Zweite Republik#

Second Republic: The history of Austria during the Second Republic in the second half of the 20th  century is divided into:

1) the period in which sovereignty was limited by occupation 1945-1955; 2) the continuation of the Grand Coalition until 1966; 3) the government of the OeVP until 1970; 4) the government of the SPOe 1970-1983 ("Kreisky Era"); 5) the coalition governments 1983-1994; 6) membership of the European Union since 1995.

1) Occupation until 1955: During the last two weeks of the Second World War, the 3 political parties SPOe (Austrian Socialist Party), OeVP (Austrian People´s Party) and KPOe (Austrian Communist Party) convened in Vienna, which was occupied by the Soviets, and in Lower Austria and formed a Provisional Government ( Federal Governments) headed by K. Renner (11 representatives of the SPOe, 9 of the OeVP, 7 of the KPOe). The provisional government proclaimed the re-establishment of Austria as a democratic republic on April 27, 1945 and subsequently enacted basic laws (provisional establishment of the Republic in accordance with the constitution of 1920/1929 as amended prior to March 5, 1933; ban of the NSDAP; Transitional Provisions Act). However, it was only recognised by the Soviet Union, whose forces had occupied Vienna, Lower Austria, Burgenland and parts of Styria. By the end of the Second World War (May 7/9, 1945), Tyrol, Salzburg and Upper Austria had been occupied by US troops, Vorarlberg by French forces, Carinthia and parts of Styria by British and Yugoslav soldiers; the western Allies only permitted regional and local administrative authorities to be established. The First Control Agreement of July 4, 1945, put Austria under a military government by the allied armies and regulated the division of Austria into occupational zones. On September 11, the Allied Council ( Occupation of Austria 1945-1955) held its first meeting. After two provincial conferences on September 23/24 and October 9, the government was enlarged by representatives of the western provinces and general elections were fixed for November 25, 1945. In the wake of these developments, the western Allies finally recognised the Renner administration on October 20, 1945.

The election of November 25, 1945 was won by the OeVP with an absolute majority of 85 seats, the SPOe gained 76 and the KPOe only 4 seats. This election paved the way to Austria´s becoming a western-style democracy. At the same time, elections to the provincial diets (Landtage) were held; their results also provided the basis for the composition of the municipal councils. A concentration government (until 1947) under L. Figl (K. Renner became Federal President) had to ensure survival (famine during the 1946/1947 winter months), solve the National Socialist problem (laws against National Socialist collaborators passed in 1947; amnesties for partially or minimally incriminated persons, referred to in German as "Minderbelastete" from 1948 onwards, denazification) and ensure the return of prisoners of war; in addition, it had to organise help and assistance from outside (United Nations Relief and Rehabilitation Administration, UNRRA), deal with the enormous number of refugees and displaced persons and start reconstruction. As regards foreign policy, the new government intended to win back the area known as South Tyrol and to achieve the conclusion of a state treaty and the withdrawal of the occupying forces. In 1946, the Gruber-De Gasperi Agreement provided the basis for South Tyrol´s autonomy. The negotiations on the Austrian state treaty started in 1946/1947 but failed because Yugoslavia made territorial claims against Austria and the Soviet Union demanded compensation payments for the confiscated German Assets; finally the atmosphere of the Cold War (Austria´s neighbours Hungary and Czechoslovakia became people´s democracies in 1947/1948) made an agreement among the former Allied powers impossible.

The two parties OeVP ( Oesterreichische Volkspartei) and SPOe ( Sozialdemokratische Partei Oesterreichs) were basically equal partners, the KPOe ( Kommunistische Partei Oesterreichs) was not able to increase its number of voters despite its cooperation with the left-wing Socialists under E. Scharf in 1948; in 1949, the Verband der Unabhaengigen (VdU, League of Independents) formed a fourth party. In addition, the Interest Groups (Austrian Federation of Trade Unions, Chambers) became important social and economic factors. Due to their cooperation, 5 wage and price agreements were concluded between 1947 and 1951 in order to stabilise the economic situation. The 4th  wage-price agreement gave rise to extensive strikes in September 1950; the KPOe tried to use these strikes to gain more influence but their plans came to nothing.

The media landscape (newspapers and radio were in the hands of the occupying forces) was developed and reconstruction started, to a great extent supported by the Marshall Plan, which started in 1948 (and which was the reason for the KPOe to pull out of the government in 1947). The seizure of the former German assets by the Soviet Union in 1946 and the nationalisation of heavy industry and banking in the same year (by which the government intended, amongst other things, to protect the Austrian economy from such seizures, thus the energy supply was delegated to the provinces by the 2nd  Nationalisation Act of 1947) resulted in a far-reaching restructuring of the economy and successfully promoted the development of the western provinces.

