U.S. Department of State, July 2000
Bureau of European Affairs

Background Notes: Austria

Official Name:
Republic of Austria

PROFILE

Geography

Area: 83,857 sq. km. (32,377 sq. mi.); slightly smaller than
Maine.
Cities: Capital--Vienna (1998 pop. 1.6 million). Other
cities--Graz, Linz, Salzburg, Innsbruck, Klagenfurt.
Terrain: Alpine (64%), northern highlands that form part of
the Bohemian Massif (10%), lowlands to the east (26%).
Climate: Continental temperate.

People

Nationality: Noun and adjective--Austrian(s).
Population (1998): 8,078,449.
Annual growth rate (1998): 0.07%.
Ethnic groups: Germans 98%, Croats, Slovenes; other
recognized minorities include Hungarians, Czechs, Slovaks,
and Roma.
Religions: Roman Catholic 78%, Protestant 5%, Muslim and other 17%.
Language: German 92%.
Education: Years compulsory--9. Attendance--99%. Literacy--98%.
Health (1998): Infant mortality rate--4.9 deaths/1,000. Life
expectancy--men 74.7 years , women 80.9 years.
Work force (1999, 3.7 million): Services--67.2%; agriculture
and forestry--0.8%.

Government

Type: Parliamentary democracy.
Constitution: 1920; revised 1929 (reinstated May 1, 1945).
Branches: 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: Social Democratic Party, People's Party,
Freedom Party, Greens, Liberal Forum.
Suffrage: Universal over 19.
Administrative subdivisions: Nine Laender (federal
provinces). Defense (2000): 0.8% of GDP.
Flag: Three horizontal bands--red, white, and red; flag also
may have the national emblem (a black eagle centered in the
white band).

Economy

GDP (1999): $207.9 billion.
Real GDP growth rate (1999): 2.2%.
Per capita income (1999): $25,655.
Natural resources: Iron ore, crude oil, natural gas, timber,
tungsten, magnesite, lignite, cement.
Agriculture (2.4% of 1999 GDP): Products--livestock, forest
products, grains, sugarbeets, potatoes.
Industry (30.0% of 1999 GDP): Types--iron and steel,
chemicals, capital equipment, consumer goods.
Services: 67.6% of 1999 GDP.
Trade (1999): Exports--$63.5 billion: iron and steel
products, timber, paper, textiles, electrotechnical
machinery, chemical products. Imports--$68.8 billion:
machinery, vehicles, chemicals, iron and steel, metal goods,
fuels, raw materials, foodstuffs. Principal trade
partners--European Union, U.S., Hungary, and Switzerland.

PEOPLE

Austrians are a homogeneous people; 92% are native German
speakers. Only two numerically significant minority groups
exist--30,000 Slovenes in Carinthia (south central Austria)
and about 60,000 Croats in Burgenland (on the Hungarian
border). The Slovenes form a closely knit community. Their
rights as well as those of the Croats are protected by law
and generally respected in practice. The present boundaries
of Austria, once the center of the Habsburg Empire that
constituted the second-largest state in Europe, were
established in accordance with the Treaty of St. Germain in
1919. Some Austrians, particularly near Vienna, still have
relatives in the Czech Republic, Slovakia, and Hungary.
About 78% 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
anticlerical stance. Small Lutheran minorities are located
mainly in Vienna, Carinthia, and Burgenland.

HISTORY

The Austro-Hungarian Empire played a decisive role in
central European history. It occupied strategic territory
containing the southeastern routes 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 retains this unique position.

Soon after the Republic of Austria was created at the end of
World War I, it faced the strains of catastrophic inflation
and of redesigning a government meant to rule a great empire
into one that would govern only 6 million citizens. In the
early 1930s, worldwide depression and unemployment added to
these strains and shattered traditional Austrian society.
Resultant economic and political conditions led in 1933 to a
dictatorship under Engelbert Dollfuss. In February 1934,
civil war broke out, and the Socialist Party was outlawed.
In July, a coup d'etat by the National Socialists failed,
but Dollfuss was assassinated by Nazis. In March 1938,
Austria was incorporated into the German Reich, a
development commonly known as the "Anschluss" (annexation).

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 Eastern- and
Western-front Allied forces liberated the country.
Subsequently, Austria was divided into zones of occupation
similar to those in Germany. Under the 1945 Potsdam
agreements, the Soviets took control of German assets in
their zone of occupation. These included 7% of Austria's
manufacturing plants, 95% of its oil resources, and about
80% of its refinery capacity. The properties were returned
to Austria under the Austrian State Treaty. This treaty,
signed in Vienna on May 15, 1955, came into effect on July
27, and, under its provisions, all occupation forces were
withdrawn by October 25, 1955. Austria became free and
independent for the first time since 1938.

