Austrians are a homogeneous people; 92% are native German speakers. Only two numerically significant minority groups exist15,000 Slovenes in Carinthia (south central Austria) and about 17,000 Croats in Burgenland (on the Hungarian border). The Slovenes form a closely-knit community. Their rights as well as those of the Croats are protected by law and generally respected in practice. The present boundaries of Austria, once the center of the Habsburg Empire that constituted the second-largest state in Europe, were established in accordance with the Treaty of St. Germain in 1919. Some Austrians, particularly near Vienna, still have relatives in the Czech Republic, Slovakia, and Hungary. About 74% of all Austrians are Roman Catholic. The church abstains from political activity. Small Lutheran minorities are located mainly in Vienna, Carinthia, and Burgenland.
The Austro-Hungarian Empire played a decisive role in central European history. It occupied strategic territory containing the southeastern routes to western Europe and the north-south routes between Germany and Italy. Present-day Austria retains this unique position.
Soon after the Republic of Austria was created at the end of World War I, it faced the strains of catastrophic inflation and of adapting a large government structure to the needs of a new, smaller republic. In the early 1930s, worldwide depression and unemployment added to these strains and shattered traditional Austrian society. In 1933, Engelbert Dollfuss formed a conservative autocracy. In February 1934, civil war broke out, and the Socialist Party was outlawed. In July, a coup d'etat by the National Socialists failed, but Nazis assassinated Dollfuss. In March 1938, Germany occupied Austria and incorporated it into the German Reich. This development is commonly known as the "Anschluss" (annexation).
At the Moscow conference in 1943, the Allies declared their intention to liberate and reconstitute Austria. In April 1945, both Eastern- and Western-front Allied forces liberated the country. Subsequently, the victorious allies divided Austria into zones of occupation similar to those in Germany with a four-power administration of Vienna. Under the 1945 Potsdam agreements, the Soviets took control of German assets in their zone of occupation. These included 7% of Austria's manufacturing plants, 95% of its oil resources, and about 80% of its refinery capacity. The properties returned to Austria under the Austrian State Treaty. This treaty, signed in Vienna on May 15, 1955, came into effect on July 27, and, under its provisions, all occupation forces departed by October 25, 1955. Austria became free and independent for the first time since 1938.
Since World War II, Austria has enjoyed political stability. A Socialist elder statesman, Dr. Karl Renner, organized an Austrian administration in the aftermath of the war, and the country held general elections in November 1945. All three major parties the conservative Peoples Party (OVP), the Socialists (later Social Democratic party or SPO), and Communists governed until 1947, when the Communists left the government. The OVP then led a governing coalition with the SPO that governed until 1966.
The 1955 Austrian State Treaty ended the four-power occupation and recognized Austria as an independent and sovereign state. In October 1955, the Federal Assembly passed a constitutional law in which "Austria declares of her own free will her perpetual neutrality." The second section of this law stated that "in all future times Austria will not join any military alliances and will not permit the establishment of any foreign military bases on her territory." The date on which this provision passedOctober 26became Austrias National Day. From then, Austria shaped its foreign policy on the basis of neutrality.
Austria became a member of the EU on January 1, 1995. Membership brought economic benefits and challenges and has drawn an influx of foreign investors. Austria also has made progress in generally increasing its international competitiveness. As a member of the Economic and Monetary Union (EMU), Austria has integrated its economy with those of other EU member countries, especially with Germanys. On January 1, 1999, Austria introduced the new Euro currency for accounting purposes.
In January 2002, Austria introduced Euro notes and coins in place of the Austrian schilling. Economists agree that the economic effects in Austria of using a common currency with the rest of the members of the Euro-zone have been positive.
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