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Austria-Austria and European Integration





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Austria Index

Given its dependence on international trade, Austria has always been interested in some form of customs union. Although it was recognized that there might be some competitive disadvantages in such associations, especially with countries that produced at more competitive prices, the Austrian government and Austrian manufacturers have always been even more afraid of being excluded. They feared that exclusion would prevent them from reaping any economies of scale and would ultimately consign them to an economic backwater.

The government, therefore, was anxious to join in some form of European economic association as several organizations were being shaped after World War II. It could not join the European Community (EC) as it was being formed, however, because of fear that this would violate the 1955 State Treaty prescription for neutrality. The member states of the EC called their organization the Common Market when they created it in 1958, but they made it clear from the beginning that it had a political as well as an economic purpose. Under those circumstances, Austria had to hold back as long as Europe was divided by the Cold War.

However, such considerations did not prevent Austria from joining the European Free Trade Association (EFTA--see Glossary) when it was formed in 1960. EFTA was a purely economic association, and its members included Finland, Sweden, and Switzerland, all neutral states that were not members of the North Atlantic Treaty Organization (NATO). Moreover, EFTA had no intention of becoming anything more than a trade association. EFTA was far from an ideal trading arena for Austria because most of its members were located on the periphery of Europe. EFTA countries came to account for less than 15 percent of Austria's trade, while 66 percent of its foreign trade was with the EC countries.

EFTA, however, did have a very important specific advantage from the Austrian standpoint because it did not require common tariffs. Thus, Austria could retain some control over the conditions under which its foreign trade operated, while expanding its close commercial links with a number of EC states (even as it remained formally outside the EC).

Austria attempted to obtain associate status in the EC despite the political barrier to full membership. As it became clear in the 1960s that some EFTA members, such as Britain, were beginning to edge toward EC membership, Austria began its own negotiations to obtain a special arrangement with the community. In 1972, after ten years of negotiations, Austria and the EC reached an agreement providing for a gradual lowering of tariffs to zero. Austria nonetheless remained outside the EC Common Agricultural Policy (CAP).

The Austrian government applied to join the EC in the summer of 1989, as the Soviet empire was crumbling and Moscow was no longer either disposed or able to use the neutrality restrictions of the State Treaty to bar Austria from membership. Like other EFTA states, Austrian officials agreed in 1991 to the formation of the European Economic Area (EEA) between EFTA and the EC as a preliminary step, but it also wanted to join the organization on its own.

Although Austria will probably not be able to join the European Union (EU)--as the EC came to be known in November 1993- -until 1995, by which time the Single Market should be well advanced, the government has taken steps to begin adapting the economy to EC standards. Along with adopting many EC laws and regulations through the EEA in 1991, the government has adopted a number of additional EC rules, including those governing the freedom of capital flows. These measures have been taken to ensure that the social partners and the economy as a whole would not be at a disadvantage when Austria becomes an EU member.

Under the terms of the agreement reached at the EC summit at Maastricht in December 1991, Austria's membership in the EU will also lead to membership in the new European Monetary Union (EMU) if Austria can meet the convergence requirements by 1997. These requirements include a number of features: an inflation rate within 2.5 percent of the three lowest in the EU; long-term interest rates within 2 percent of the three lowest rates; a government deficit below 3 percent of GDP; and a public-sector debt of less than 60 percent of GDP. As of 1993, Austria was able to meet these requirements, but there is no guarantee that that will be the case in 1997.

Austria tied the schilling to the deutsche mark in the 1960s, largely because the country could not function without a predictable exchange rate with its largest trading partner, West Germany. In part to reinforce that linkage, Austria joined the EMS and its ERM in 1979. This membership has meant that Austrian interest rates have matched those of the Bundesbank and, as a result, to all intents and purposes have been set in Frankfurt. Therefore, Austrian adherence to the EMU would be a logical extension of long-established policies, and Austrian currency would become whatever the EMU adopted, whether it is called the European Currency Unit (ECU) or the Euro-Mark as some have proposed.

The link to the deutsche mark has had a major advantage for Austria in that it has given the country a long period of low inflation and the kind of monetary stability that those who suffered through the terrible inflation of 1921-23 well appreciate. It is, however, also a disadvantage for Austria's international competitive position. Goods denominated in schillings, like goods denominated in deutsche marks, cannot count on any sales increases because of devaluation of the currency. In fact, the schilling has consistently increased in value since the end of the Bretton Woods fixed exchange-rate era in 1971. It has generally moved with the deutsche mark vis-à-vis the United States dollar.