All the federal provinces worked together to achieve the reconstruction of St. Stephen's Cathedral, which was completed in 1952. Other key objectives of reconstruction in the cultural field were to repair the war damage to the State Opera, the Burgtheater and other theatres, museums, schools and universities: the institutions themselves had been preserved, and they were reformed and able to represent Austria abroad on many occasions (1948 exhibition of Austrian art in the US and Western Europe, from 1945 Salzburg Festival, 1946 Bregenz Festival, 1949 Vienna Festival; Vienna Philharmonic Orchestra and Vienna Symphony Orchestra, provincial orchestras). Cultural activities had to be promoted by public subsidies, and persons engaged in the fine arts had to struggle particularly hard for survival.

After the death of K. Renner on December 31, 1950, T. Koerner was elected Federal President in 1951, continuing the line of Socialist presidents (until 1986); Federal Chancellor L. Figl was replaced by J. Raab in 1953; Finance Minister R. Kamitz (1952-1960) started a new economic strategy (the annual inflation rate from 1948 to 1951 had been between 30 % and 35 %), which reduced taxes, achieved a consolidation of the budget, and introduced a market economy with due consideration to social aspects combined with the promotion of private enterprises and the development of the nationalised industries; tourism had also started to become an important economic factor in the western provinces.

After 1953, the tensions between Austria and the Soviet occupying forces began to subside (the costs of occupation were no longer to be borne by Austria, reduced surveillance in the occupied zones, the building sites of the Autobahn and the Ybbs-Persenbeug power plant were returned to Austria), which made it possible to rebuild cultural monuments and to boost school and housing construction; compared with the years immediately after World War II, Austrians were clearly on their way to new prosperity.

After intense and long drawn-out negotiations, the State Treaty was finally signed in Vienna on May 15, 1955, the last remaining occupying forces were withdrawn and the Nationalrat (National Council) passed a constitutional law incorporating permanent Neutrality on October 26, 1955,(a National Holiday since 1965). Austria had become a sovereign state again.

2) Continuation of the Grand Coalition 1955-1966: due to its pledge to neutrality, Austria had gained a new position in Europe. It became a member of the United Nations UNO in 1955 and later on also participated in UN peace operations ( UN Missions). Austria has also been a member of the Council of Europe since 1956. Neutrality was tested for the first time during the Hungarian Revolution of 1956. The newly formed Federal Armed Forces were deployed to protect the Austrian border. In addition, Austria was strongly affected by an enormous tide of refugees from Hungary.

The emergence of the NATO and Warsaw Pact military blocs gave Austria´s neutrality additional significance as the venue for globally important meetings such as that between N. S. Kruschhev and J. F. Kennedy in Vienna on June 4 and 5, 1961. However, it did not permit Austria to join the EEC (European Economic Community) and Austria became a member of the looser, strictly economic association European Free Trade Association (EFTA) in 1960.

Election returns brought relatively small changes in the division of the votes between the two major parties; the FPOe ( Freiheitliche Partei Oesterreichs) had been represented in the Nationalrat since 1956 (6 seats), the KPOe (formerly 3 seats) held no seats after 1959. The SPOe (A. Schaerf and F. Jonas as Federal Presidents) followed a more liberal course under B. Pittermann (new party programme); in the OeVP A. Gorbach was succeeded by hardliners such as J. Klaus (Federal Chancellor) and H. Withalm (secretary general) in 1963. Radical political groups also raised their heads. National Socialist remarks by T. Borodajkewycz caused riots in 1965. F. Olah was expelled from the SPOe in 1964 and founded a new party which unsuccessfully stood for election in 1966. Generally speaking, the traditional political camps were starting to disintegrate and Proportional Democracy fell into disrepute.

Foreign policy was determined by the conflict over South Tyrol (terrorist attacks, arrests). B. Kreisky even took the problem to the UN in 1959 but new bomb attacks followed in 1961 and South Tyrol´s autonomy was eventually increased in 1964/65. Relations to the member states of the Council for Mutual Economic Assistance (COMECON), which was dominated by the U.S.S.R., were intensified after 1964.

The media experienced a time of transformation, the number of party newspapers decreased and the tabloid press gained ground, and television spread rapidly. The undiminished influence of the parties on the media resulted in a referendum on the management of the ORF broadcasting company in 1964 and the restructuring of the broadcasting system in 1966 (ORF, under Intendant-General Bacher).

