ABSTRACT
In 1986, the most pressing economic problem was the reform of the state owned industries, as the big losses of that industry could no longer be politically sustained. When Franz Vranitzky became chancellor, the economic policy of the later years of Bruno Kreisky was partly continued and partly abandoned. The freedom of macro-economic policy making in Austria had already been limited by the decision about the Schilling in 1979, namely to peg it to the German Mark. Social Policy has always been an important issue for the Austrian Social Democratic Party. Political resistance by certain groups, which had been hurt by certain reforms, usually found sympathetic support in the wider public. Austro-Keynesianism, the policy concept of Chancellor Bruno Kreisky, mainly consisted of demand management, supported by investment and export promotion. Economic policies between 1986 and 1997 basically dealt with allocation issues.