Data as of December 1993



BackgroundOnce the center of power for the large Austro-Hungarian Empire, Austria was reduced to a small republic after its defeat in World War I. Following annexation by Nazi Germany in 1938 and subsequent occupation by the victorious Allies in 1945, Austria's status remained unclear for a decade. A State Treaty signed in 1955 ended the occupation, recognized Austria's independence, and forbade unification with Germany. A constitutional law that same year declared the country's "perpetual neutrality" as a condition for Soviet military withdrawal. The Soviet Union's collapse in 1991 and Austria's entry into the European Union in 1995 have altered the meaning of this neutrality. A prosperous, democratic country, Austria entered the EU Economic and Monetary Union in 1999. In January 2009, Austria assumed a nonpermanent seat on the UN Security Council for the 2009-10 term.
LocationCentral Europe, north of Italy and Slovenia
Area(sq km)total: 83,871 sq km
land: 82,445 sq km
water: 1,426 sq km
Geographic coordinates47 20 N, 13 20 E
Land boundaries(km)total: 2,562 km
border countries: Czech Republic 362 km, Germany 784 km, Hungary 366 km, Italy 430 km, Liechtenstein 35 km, Slovakia 91 km, Slovenia 330 km, Switzerland 164 km

Coastline(km)0 km (landlocked)

Climatetemperate; continental, cloudy; cold winters with frequent rain and some snow in lowlands and snow in mountains; moderate summers with occasional showers

Elevation extremes(m)lowest point: Neusiedler See 115 m
highest point: Grossglockner 3,798 m
Natural resourcesoil, coal, lignite, timber, iron ore, copper, zinc, antimony, magnesite, tungsten, graphite, salt, hydropower
Land use(%)arable land: 16.59%
permanent crops: 0.85%
other: 82.56% (2005)

Irrigated land(sq km)40 sq km (2003)
Total renewable water resources(cu km)84 cu km (2005)
Freshwater withdrawal (domestic/industrial/agricultural)total: 3.67 cu km/yr (35%/64%/1%)
per capita: 448 cu m/yr (1999)
Natural hazardslandslides; avalanches; earthquakes
Environment - current issuessome forest degradation caused by air and soil pollution; soil pollution results from the use of agricultural chemicals; air pollution results from emissions by coal- and oil-fired power stations and industrial plants and from trucks transiting Austria between northern and southern Europe
Environment - international agreementsparty to: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulfur 85, Air Pollution-Sulphur 94, Air Pollution-Volatile Organic Compounds, Antarctic Treaty, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling
signed, but not ratified: none of the selected agreements
Geography - notelandlocked; strategic location at the crossroads of central Europe with many easily traversable Alpine passes and valleys; major river is the Danube; population is concentrated on eastern lowlands because of steep slopes, poor soils, and low temperatures elsewhere
Population8,210,281 (July 2009 est.)
Age structure(%)0-14 years: 14.5% (male 609,748/female 581,144)
15-64 years: 67.5% (male 2,785,091/female 2,756,402)
65 years and over: 18% (male 612,613/female 865,283) (2009 est.)
Median age(years)total: 42.2 years
male: 41.1 years
female: 43.2 years (2009 est.)
Population growth rate(%)0.052% (2009 est.)
Birth rate(births/1,000 population)8.65 births/1,000 population (2009 est.)
Death rate(deaths/1,000 population)9.98 deaths/1,000 population (July 2009 est.)

Net migration rate(migrant(s)/1,000 population)1.85 migrant(s)/1,000 population (2009 est.)
Urbanization(%)urban population: 67% of total population (2008)
rate of urbanization: 0.7% annual rate of change (2005-10 est.)
Sex ratio(male(s)/female)at birth: 1.05 male(s)/female
under 15 years: 1.05 male(s)/female
15-64 years: 1.01 male(s)/female
65 years and over: 0.71 male(s)/female
total population: 0.95 male(s)/female (2009 est.)
Infant mortality rate(deaths/1,000 live births)total: 4.42 deaths/1,000 live births
male: 5.39 deaths/1,000 live births
female: 3.41 deaths/1,000 live births (2009 est.)

Life expectancy at birth(years)total population: 79.5 years
male: 76.6 years
female: 82.56 years (2009 est.)

Total fertility rate(children born/woman)1.39 children born/woman (2009 est.)
Nationalitynoun: Austrian(s)
adjective: Austrian
Ethnic groups(%)Austrians 91.1%, former Yugoslavs 4% (includes Croatians, Slovenes, Serbs, and Bosniaks), Turks 1.6%, German 0.9%, other or unspecified 2.4% (2001 census)

Religions(%)Roman Catholic 73.6%, Protestant 4.7%, Muslim 4.2%, other 3.5%, unspecified 2%, none 12% (2001 census)
Languages(%)German (official nationwide) 88.6%, Turkish 2.3%, Serbian 2.2%, Croatian (official in Burgenland) 1.6%, other (includes Slovene, official in Carinthia, and Hungarian, official in Burgenland) 5.3% (2001 census)