The Concordat made the School Legislation of 1962 possible (9th  grade with Polytechnischer Lehrgang course, restructuring of secondary and advanced schools, transfer of teacher training to teacher training colleges). The level of education of the young generation was raised considerably. Many new buildings were erected for primary and secondary schools, other venues for cultural events were built (Wiener Stadthalle, 1958; Grosses Festspielhaus in Salzburg, 1960), international exhibitions were brought to Vienna, the Museum of the 20th  Century (Museum des 20. Jahrhunderts) was founded in Vienna, provincial and municipal museums were expanded; following in the steps of F. Wotruba and H. Boeckl a new generation of artists emerged (F. Hundertwasser, Vienna School of Fantastic Realism), H. v. Doderer became a leading figure in the field of literature; Authors of the younger generation such as I. Bachmann were supported by H. Weigel and others.

The transformation of the economic and social structure as well as increasing mechanisation led to a reduction of agricultural jobs; initially, the redundant capacities were taken up by Industry, later on by the service sector. The status and situation of blue-collar workers improved and became similar to that of white-collar workers and more and more women started to take jobs outside the home. Urbanisation increased and certain handicrafts disappeared while new occupations emerged. As regards demographic patterns, there were some first signs of a general tendency towards over-ageing, the improvements in the social system (ASVG 1955 (Allgemeines Sozialversicherungsgesetz); health and social insurance agency for farmers and self-employed persons) strengthened social security.

During the 1960s many housing projects were planned (satellite towns, housing estates, increase in second homes), the extension of the road network (Autobahn, Schnellstrasse roads, federal roads) did not yet meet with resistance.

The Grand Coalition was in crisis from 1962 onwards (Habsburg Affair in 1962 - a dispute arose in 1962 over the question of whether certain members of the Habsburg family should be allowed to visit Austria; the SPOe tried to form a small coalition with the FPOe; a tougher line was pursued by the OeVP, Olah Crisis and Fussach Affair in 1964 - demonstrations in Fussach, Vorarlberg, against the plan to name an Austrian tourist boat on Lake Constance "Karl Renner" instead of "Vorarlberg") and the legislative period ended prematurely in 1965. In the elections on March 6, 1966, the OeVP returned to parliament with an absolute majority.

3) One-party government formed by the OeVP 1966-1970: After the election, negotiations for a new coalition government failed, the western provinces dominated the new government of Federal Chancellor J. Klaus and parliamentary work was mainly characterised by confrontation between government and opposition. The government, which for the first time included a woman (G. Rehor), endeavoured to pursue a policy of non-confrontation and to introduce important political reforms, which could however only be partially implemented. Parliament did however manage to enact a large number of new laws. The structure of the parties was changed again and within the OeVP the Oesterreichischer Arbeiter- und Angestelltenbund (OeAAB) went through a crisis (scandal around V. Muellner in Lower Austria; failure of H. Drimmel in Vienna). The SPOe changed its course, B. Kreisky succeeded B. Pittermann as party chairman and distanced himself from the KPOe. Both parties, SPOe and OeVP, increasingly called on experts, the "New Left" was given fresh impetus and youth riots broke out in 1968. The KPOe lost its last seats in the provincial diets (Czechoslovakia crisis), O. Habsburg was permitted to enter Austria.

The number of university students increased sharply, new institutions of higher education were built in Salzburg, Linz and Vienna, the University of Innsbruck was expanded and a state scholarship system was introduced. The government had to carry out unpopular tax increases in order to cope with budgetary and structural problems (Koren Plan 1967/68).

4) One-party governments formed by the SPOe 1970-1983: In the national elections on March 1, 1970, the SPOe managed to win a plurality of votes with 81 seats (formerly 74), followed by the OeVP with 78 seats (formerly 85); the FPOe won 6 mandates. Federal Chancellor J. Klaus did not want to establish contacts with the FPOe; however, B. Kreisky formed a Socialist minority government tolerated by the FPOe; the electoral law reform, which increased the number of members of parliament from 165 to 183, would give the FPOe a distinct advantage. Kreisky called for new elections in 1971, when the SPOe won an absolute majority of 93 seats and formed a one-party government, which contained 3 women. Its programme mainly aimed at modernising all aspects of life in Austria. The head of the Ministry of Science, H. Firnberg, reorganised the universities in 1975 (foundation of Klagenfurt University in 1973, expansion of the universities in Salzburg and Linz, the Kunsthochschule Linz was taken over by the state, further university buildings were constructed). Under the Ministers for Education L. Gratz (1970-1971) and F. Sinowatz (1971-1983) many federal school buildings were leased, but construction of primary and secondary schools stagnated since the number of pupils was declining. The 1970s saw intense promotion of adult education ( Volkshochschulen) and youth culture (Arena movement in Vienna from 1973); more attention was given to the restoration and maintenance of monuments, historical exhibitions in nearly all provinces ( provincial exhibitions) met with great interest, village renewal was encouraged. Austria also produced two Nobel laureates in the persons of K. Frisch and K. Lorenz in 1973.

