A Brief History of Austria

Austria first emerged as an important force in central Europe during the 15th century with the formation of the Hapsburg Empire, maintaining this role until the collapse of the Austro-Hungarian Empire following the First World War. In 1918, the Republic of Austria was formed only to be annexed within a mere two decades by the German Third Reich (Economist). In the post World War Two era the Allies occupied Austria until 1955, during which a State Treaty simultaneously recognized Austria’s independence and forbade unification with Germany. A constitutional law declaring Austria’s “perpetual neutrality” went into effect that year as a condition for the withdrawal of Soviet troops. Making large economic strides, Austria grew rapidly into one of the world’s most advanced nations, joining the European Union in 1995 and the Economic and Monetary Union in 1999 (CIA World Factbook). It continues to be a constitutional democracy, based on its original Constitution of 1920, later revised in 1929 (Austrian Embassy).


As a federal republic, Austria is divided into nine states under a central government. Split into a bicameral legislature, the National Council, or Nationalrat, holds 183 seats elected by direct popular vote and the Federal Council, or Bundesrat, holds 62 seats elected by provincial parliaments. The National Council is primarily responsible for national interests, while the Federal Council is representative of state interests (Austrian Embassy). Each state is headed by a state governor, but the federal government has the power to dissolve state assemblies with the consent of the Bundesrat. Members of the Nationalrat are elected for four year terms, and a national election is rapidly approaching in Fall of 2006. The executive branch consists of the Chief of State, President Heinz Fischer, and the Head of Government, Chancellor Wolfgang Schuessel. Directly elected by the people every six years, the president has no executive powers in times of peace, but is responsible for the appointment of the chancellor. Traditionally chosen from the plurality party in the Nationalrat, the chancellor heads a Council of Ministers (Economist).

Austrian government operates under a multi-party system, and the current Chancellor is head of a coalition between the people’s party, the OVP, and the Alliance for Austria’s Future, the BZO, formerly the freedom party (Frey). Other major parties include the Social Democrats and the Green party on the national level, although both the Liberal Forum and the Communist party have representation in local parliaments (Austrian Embassy). Schuessel remains one of the most influential moderately conservative leaders in Europe, although his coalition with the original Freedom party has been a subject of much controversy (Frey). The Freedom party, headed by Jorg Haider, began as a highly nationalist party, and gained overwhelming national support for its xenophobic attitudes. However, Austria endured embarrassing relations with fellow EU nations in 2000, when EU members froze bilateral contacts in protest to the inclusion of the Freedom party. In April of 2005, Haider engineered an internal split within the party, and began the BZO, completely abandoning his earlier ideals. Although his ministers and the majority of his deputies followed him into the BZO, this has barely maintained Schuessel’s power, as most of the grassroots activism remains with the original party (Fizzles). The moderate government has been slipping in favor to the Social Democrats since this party split, and both the BZO and the OVP have lost representation in recent regional elections. There are rumors of a possible attempt by Schuessel to scheme a grand coalition between the OVP and the Social Deomcrats, or even more radically, the Green Party, in desperate attempts to remain in power. Yet, Schuessel is relying heavily on his distinctive personality and notoriously excellent campaigning skills for the upcoming election (Frey).

As one of the globe’s most highly developed countries, Austria’s per capita income is ranked twelfth worldwide. It has strong ties to fellow EU nations and the United States economically, and it has served generally as a link between Central and Eastern Europe (Krautgartner). Although traditionally, Austria has maintained a free market economy with an emphasis on social factors, the current government under Schuessel has persistently pursued a number of economic reforms. Overhauling the state pension system and pushing for the privatization of companies, much of these new economic policies tend to be in favor of business growth (Frey). Much of this corporate expansion and rapid growth can be attributed to Eastern Europe, and an export boom is driving company profits to new highs while new laws favor profit from foreign subsidiaries (Krautgartner). Yet, strict laws continue to exist, preventing most Eastern European themselves from joining the Austrian labor market. Like most other EU nations, Austria chose to retain control over labor laws until 2011, shutting its doors to the vast majority of migrant workers (Wagstyl). Although Austrian government insists that this is based primarily on the growth of previously low unemployment rates, other European nations have insinuated otherwise.

With a plethora of historical prejudice, Austrian culture includes an underlying xenophobia. As a free, democratic nation, the Austrian constitution guarantees universal suffrage, but the overwhelming popularity of the Freedom party suggests a widely accepted sense of racism (Frey). In October of 2005, Schuessel obstructed the start of EU membership discussion with Turkey, dropping his demands that Turkey be offered something short of full membership only in return for the beginning of accession talks with Croatia. Infuriating other EU members, many nations insinuated that these actions could be traced back to anti-Muslim sentiments in Austria, while Croatia was supported as an outpost for the Christian west. The controversy revolved primarily around the fact that Croatia was to have handed its war criminals to the Hague Tribunal before talks of its membership into the EU could begin. Some said that Austria was willing to compromise European principles in order to allow Croatia through a back door. Yet, Austria continues to maintain that Croatia is simply better prepared for EU membership (Jones).

In addition to fighting for an uphill reelection, the current Austrian government faces a challenge as it takes its turn on the rotating EU presidency for the first six months of 2006. This becomes further complicated by the fact that other than the UK, Austrian public support of the EU is the lowest of all its countries. Polls show that the public believes that the EU has brought with it more disadvantages than advantages in the past decade. Issues include a Constitution ratified by some nations, but rejected by voters in France and the Netherlands, the entry of Romania and Bulgaria, an ongoing battle over the budget, and the notorious accession talks for both Turkey and Croatia. Schueller will have a difficult time balancing both this international presidency and his domestic political agenda (Frey).