Country nameconventional long form: Republic of Austria
conventional short form: Austria
local long form: Republik Oesterreich
local short form: Oesterreich
Government typefederal republic
Capitalname: Vienna
geographic coordinates: 48 12 N, 16 22 E
time difference: UTC+1 (6 hours ahead of Washington, DC during Standard Time)
daylight saving time: +1hr, begins last Sunday in March; ends last Sunday in October
Administrative divisions9 states (Bundeslaender, singular - Bundesland); Burgenland, Kaernten (Carinthia), Niederoesterreich (Lower Austria), Oberoesterreich (Upper Austria), Salzburg, Steiermark (Styria), Tirol (Tyrol), Vorarlberg, Wien (Vienna)
Constitution1920; revised 1929; reinstated 1 May 1945; note - during the period 1 May 1934-1 May 1945 there was a fascist (corporative) constitution in place

Legal systemcivil law system with Roman law origin; judicial review of legislative acts by the Constitutional Court; separate administrative and civil/penal supreme courts; accepts compulsory ICJ jurisdiction

Suffrage16 years of age; universal; note - reduced from 18 years of age in 2007
Executive branchchief of state: President Heinz FISCHER (SPOe) (since 8 July 2004)
head of government: Chancellor Werner FAYMANN (SPOe) (since 2 December 2008); Vice Chancellor Josef PROELL (OeVP) (since 2 December 2008)
cabinet: Council of Ministers chosen by the president on the advice of the chancellor
elections: president elected by direct popular vote for a six-year term (eligible for a second term); presidential election last held 25 April 2004 (next to be held in April 2010); chancellor formally chosen by the president but determined by the coalition parties forming a parliamentary majority; vice chancellor chosen by the president on the advice of the chancellor
election results: Heinz FISCHER elected president; percent of vote - Heinz FISCHER 52.4%, Benita FERRERO-WALDNER 47.6%
note: government coalition - SPOe and OeVP
Legislative branchbicameral Federal Assembly or Bundesversammlung consists of Federal Council or Bundesrat (62 seats; members chosen by state parliaments with each state receiving 3 to 12 members in proportion to its population; members serve five- or six-year terms) and the National Council or Nationalrat (183 seats; members elected by direct popular vote to serve five-year terms)
elections: National Council - last held 28 September 2008 (next to be held by September 2013)
election results: National Council - percent of vote by party - SPOe 29.3%, OeVP 26%, FPOe 17.5%, BZOe 10.7%, Greens 10.4%, other 6.1%; seats by party - SPOe 57, OeVP 51, FPOe 34, BZOe 21, Greens 20

Judicial branchSupreme Judicial Court or Oberster Gerichtshof; Administrative Court or Verwaltungsgerichtshof; Constitutional Court or Verfassungsgerichtshof

Political pressure groups and leadersAustrian Trade Union Federation or OeGB (nominally independent but primarily Social Democratic); Federal Economic Chamber; OeVP-oriented Association of Austrian Industrialists or IV; Roman Catholic Church, including its chief lay organization, Catholic Action
other: three composite leagues of the Austrian People's Party or OeVP representing business, labor, farmers, and other nongovernment organizations in the areas of environment and human rights
International organization participationACCT (observer), ADB (nonregional member), AfDB (nonregional member), Australia Group, BIS, BSEC (observer), CE, CEI, CERN, EAPC, EBRD, EIB, EMU, ESA, EU, FAO, G-9, IADB, IAEA, IBRD, ICAO, ICC, ICCt, ICRM, IDA, IEA, IFAD, IFC, IFRCS, ILO, IMF, IMO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC, MIGA, MINURCAT, MINURSO, NEA, NSG, OAS (observer), OECD, OIF (observer), OPCW, OSCE, Paris Club, PCA, PFP, Schengen Convention, SECI (observer), UN, UN Security Council (temporary), UNCTAD, UNDOF, UNESCO, UNFICYP, UNHCR, UNIDO, UNTSO, UNWTO, UPU, WCL, WCO, WEU (observer), WFTU, WHO, WIPO, WMO, WTO, ZC
Flag descriptionthree equal horizontal bands of red (top), white, and red; the flag design is certainly one of the oldest - if not the oldest - national banners in the world; according to tradition, following a fierce battle in the Third Crusade, Duke Leopold V of Austria's white tunic became completely blood-spattered; upon removal of his wide belt or sash, a white band was revealed; the red-white-red color combination was subsequently adopted as his banner