In 1972 the Ministry of Health was established. Important legal reforms were realised by C. Broda: a new Criminal Law entered into force in 1975 ( Abortion, Legal Limit for, despite the opposition of the Roman Catholic church), a Family Law reform was enacted in 1975/1978.

Between 1970 and 1974 Austria experienced an economic boom, which created a need for a large number of guest workers from Turkey and what was then Yugoslavia. This saw the beginning of changes in Austrian society which continued until well into the 1990s. A high degree of social harmony was guaranteed by the social partnership ( Paritaetische Kommission). The nationalised industry was to be strengthened by mergers; the OeIAG (Oesterreichische Industrieholding AG) companies employed 103,000 persons in 1970, the VOEST-Alpine (Vereinigte Oesterreichische Eisen- und Stahlwerke AG) was founded in 1972 (effective from January 1, 1973), the manufacturers of special steel were concentrated in the Vereinigte Edelstahlwerke AG (VEW) and the merger of chemical companies with OeMV resulted in vigorous expansion in this sector as well. Extraction of coal was largely discontinued because it was no longer profitable. In the energy sector, the systematic development of power plants along the River Danube was undertaken ( Donaukraft). The Zwentendorf nuclear power plant was completed but it was prevented from going into operation by a referendum on November 5, 1978. Natural gas and crude oil became more and more important for energy supply. The international energy crisis of 1973/1974 considerably influenced the economic situation. A new Trade Regulation Act brought about further modernisation in 1974, but farmers´ incomes dropped (owners of medium-sized farms increasingly became part-time farmers), while the real wages of workers increased. Austrians´ way of living changed (further motorization, longer holidays, second homes) and commuting increased.

Regional structures changed due to the merging of municipal areas (in Lower Austria, Carinthia) and high demands on infrastructure (water supply, sewage systems, waste management) and the social services (kindergartens, health care, old people´s homes); in retail trade, supermarkets prevailed over small stores.

As regards foreign policy, Austria sought to play an active role in international politics; the Strategic Arms Limitation Talks (SALT) took place in Vienna in 1975, the SALT II Agreement was signed in Vienna in 1979 (by J. Carter and L. Brezhnev) and Vienna hosted the North-South Conference in 1981. When the Vienna International Centre was completed in 1979, Vienna became the third official headquarters of the UN alongside New York and Geneva. Austria also participated in the Helsinki Conference (1975) and ensuing meetings of the CSCE. Kreisky became personally involved in issues relating to the Middle East conflict (PLO Bureau in Vienna, visit of Muammar al-Gaddafi in 1982; UN mission on the Golan Heights between Israel and Syria). Relations with many communist states were improved (especially GDR, Poland, Hungary, U.S.S.R.), while relations with Czechoslovakia and Yugoslavia ( Carinthian Conflict over Bilingual Signposts 1972, Ethnic Minorities Act 1976) remained strained.

Due to the lively contacts to the Middle East, Austria was also more strongly affected by international terrorism: terrorist attack in Marchegg in 1973; "OPEC attack" by terrorists led by "Carlos" on December 22, 1975; raid on a bank in Vienna by German terrorists on December 13, 1976; kidnapping of the industrialist W. M. Palmers and of L. Boehm in 1977; assassination of the Vienna municipal councillor H. Nittel on May 1, 1981; terrorist attack on an El-Al plane at Vienna International Airport in 1985.

In the middle of the election campaign for the national elections, on July 19, 1975, the OeVP chairman K. Schleinzer was killed in an accident and J. Taus was designated new party chairman. Although the OeVP was successful in the provinces, the SPOe under Kreisky again managed to reach an absolute majority of votes in the national elections on October 5, 1975. From 1976 onwards, the predominance of the SPOe more and more affected the organisation of the state, especially in personnel decisions, i.e. political affiliation became the main criteria for high-level public service and management positions. In 1977, the Ombudsman´s Office was established. Finance Minister H. Androsch became Vice-Chancellor, but tensions soon arose between him and Kreisky. Defence Minister K. Luetgendorf (until 1977) reduced the length of military service and under O. Roesch the Federal Armed Forces were divided into a task force and the Landwehr reserve. In 1979, extensive manoeuvres were carried out in order to prove the success of the reorganisation; however, the issue of investing into enhanced equipment led to tough discussions.

