Until 1918 this was the core of the Austro-Hungarian Empire, also called the Dual Monarchy or the Habsburg Empire. The Empire dissolved into its constituent nations, leaving this German speaking part. It formed a Republic which was troubled by civil war for much of its existence until 1938.

Adolf Hitler was born in the Austrian town Linz and in 1938 annexed (in the German language - Anschluss) Austria to his Greater German state, the Third Reich, as the Ostmark. Many Austrians, though not a majority, supported his Nazi party. In 1945 the state was reconstituted, though divided into occupation zones, and forbidden to join Germany again. The peace treaty with the Soviet Union and the western powers in 1955 obliged Austria to be neutral and demilitarized on the model of Switzerland. Until 1990 it was the only country from which the Soviet army had withdrawn. The capital then became a favorite place for international conferences, an agency of the UN (Atomic Energy) and the secretariat of OPEC (Organisation of Petroleum Exporting States).

Austria applied to join the European Union after the Soviet Union became too weak to object. A referendum confirmed this and entry was effective from January 1995.

There were also talks with the other former members of the Empire, Hungary, Yugoslavia, Czechoslovakia and Italy, about regional cooperation in an Association of Danube States. However, EU membership has replaced this project. Dr. Otto Von Habsburg, the descendant of the last emperor (Member of the European Parliament for Bavaria) has visited Hungary. No commentator expects a re-establishment of the Empire, but the unexpected sometimes happens. Slovenia seemed likely to become closely associated with Austria and if peace is achieved, possibly Croatia also. (Slovenia has now joined the EU).

Austria was made an exception to the rule of national self-determination at the end of the first world war. The principles of President Woodrow Wilson should have added Austria to Germany, as many of the people wished. But it was thought undesirable for Germany to gain territory from the war. The same argument ruled at the end of the second world war when Austria was forbidden to join Germany. In both wars Austria was regarded as belonging to the losing and guilty side. By the present time the country seems to have acquired stability as one of three German-speaking states (the third is Switzerland) and there is no probability of rejoining Germany. However, others fear that the Austrian government will often act as a satellite of Germany, especially as Germany is now so much larger, since Reunification, so that in an enlarged European Union Germany would effectively have two votes and Austrian MEPs would tend to vote with the Germans.

There is a Slovene minority in Kärnten province (Carinthia).

German

Slovenian

Before the second world war there was a civil war between conservative and socialist parties, ended by the rise of the Nazi Party. During much of this period the government was effectively a dictatorship.

The post-war political system has been an attempt to prevent this war breaking out again. Thus governments have usually been coalitions of the two main parties - People's Party and Social Democratic Party.

Some observers say that this has produced a stagnant and corrupt political system not unlike that of the countries to the east, because for long periods there has been no effective opposition and little debate in Parliament. All government posts are shared out between the two main parties - a Nomenklatura. One result has been the growth of the Freedom party, formerly a centrist liberal party but now the home of neo-Nazis. It controls one of the state governments (Kärnten - Carinthia). It is possible that it represents not so much a genuine Nazi revival as a protest against the lack of debate.

In February 2000 a Coalition was formed of Volkspartei and Freiheitspartei. There was much disquiet expressed in other European capitals, and in Washington, for fear of the leader, Jorg Haider, turning out to be a closet Nazi. His party's policy is said to be anti-foreign immigration (though there are few foreigners) and hostile to the expansion of the European Union. This government collapsed and new elections were called for November 2002. Haider's Freiheitspartei lost much of its vote but remains in government in coalition with the conservative Volkspartei. Heider was killed in a road accident. His successors have been less charismatic (but still neo-Nazi).

Austria has a conventional west European type of economy with a large state sector but also a market. Thus state industries have to respond to the disciplines of competition with private industries.

Austria joined the European Union in 1995 and has adopted the euro.

Austrians voted in a referendum not to commission a nuclear power station which is to be dismantled. But the main threat is from the Russian-designed reactors at Bohunice in Slovakia which have no containment and are similar to the unsound design at Chernobyl.

European norm.