Robert J. Svec Consul General--Mary McAteer-LeLaumier Defense and Army Attache--Col. Peter S. Hoffman, USA Consul General, Salzburg--Maryanne H. Martinez The US embassy in Austria is located at Boltzmanngasse 16, Vienna 1091 tel. (43) (1) 313-39 [After office hours: (43) (1) 319-5523]. The US Consulate General in Salzburg is located at 51 Giselakai, 5020 Salzburg tel. (43) (662) 28-6-01.


Climate and clothing:
Vienna's climate is similar to that of the northeastern US; clothing needs and tastes are about the same. Wear sweaters and light woolens during possible cool spells in summer.
Local pharmacies are well stocked, and hospitals are adequate. The US embassy can provide a list of English-speaking physicians and dentists in Vienna. Community health and sanitation are similar to that in the United States; the Viennese are proud of their city's water, piped in from mountain springs.
Telegraph and telephone services are efficient. Vienna is 6 hours ahead of eastern standard time.
Public transportation in Vienna and other cities via bus, streetcar, and subway is good. Taxis are available 24 hours a day at stands throughout Vienna. Roads are good, though occasionally steep on alpine passes. Highways connect Vienna with Graz, Salzburg, Innsbruck, and the German border. The Austrian State Railway provides service throughout the country and connections to Eastern and Western Europe.
Tourist attractions:
Austria has a number of widely differing tourist areas: Vienna and Salzburg; the lake and mountain district of the Salzkammergut; the Danube Valley, known for its vineyards, castles, and monasteries; Burgenland, the easternmost province, centering on the Lake Neusiedler Lake; Carinthia and the Alpine Provinces, for hunting, fishing, and skiing.
Further Information
Available from the Superintendent of Documents, US Government Printing Office, Washington, DC 20402: Key Officers of Foreign Service Posts (Guide for Business Representatives). Revised biannually. For information on economic trends, commercial development, production, trade regulations, and tariff rates, contact the Austrian desk, IEP/EUR/OWE, Room 3411, International Trade Administration, US Department of Commerce, Washington, DC 20230, (tel. 202-377- 2435.)


Published by the United States Department of State -- Bureau of Public Affairs Office of Public Communication Washington, DC -- October 1992 Department of State Publication 7955 Background Notes Series -- This material is in the public domain and may be reprinted without permission; citation of this source is appreciated. For sale by the Superintendent of Documents, US Government Printing Office, Washington, DC 20402. (###)