After 1977, the economy ran into trouble, a development that was at first hardly noticed on account of the expansion of VOEST and VEW, although the general situation of the other heavy and textile industries was becoming more and more critical (bankruptcy of Voeslauer AG in 1978). What new businesses were established at that time needed enormous subsidies (engine production in Wien-Aspern 1982, Philips video works in Vienna (Liesing)), many jobs were destroyed by large-scale insolvencies (e.g. Eumig 1978); from 1978, the crisis affected businesses of the Creditanstalt-Bankverein group and from 1980 also of Laenderbank; the companies owned by OeIAG had to fight against a decline in sales and increasing competition from foreign countries. Domestic affairs were influenced by increased corruption and sleaze in political and business life, often culminating in huge scandals (e.g. concerning Vienna´s General Hospital in 1980, the Wohnbau Ost housing estate in 1982, Lucona Affair).

From the 1970s onwards, the budget deficit and public debt increased steadily (value-added tax was introduced in 1974) and reached its first real crisis in 1982. In addition, the balance of foreign trade, which often had to be bolstered by credits to Eastern European states (Poland, GDR), deteriorated; the drop in orders for the construction industry added to the unemployment rate, which revived discussions over the introduction of the 35-hour week. In spite of the unfavourable economic climate, state expenditure for new social measures such as the further expansion of hospitals increased, but their costs escalated.

In the 1979 national elections, the SPOe under Kreisky reached its best result ever with 95 seats, the OeVP obtained 77 seats and the FPOe 11. J. Taus resigned as OeVP chairman and was succeeded by A. Mock, in the FPOe chairman F. Peter was succeeded by A. Goetz in 1978, and N. Steger in 1980. In 1982, two new Green parties emerged: the Vereinte Gruene Oesterreichs (VGOe) and the Alternative Liste Oesterreichs (ALOe). When the government was formed, more women than ever before became members of the cabinet, H. Androsch withdrew from office in 1981 due to continuous conflicts with Kreisky and became CEO of the Creditanstalt bank.

R. Kirchschlaeger (SPOe candidate), who had been elected Federal President in 1974 after F. Jonas´ death, was re-elected with 80 % of the votes and without an OeVP opponent in 1980 and was afterwards held in great esteem, both in Austria and abroad.

5) Coalition governments between 1983 and 1994: In the national elections of April 24, 1983, the SPOe lost its absolute majority and gained only 90 seats, the OeVP obtained 81 seats, the FPOe 12. Kreisky resigned and his successor F. Sinowatz entered into a coalition with the FPOe, which was given numerous posts and functions (vice-chancellor, minister of trade, minister of defence, minister of justice). Within the SPOe a new generation of politicians took over (Minister K. Blecha, H. Zilk, H. Moritz, H. Fischer). One of the main demands of the FPOe consisted in the reduction of privileges for politicians; due to growing environmental awareness, nature conservation increasingly found public support. After the occupation of Hainburg Au in December 1984, other projects to build power plants along the River Danube met with fierce opposition and the ideas of the green movement ( Green Parties) started to have an effect on all parties.

The opening of the Zwentendorf nuclear power plant was rejected by a national plebiscite in 1978 and after the reactor disaster of Chernobyl (U.S.S.R., now Ukraine) on April 26, 1986, nuclear energy was no longer an issue in Austria. In order to make use of the established infrastructure in Zwentendorf, a huge thermal power plant was built in Duernrohr in the Tullnerfeld Plain.

However, the most serious problem of the Austrian government was the OeIAG crisis; in addition, the Steyr-Werke works also ran into trouble, large-scale dismissals were evaded by early retirement schemes for older workers. First signs of improvement in 1984 were shattered in 1985 by a series of ill-advised speculations in the state-run VOEST subsidiary Intertrading. The VOEST management stepped down collectively; the group was restructured.

In budget issues, the main objective was to slow down new borrowing and to reduce the burden of debts incurred in the Kreisky era. The OeVP benefited from these problems politically on the regional level while the SPOe came under pressure due to the Androsch Affair (incompatibility between his function as Minister of Finance and continued connections with his accountancy firm; subsequently prosecution for tax evasion in connection with an inheritance). In the autumn of 1984 F. Vranitzky became Finance Minister and L. Gratz Foreign Minister.

R. Kirchschlaeger's second period in office as Federal President ended in 1986. The following election campaign was characterized by controversy about the participation of the OeVP candidate K. Waldheim as an officer in the German army during World War II. Waldheim was elected president on June 8, 1986, but remained ostracised internationally. The US government placed him on its watch list of undesirable aliens and Israel minimised its diplomatic relations with Austria. Although an international commission of historians in 1987/1988 found no evidence that Waldheim had personally committed any war crimes, he remained isolated on the international political scene.

