ABSTRACT
Modern Austria is a small nation of 7,400,000 people compared with the empire of 52,000,000 from which it was dismembered in 1919. In the intervening sixty years the development of the state has been chequered. In 1934 civil war brought an end to parliamentary democracy and in 1938 the state was absorbed into the German Third Reich, to re-emerge in 1945 divided between the four victorious Allied powers which supervised its provisional government and cut Vienna into four occupation zones. An independent and politically neutral Austria was created in 1955, with permanent neutrality being written into the constitution and the U.S.S.R. being a guarantor of independence. Since 1955 the Federal Republic of Austria has developed substantially and is among the strongest economies in Western Europe. Parallels may be drawn here with the economic success of West Germany and the strength enjoyed by another neutral federal republic, Switzerland. Perhaps the greatest stability has occurred in the past decade, during the continuous period of social democracy under the leadership of Kreisky. The problems that have been faced in terms of economics and regional development in the post-war period must be viewed in the light of the state’s re-emergence as an independent nation from the turbulence of the first half of the twentieth century. Austria has had to come to terms with the loss of an empire (which produced a lopsided industrial structure), a landlocked position, and a condition of neutrality in a changing world.