GOVERNMENT

The Austrian president convenes and concludes parliamentary
sessions and under certain conditions can dissolve
Parliament. However, no Austrian president has dissolved
Parliament in the Second Republic. The custom is for
Parliament to call for new elections if needed. 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. Legislative
authority is concentrated in the National Council. Its 183
members are elected for a maximum 4-year term in a
three-tiered system, based on 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 64 members of the
Federal Council are elected by the legislatures of the nine
provinces for 4- to 6-year terms. The Federal Council only
reviews legislation passed by the National Council and can
delay but not veto its enactment.

The highest courts of Austria's independent judiciary are
the Constitutional Court; 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.

The governors of Austria's nine Laender (provinces) are
elected by the provincial legislatures. Although most
authority, including that of the police, rests with the
federal government, the provinces have considerable
responsibility for welfare matters and local administration.
Strong provincial and local loyalties are based on tradition
and history.

Principal Government Officials

Federal President--Thomas Klestil
Federal Chancellor--Wolfgang Schuessel
Vice Chancelor--Susanne Riess-Passer
Foreign Minister--Benita Ferrero-Waldner
Ambassador to the United States--Peter Moser
Ambassador to the United Nations--Gerhard Pflanzelter

Austria maintains an embassy in the United States at 3524
International Court, NW, Washington, DC 20008 (te1.
202-895-6700). Consulates general are located in New York,
Chicago, and Los Angeles, with honorary consulates in
Atlanta, Boston, Buffalo, Cleveland, Denver, Honolulu,
Houston, Miami, New Orleans, Newark, Philadelphia, St. Paul,
San Francisco, San Juan, and Seattle.

POLITICAL CONDITIONS

Since World War II, Austria has enjoyed political stability.
A Socialist elder statesman, Dr. Karl Renner, organized an
Austrian administration in the aftermath of the war, and
general elections were held in November 1945. In that
election, the conservative People's Party (OVP) obtained 50%
of the vote (85 seats) in the National Council (lower house
of Parliament), the Socialists won 45% (76 seats), and the
communists won 5% (4 seats). The ensuing three-party
government ruled until 1947, when the communists left the
government and the OVP led a governing coalition with the
socialists (now called the Social Democratic Party or SPO)
that governed until 1966. Between 1970 and 1999, the SPO has
ruled the country either alone or in conjunction with the
OVP, except from 1983-86, when it governed in coalition with
the Freedom Party. In 1999, the OVP formed a coalition with
the right wing-populist Freedom Party (FPO). The SPO, which
was the strongest party in the 1999 elections, and the
Greens now form the opposition. As a result of the inclusion
of the FPO on the government, the EU imposed a series of
sanctions on Austria. The U.S. and Israel, as well as
various other countries, also reduced contacts with the
Austrian Government.

The Social Democratic Party traditionally draws its
constituency from blue- and white-collar workers.
Accordingly, much of its strength lies in urban and
industrialized areas. In the 1995 national elections, it
garnered 38% of the vote. The SPO in the past advocated
heavy state involvement in Austria's key industries, the
extension of social security benefits, and a full-employment
policy. Beginning in the mid-1980s, it shifted its focus to
free market-oriented economic policies, balancing the
federal budget, and European Union (EU) membership.

The People's Party advocates conservative financial policies
and privatization of much of Austria's nationalized industry
and finds support from farmers, large and small business
owners, and lay Catholic groups, mostly in the rural regions
of Austria. In 1995, it received 28% of the vote. The
rightist Freedom Party attracts protest votes and those who
desire no association with the other major parties. The
party's mixture of populism and anti-establishment themes
propagated by its aggressive leader Joerg Haider steadily
gained support over the past years. It attracted about 27%
of the vote in the 1999 elections. The Liberal Forum,
founded on libertarian ideals, split from the Freedom
Movement in February 1993. It received 5.5% of the vote in
the 1999 election and, thus, failed to re-enter the national
legislature. The Greens, a left-of-center party focusing on
environmental issues, received 4.4% of the vote in 1999.

ECONOMY

Austria has a well-developed social market economy with a
high standard of living in which the government has played
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. For many years, the
government and its state-owned industries conglomerate
played a very important role in the Austrian economy.
However, starting in the early 1990s, the group was broken
apart, state-owned firms started to operate largely as
private businesses, and a great number of these firms were
wholly or partially privatized. Although the government's
privatization work in past years has been very successful,
it still operates some firms, state monopolies, utilities,
and services. The new government has presented an ambitious
privatization program, which, if implemented, will
considerably reduce government participation in the economy.
Austria enjoys well-developed industry, banking,
transportation, services, and commercial facilities.