In the summer of 1986 (June, 16) F. Sinowatz resigned as Federal Chancellor and was succeeded by F. Vranitzky. FPOe party chairman N. Steger was replaced by J. Haider in 1986. After J. Haider was elected chairman of the FPOe, the SPOe broke off the coalition with the FPOe on September 15, 1986. In the national elections on November 23, 1986, the SPOe remained the strongest party despite a loss of 10 seats, the OeVP obtained 77 seats (loss of 3), but the FPOe gained 6 seats with a total of 18, and the Greens won 8 seats. After the 1986 elections, the SPOe and OeVP formed a grand coalition. Formally they were on equal terms, but the SPOe held more important positions (finance, interior and social affairs), A. Mock became Vice-Chancellor and Foreign Minister.

The structuring of the Federal Armed Forces met with little approval on the part of recruits and therefore the tendency to enter Civil Alternative Service began to rise. However, the collapse of the Eastern bloc (1989-1991) and the war in Yugoslavia (1991-1995) showed the importance of the Armed Forces.

Under Justice Minister E. Foregger the lawsuits revolving around the Lucona Affair and the Noricum Scandal were decided; Blecha and Gratz resigned as ministers.

The transport system saw the building of an Underground Railway in Vienna and the improvement of railway transport. Vienna International Airport was expanded, but the further extension of the autobahn network (Pyhrn-Autobahn) met with opposition from environmentalists.

Austria´s economic policy was mainly directed towards achieving EEC membership. After moderate growth rates between 1982 and 1987, a major upswing took place in 1988/1989 despite the imposition of strict environmental regulations. The revitalisation of the remaining nationalised industry offered favourable prospects, the stable monetary policy was oriented on the German mark. In 1989 and 1993, tax reforms came into effect, employment rates rose and the demand for additional manpower from foreign countries ("guestworkers") increased. The economy again experienced setbacks by the deficits of AMAG in 1992 and by the dissolution of the Austrian Industries group. The influence of foreign countries increased, as this was seen as the only way to create new industrial jobs (BMW in Steyr, Chrysler in Graz). Nevertheless the number of persons employed in industry between 1974 and 1994 fell from 680,000 to 480,000, on the other hand the civil service needed as many as 700,000 employees in 1994. The OeBB (Austrian Federal Railways) ran up an enormous deficit and became an independent organisation in 1994. The "Neue Bahn" reform plans (low-altitude tunnels under the Semmering and Brenner passes, priority for rail transport over goods transport by road, harmonisation of public transport systems) failed to bring about the expected fundamental changes and the maintenance of branch railway lines caused further losses. The banking sector saw several mergers (Zentralsparkasse and Laenderbank formed Bank Austria, concentrations in Savings Banks).

The population structure underwent considerable changes due to higher life expectancy and a decline in the number of children born (the period 1971-1988 saw a decline of 500,000) and a relatively high rate of immigration until the mid-1990s (1981-1991: 216,000). The number of women working outside the home increased, as did the divorce rate and the number of single-person households, leading to changes in traditional family structure. The costs of pension funds due to higher life expectancy and early retirement led to increasing deficits in the pension insurance agencies, which started to be reformed in 1988. the rates led to new developments concerning traditional family structures (single-person households. The "Pflegeversicherung" (public assistance for payment for nursing care) agreed upon in 1993 was the first systematic arrangement for the assistance of persons requiring nursing care but revealed the financial limits of the welfare state. Measures against soaring costs of hospitals failed. A number of laws on environmental protection were passed in the wake of increasing environmental consciousness ( environmental policy). In the field of waste management, waste separation and recycling became increasingly important.

The media landscape was characterised by increasing complexity following liberalisation and increasing competition. In 1992, as many as 94 % of all Austrian households had at least one colour television set; the use of satellite and cable television weakened the monopoly of the ORF. Director-General T. Podgorski was succeeded by Bacher (1990-1994), whose successor G. Zeiler adapted ORF policy to accommodate international developments. On the newspaper market, the tabloid press profited considerably from increased competition: alongside the financially most successful Austrian newspaper, the "Neue Kronen Zeitung", the tabloids "taeglich Alles" and "Die ganze Woche" were also established. In the quality newspapers sector, the "Standard" (founded in 1988) and provided competition for the long-established "Die Presse" and for the federal edition of the "Salzburger Nachrichten" Press).

