Summary

At the end of World War II, Austria was occupied by the four Allies. The occupation ended in 1955 on the condition that Austria would declare permanent neutrality, which the Soviet Union had required.

In the first half of the 1950s, relations with the newly founded European Coal and Steel Community were being discussed in Austria because the organization encompassed Austria’s two most important trading partners at that time, West Germany and Italy. But after the uprising in October–November 1956 in neighboring Hungary, Austria started to stress its neutrality and declined European Economic Community (EEC) membership. Instead, in 1960 Austria joined other European countries to create a less-integrated economic entity, the European Free Trade Association (EFTA).

In the mid-1980s, the debate about membership in the now European Community (EC) started again. Economic problems and a narrower interpretation of neutrality led to Austria’s application for EC (later European Union) membership in July 1989. After the fall of the Berlin Wall in November 1989 and the applications of other EFTA countries, Austria finally acceded to the EU on January 1, 1995 (along with Finland and Sweden). The political system and its economy adjusted relatively smoothly to the challenges of EU membership; “social partnership,” the close cooperation of trade unions and business groups, while losing some of its power, could maintain its influence on Austrian politics, and Eastern enlargement of the EU brought further economic advantages for Austria.

As one of the smaller EU countries and a non-NATO member, Austria has a somewhat unique position in the EU. Environmental policy and supporting EU membership of the Balkan countries are among Austria’s important activities. But the country has no close partners in the EU because it does not participate in the “Visegrad” group with the other Central European members. This difficulty was evident during the period of sanctions against the new Austrian government in 2000.