Although some industries, such as several iron and steel
works and chemical plants, are large industrial enterprises
employing thousands of people, most industrial and
commercial enterprises in Austria are relatively small on an
international scale.

Austria has a strong labor movement. The Austrian Trade
Union Federation (OGB) comprises constituent unions with a
total membership of about 1.5 million--more than half the
country's wage and salary earners. Since 1945, the OGB has
pursued a moderate, consensus-oriented wage policy,
cooperating with industry, agriculture, and the government
on a broad range of social and economic issues in what is
known as Austria's "social partnership." The OGB has
announced tough opposition against the new government's
program for budget consolidation, social reform, and
improving the business climate, and indications are rising
that Austria's peaceful social climate could become more
confrontational.

Austrian farms, like those of other west European
mountainous countries, are small and fragmented, and
production is relatively expensive. Since Austria's becoming
a member of the EU in 1995, the Austrian agricultural sector
has been undergoing substantial reform under the EU's common
agricultural policy (CAP). Although Austrian farmers provide
about 80% of domestic food requirements, the agricultural
contribution to gross domestic product (GDP) has declined
since 1950 to less than 3%.

Austria has achieved sustained economic growth. 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. Following moderate real GDP growth of 1.7%, 2.0% and
1.2%, respectively, in 1995, 1996, and 1997, the economy
rebounded and with real GDP expansion of 2.9% in 1998 and
2.2% in 1999.

Austria became a member of the EU on January 1, 1995.
Membership brought economic benefits and challenges and has
drawn an influx of foreign investors attracted by Austria's
access to the single European market. Austria also has made
progress in generally increasing its international
competitiveness. As a member of the Economic and Monetary
Union (EMU), Austria's economy is closely integrated with
other EU member countries, especially with Germany. On
January 1, 1999, Austria introduced the new Euro currency
for accounting purposes. Starting January 2002, Euro notes
and coins will be introduced and substitute for the Austrian
schilling. Economists agree that the economic effects in
Austria of using a common currency have been positive.

Trade with other EU countries accounts for almost 66% of
Austrian imports and exports. Expanding trade and investment
in the emerging markets of central and eastern Europe is a
major element of Austrian economic activity. Trade with
these countries accounts for almost 14% of Austrian imports
and exports, and Austrian firms have sizable investments in
and continue to move labor-intensive, low-tech production to
these countries. Although the big investment boom has waned,
Austria still has the potential to attract EU firms seeking
convenient access to these developing markets.

Total trade with the United States in 1999 reached $6.6
billion. Imports from the United States amounted to $3.7
billion, constituting a U.S. market share in Austria of
5.4%. Austrian exports to the United States in 1999 were
$2.9 billion or 4.6% of total Austrian exports.

FOREIGN RELATIONS

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." Since then, Austria shaped its foreign policy on
the basis of neutrality.

In recent years, however, Austria began to reassess its
definition of neutrality, granting overflight rights for the
UN-sanctioned action against Iraq in 1991, and, since 1995,
contemplating participation in the EU's evolving security
structure. Also in 1995, it joined the Partnership for
Peace, and subsequently participated in peacekeeping
missions in Bosnia. Discussion of possible Austrian NATO
membership intensified during 1996. OVP and FPO aim at
moving closer to NATO or a European defense arrangement. The
SPO, in turn, believes continued neutrality is the
cornerstone of Austria's foreign policy, and a majority of
the population generally supports this stance.

Austrian leaders emphasize the unique role the country plays
as East-West hub and as a moderator between industrialized
and developing countries. Austria is active in the United
Nations and experienced in UN peacekeeping efforts. It
attaches great importance to participation in the
Organization for Economic Cooperation and Development and
other international economic organizations, and it has
played an active role in the Organization for Security and
Cooperation in Europe (OSCE).

Vienna hosts the Secretariat of the OSCE and the
headquarters of the International Atomic Energy Agency, the
UN Industrial Development Organization, and the UN Drug
Control Program. Other international organizations based in
Vienna include the Organization of Petroleum Exporting
Countries and the International Institute for Applied
Systems Analysis. Recently, Vienna added the Comprehensive
Test Ban Treaty Organization and the Wassenaar Arrangement
(a technology-transfer control agency) to the list of
international organizations it hosts.

Austria traditionally has been active in "bridge-building to
the east," 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. Austrian
companies are 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.