The Salzburg Festival saw the end of an era with the death of H. v. Karajan in 1989, but became open to new influences under the direction G. Mortier. The other provincial capitals also experienced a diversification and a qualitative improvement of their cultural institutions. Alongside the Salzburg Festival and the Bregenz Festival, in Carinthia the Carinthischer Sommer also gained acceptance. Upper Austria promoted the Bruckner Festival ( "Ars Electronica", Klangwolke); the Danube Festival ( Donaufestival) in Lower Austria, the festivals "steirische herbst" and "styriarte" in Styria, and the Early Music Festival in Innsbruck (Tyrol) are further example of Austrian cultural diversity. As director of the Burgtheater from 1986, C. Peymann gave the theatre an unmistakable profile, but caused several controversies with his productions of contemporary Austrian dramatists such as T. Bernhard, P. Handke, E. Jelinek. In 1987 Austria designed the Europalia in Belgium, while the federal museums began a phase of modernisation (financed to the amount ATS 1 billion); in 1994 the Republic of Austria gained important works of the Austrian modern era with the acquisition of the Leopold Collection.

At that time, the Roman Catholic church, too, underwent considerable changes. The Roman Catholic church (78 % of the Austrian population in 1991) had to cope with an increasing lack of priests and a shortage of young monks and nuns. The number of people registered as members of Christian religious communities as well as the number of those taking an active part in the church is on the decrease. In Vienna and Vorarlberg, Islamic mosques were built. Pope John Paul II visited Austria in 1983 and 1989; Cardinal F. Koenig, who had a enlightened attitude to social change, resigned as Archbishop of Vienna in 1985 due to his advanced age. The appointment of his successor H. Groër marked the beginning of a new era of conservatism (1989 appointments of G. Eder in Salzburg, K. Kueng in Feldkirch, 1991 K. Krenn in St. Poelten).

The EFTA (European Free Trade Association) had been weakened in 1972 by the withdrawal of Great Britain, Denmark and Ireland, which joined the EEC (Austria and the other EFTA countries had successfully negotiated customs facilities in the same year), and Austria applied for membership in the European Community in 1989 and was already taking part in EC research programmes (Eureka).

In the autumn of 1989, foreign policy issues were dominated by the political changes in Eastern Europe, Hungary and Czechoslovakia (separation into Czech Republic and Slovakia from January 1, 1993) became democratic states. Yugoslavia went through a dramatic process of disintegration from 1991 onwards, which led to years of civil war south-east of Austria; the war then shifted from Slovenia to Croatia, then to Bosnia, from where a large number of refugees fled to Austria; Austria attempted to provide efficient aid for the civilian population of former Yugoslavia with the relief campaign "Nachbar in Not" ("Neighbour in Need"). A rise in the number of asylum seekers and illegal immigrants in the 1990's led to an increase in the number of so-called "foreigners" in Austria. In January 1993, the FPOe called for a popular initiative on aliens and immigration, calling for Austrians to put "Austria first" ("Oesterreich zuerst"); more stringent regulations on aliens´ residence were passed in the same year and later made even more severe.

The end of the East-West conflict renewed heated debates about Austria´s neutrality, the government permitted air transit over Austria for UN missions (Persian Gulf War 1991); with the approval of the signatory powers some restrictive provisions of the State Treaty were dropped in 1990 but the ban on ABC weapons was maintained.

In the October 7, 1990 elections, the SPOe managed to hold its 80 seats, the OeVP lost 17 seats and dropped to only 60, the FPOe gained 15 seats with a total of 33, the Greens received 10 seats. The grand coalition was continued with new ministers.

The SPOe was renamed "Social Democratic Party" in 1991, the newspaper "Arbeiterzeitung", party newspaper of the SPOe until 1989, was discontinued in 1991 and the Verlagshaus Vorwaerts publishing house was shut down. In 1988, F. Vranitzky succeeded F. Sinowatz as party chairman. J. Riegler became the new OeVP chairman (1989) after A. Mock and was succeeded by E. Busek after a serious defeat in the 1990 elections. Mainly owing to its aggressive opposition policy, the FPOe continued to win votes, J. Haider became Landeshauptmann (provincial governor) in Carinthia but was voted out of office in 1991. In 1993, Heide Schmidt and 5 other members of parliament split off from the FPOe and formed the Liberales Forum (Liberal Forum). The Gruene Alternative (headed by F. Meissner-Blau until 1988) managed to overcome its stagnation under M. Petrovic by 1994. KPOe chairman F. Muhri stepped down in 1990, his successors abolished the central committee, the party newspaper "Volksstimme" and regional papers were discontinued in 1992.

There were also strong political shifts in the provinces and the municipalities in the 1990s (weakening of the OeVP and SPOe, strengthening of the FPOe and more seats for the Greens and the Liberal Forum); the OeVP lost its absolute majority in Styria and in Upper Austria in 1991, in Lower Austria in 1993; in Vienna the FPOe had become the second strongest party by 1991, but the SPOe managed to hold its absolute majority until 1996. H. Zilk was succeeded by M. Haeupl as mayor of Vienna in 1994.

