Austria

Introduction

Hapsburg Crest

Background

Austria has a rich history as the center of power for the Austro-Hungarian Empire and the Hapsburg Dynasty. After World War I, the empire dissolved and Austria became a small republic. Nazi Germany seized the country in 1938 and the Allies began a ten-year occupation of the country in 1945. This occupation ended with the signing of a State Treaty in 1955 and a subsequent constitutional law declaring “perpetual neutrality” (concerning U.S.-Soviet relations). Austria became a member of the European Union (EU) in 1995 and the European Monetary Union in 1999.

• Capital: Vienna
• Political structure: Federal Republic
• Federal President (Head of State): Heinz Fischer
• Federal Chancellor (Head of government): Wolfgang Shuessel
• Two Houses of National Parliament:
• Bundesrat (Upper House): 64 members appointed by state parliaments
• Nationalrat (Lower House): 183 members elected by proportional representation
• GDP composition by Sector: 3.5 percent agriculture, 25.7 percent industry, and 70.9 percent services (2003 est.)
• Primary Exports: machinery, metals, paper, textiles, food, livestock
• Currency: Euro (€)
• Language: German (official nationwide), Slovene (official in Carinthia), Croatian (official in Burgenland), Hungarian (official in Burgenland)
• Flag:

 

Economic Overview

The country is strategically located on the Danube trade route, connecting the East and West. Its economy is closely tied with other EU economies, especially Germany’s, which is the largest economy Europe. The European economy begun to recover from the economic slowdown begun in the late 1990’s and the Austrian government expects to realize a 1.7-2.1 percent economic growth in 2004. Its GDP increased from USD 206.2 billion in 2002 to an estimated USD 245.3 billion in 2003.

Austria has been struggling to resume its position of influence and innovation ever since the end of World War I and has relied primarily on the authority and international recognition of the EU. Since its membership into the EU in 1995, Austria has benefited from an increasing presence of foreign investors attracted to the country’s access to the European market and its proximity to the emerging economies in Central and Eastern Europe. The country also has one of the highest per capita incomes in the EU and has Europe's highest productivity growth rates (it also has the lowest number of days lost due to strikes). Some of the companies who have set up operations in Austria are BMW, Coca Cola, Ericsson, Hewlett, Nestlé, Opel, Siemens, and Sony DADC.

Economists emphasize that for Austria to remain competitive with other EU members and emerging economies, the country must improve its knowledge-based sectors and continue to deregulate its service sector. Recently, Austria has been making great strides towards creating a stronger information communications technology (ICT) sector. They have a formal e-Vision document, which outlines the development of policy and infrastructure. The document also establishes committees to design and regulate the initiative.