U.S.-AUSTRIAN RELATIONS

Austria's political leaders and people recognize and
appreciate the essential role played by U.S. economic
assistance through the Marshall Plan in the reconstruction
of their country after World War II, and by the U.S. in
promoting the conclusion of the Austrian State Treaty. It is
in the interest of the U.S. that the present friendly
relations be maintained and strengthened and that Austria's
political and economic stability be maintained.

Principal U.S. Officials

Ambassador--Kathryn Walt Hall
Deputy Chief of Mission--Robert S. Deutsch
Counselor for Economic and Political Affairs--Lee Brudvig
Counselor for Public Affairs (USIS)--L.W. Koengeter
Counselor for Commercial Affairs--Stephen Craven
Counselor for Administrative Affairs--Steven White
Counselor for Agricultural Affairs--Allan Mustard
Consul General--James Pettit
Defense and Army Attache--Col. Bruce Boevers
Consular Agent in Salzburg--Jeanie Mayer

The U.S. embassy in Austria is located at Boltzmanngasse 16,
Vienna 1091, tel. (43) (1) 313-39 (After office hours: (43)
(1) 319-5523). The U.S. Consular Agency in Salzburg is
located at Alte Markt 1, 5020 Salzburg, tel. (43) (662)
848-776.

TRAVEL AND BUSINESS INFORMATION

The U.S. Department of State's Consular Information Program
provides Consular Information Sheets, Travel Warnings, and
Public Announcements. Consular Information Sheets exist for
all countries and include information on entry requirements,
currency regulations, health conditions, areas of
instability, crime and security, political disturbances, and
the addresses of the U.S. posts in the country. Travel
Warnings are issued when the State Department recommends
that Americans avoid travel to a certain country. Public
Announcements are issued as a means to disseminate
information quickly about terrorist threats and other
relatively short-term conditions overseas which pose
significant risks to the security of American travelers.
Free copies of this information are available by calling the
Bureau of Consular Affairs at 202-647-5225 or via the
fax-on-demand system: 202-647-3000. Consular Information
Sheets and Travel Warnings also are available on the
Consular Affairs Internet home page:
http://travel.state.gov. Consular Affairs Tips for Travelers
publication series, which contain information on obtaining
passports and planning a safe trip abroad are on the
internet and hard copies can be purchased from the
Superintendent of Documents, U.S. Government Printing
Office, telephone: 202-512-1800; fax 202-512-2250.

Emergency information concerning Americans traveling abroad
may be obtained from the Office of Overseas Citizens
Services at (202) 647-5225. For after-hours emergencies,
Sundays and holidays, call 202-647-4000.

Passport information can be obtained by calling the National
Passport Information Center's automated system ($.35 per
minute) or live operators 8 a.m. to 8 p.m. (EST)
Monday-Friday ($1.05 per minute). The number is
1-900-225-5674 (TDD: 1-900-225-7778). Major credit card
users (for a flat rate of $4.95) may call 1-888-362-8668
(TDD: 1-888-498-3648). It also is available on the internet.
Travelers can check the latest health information with the
U.S. Centers for Disease Control and Prevention in Atlanta,
Georgia. A hotline at 877-FYI-TRIP (877-394-8747) and a web
site at http://www.cdc.gov/travel/index.htm give the most
recent health advisories, immunization recommendations or
requirements, and advice on food and drinking water safety
for regions and countries. A booklet entitled Health
Information for International Travel (HHS publication number
CDC-95-8280) is available from the U.S. Government Printing
Office, Washington, DC 20402, tel. (202) 512-1800.

Information on travel conditions, visa requirements,
currency and customs regulations, legal holidays, and other
items of interest to travelers also may be obtained before
your departure from a country's embassy and/or consulates in
the U.S. (for this country, see "Principal Government
Officials" listing in this publication).

U.S. citizens who are long-term visitors or traveling in
dangerous areas are encouraged to register at the U.S.
embassy upon arrival in a country (see "Principal U.S.
Embassy Officials" listing in this publication). This may
help family members contact you in case of an emergency.

Further Electronic Information

Department of State Foreign Affairs Network. Available on
the Internet, DOSFAN provides timely, global access to
official U.S. foreign policy information. Updated daily,
DOSFAN includes Background Notes; daily press briefings;
Country Commercial Guides; directories of key officers of
Foreign Service posts; etc. DOSFAN's World Wide Web site is
at http://www.state.gov.

National Trade Data Bank (NTDB). Operated by the U.S.
Department of Commerce, the NTDB contains a wealth of
trade-related information. It is available on the Internet
(www.stat-usa.gov) and on CD-ROM. Call the NTDB Help-Line at
(202) 482-1986 for more information.

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