As OeVP candidate, T. Klestil was elected Federal President on May 24, 1992; he has managed to assume a more active role in domestic and foreign politics than his predecessor Waldheim, and was re-elected for a second period in office in 1998.

In the 1993 electoral law reform, the 45 constituencies were reduced to 9 and a minimum of 4 % of the popular vote was fixed as a prerequisite for access to parliamentary seats.

The elections to the Nationalrat on October 9, 1994, ended the preponderance of the two dominating parties which had lasted since 1945. The ruling parties suffered heavy losses, the SPOe dropped to 35.4 % of the vote and 65 instead of 80 seats, the OeVP to 27.7 % and 52 instead of 60 seats, whereas the opposition parties managed to win votes. The FPOe came close to the OeVP with 22.6 % and 42 seats, the Greens received 7 % of the vote and 13 seats, the Liberales Forum won 11 seats in the Nationalrat with 5.7 % of the vote. The coalition parties lost their two-thirds majority in parliament and the SPOe and OeVP formed a coalition government, whose most important priority was to consolidate the budget.

6) European Union since 1995: Concrete negotiations on Austria´s EU membership were taken up in 1993. In 1994 the European Economic Area (EEA), comprising all the EU states and all EFTA states with the exception of Switzerland, entered into force. Negotiations for Austria's accession to the EU were concluded in 1994, and in a referendum held on June 12, 1994, more than 65 % of the electorate voted in favour of EU entry. Austria formally joined the European Union on January 1, 1995, and F. Fischler became the first Austrian EU Commissioner (for Agriculture, later also for Fisheries).

In spring 1995 restructuring took place within the two government parties (in the SPOe in April and the OeVP in May); E. Busek was replaced by W. Schuessel as OeVP party chairman and Vice Chancellor and also became Minister of Foreign Affairs. Disagreements concerning the budget for 1996 and 1997 (meeting the criteria for introduction of the Euro) led to elections on December 17, 1995. The SPOe won 71 seats, the OeVP 53, the FPOe 40, the Greens 9 and the Liberales Forum 10.

The SPOe-OeVP coalition was resumed, V. Klima became Minister of Finance and in the budgets of 1996/1997 managed to fulfill the criteria for the single currency. Klima succeeded Vranitzky as Federal Chancellor in January 1997 and R. Edlinger became Minister of Finance. Changes in pension and health insurance enabled all gainfully employed persons to be covered by social security and also had an effect on the pension scheme for civil servants and regulations concerning their gainful employment after retirement from the civil service.

EU accession also brought about changes in the economic and business sector, with especially dramatic effects on the co-operatives, e.g. insolvency of the Konsum in 1995, restructuring of the agricultural co-operatives. In banking, Bank Austria acquired a majority in the Creditanstalt bank from the Republic of Austria; the Erste Oesterreichische Spar-Casse-Bank merged with GiroCredit to form the Erste Bank der oesterreichischen Sparkassen. The economy flourished due to increasing exports and low inflation, and the effects of globalisation also began to be felt by Austrian firms.

The Catholic church in Austria has also been undergoing a number of changes. Cardinal Groer resigned as Archbishop of Vienna in 1995 and was succeeded by C. Schoenborn. The Church Referendum of 1996 tried to make the Church more aware of the concerns of its lay members and served as a model for similar campaigns in Germany and the USA.

In 1996 the first direct elections for the European Parliament took place in Austria; from July to December 1998 Austria took over the presidency of the Council of the European Union; the Euro has been official currency in Austria since January 1, 1999, and the Austrian Schilling is gradually being phased out. The FPOe continued to gain in popularity, became the strongest party in the Carinthian provincial elections and J. Haider was re-elected as Landeshauptmann (Provincial Governor). In the national elections of October 3, 1999 the FPOe received 26.91% of votes (52 seats) and became the second largest party, just ahead of the OeVP, which also gained 26.91% of votes and 52 seats. Although the SPOe suffered considerable losses, it remained the largest party, having gained 33.15% of votes and 65 seats. Coaliton negotiations between the SPOe and the OeVP broke down after a few month. The OeVP and FPOe formed a government in February 2000 under Federal Chancellor Wolfgang Schuessel. This triggered off protest demonstrations in Austria and had serious repercussions abroad, such as the sanctions imposed on Austria by the other EU member states. J. Haider was replaced S. Riess-Passer (who was also Vice-Chancellor) as FPOe party chairperson. After 30 years of government, the SPOe became an opposition party and A. Gusenbauer became leader of the federal party. The government still regards consolidating the budget as its major objective.

Literature#