Economy - overviewAustria, with its well-developed market economy and high standard of living, is closely tied to other EU economies, especially Germany's. Its economy features a large service sector, a sound industrial sector, and a small, but highly developed agricultural sector. Following several years of solid foreign demand for Austrian exports and record employment growth, the global economic downturn in 2008 led to a recession that is likely to persist through 2009. The government's stabilization measures could increase the budget deficit to about 2.8% of GDP in 2009 and above 3% in 2010, from about 0.6% in 2008. The Austrian economy has benefited greatly in the past from strong commercial relations, especially in the banking and insurance sectors, with central, eastern, and southeastern Europe, but these sectors have been vulnerable to recent international financial instabilities, and some of Austria's largest banks have required government support. Even after the global economic outlook improves, Austria will need to continue restructuring, emphasizing knowledge-based sectors of the economy, and encouraging greater labor flexibility and greater labor participation to offset its aging population and exceedingly low fertility rate.
GDP (purchasing power parity)$331.2 billion (2008 est.)
$324.7 billion (2007 est.)
$313.7 billion (2006 est.)
note: data are in 2008 US dollars
GDP (official exchange rate)$414.8 billion (2008 est.)
GDP - real growth rate(%)2% (2008 est.)
3.5% (2007 est.)
3.5% (2006 est.)
GDP - per capita (PPP)$40,400 (2008 est.)
$39,600 (2007 est.)
$38,300 (2006 est.)
note: data are in 2008 US dollars
GDP - composition by sector(%)agriculture: 1.9%
industry: 30.7%
services: 67.4% (2008 est.)
Labor force3.633 million (2008 est.)

Labor force - by occupation(%)agriculture: 5.5%
industry: 27.5%
services: 67% (2005 est.)
Unemployment rate(%)3.9% (2008 est.)
4.4% (2007 est.)
Population below poverty line(%)5.9% (2004)
Household income or consumption by percentage share(%)lowest 10%: 3.3%
highest 10%: 22.5% (2004)
Distribution of family income - Gini index26 (2007)
31 (1995)
Investment (gross fixed)(% of GDP)22.4% of GDP (2008 est.)
Budgetrevenues: $196.4 billion
expenditures: $200.7 billion (2008 est.)
Inflation rate (consumer prices)(%)3.2% (2008 est.)
2.2% (2007 est.)

Stock of domestic credit$606.2 billion (31 December 2008)
$504.8 billion (31 December 2007)
Market value of publicly traded shares$NA (31 December 2008)
$228.7 billion (31 December 2007)
$191.3 billion (31 December 2006)
Public debt(% of GDP)62.6% of GDP (2008 est.)
64.2% of GDP (2004 est.)
Agriculture - productsgrains, potatoes, sugar beets, wine, fruit; dairy products, cattle, pigs, poultry; lumber
Industriesconstruction, machinery, vehicles and parts, food, metals, chemicals, lumber and wood processing, paper and paperboard, communications equipment, tourism

Industrial production growth rate(%)2.4% (2008 est.)

Current account balance$14.27 billion (2008 est.)
$12.03 billion (2007 est.)
Exports$179.1 billion (2008 est.)
$162.1 billion (2007 est.)

Exports - commodities(%)machinery and equipment, motor vehicles and parts, paper and paperboard, metal goods, chemicals, iron and steel, textiles, foodstuffs
Exports - partners(%)Germany 29.5%, Italy 8.6%, US 4.3%, Switzerland 4.2% (2008)
Imports$179.2 billion (2008 est.)
$160.3 billion (2007 est.)

Imports - commodities(%)machinery and equipment, motor vehicles, chemicals, metal goods, oil and oil products; foodstuffs
Imports - partners(%)Germany 44.5%, Italy 7.1%, Switzerland 5.2%, Netherlands 4.1% (2008)

Reserves of foreign exchange and gold$16.7 billion (31 December 2008 est.)
$18.22 billion (31 December 2007 est.)
Debt - external$832.8 billion (31 December 2008)
$801.4 billion (31 December 2007)

Stock of direct foreign investment - at home$261.9 billion (31 December 2008 est.)
$247.9 billion (31 December 2007 est.)
Stock of direct foreign investment - abroad$270 billion (31 December 2008 est.)
$240.9 billion (31 December 2007 est.)
Exchange rateseuros (EUR) per US dollar - 0.6827 (2008 est.), 0.7345 (2007), 0.7964 (2006), 0.8041 (2005), 0.8054 (2004)

Currency (code)euro (EUR)

Telephones - main lines in use3.285 million (2008)
Telephones - mobile cellular10.816 million (2008)
Telephone systemgeneral assessment: highly developed and efficient
domestic: fixed-line subscribership has been in decline since the mid-1990s with mobile-cellular subscribership eclipsing it by the late 1990s; the fiber-optic net is very extensive; all telephone applications and Internet services are available
international: country code - 43; satellite earth stations - 15; in addition, there are about 600 VSATs (very small aperture terminals) (2007)
Internet country code.at
Internet users5.937 million (2008)
Airports55 (2009)
Pipelines(km)gas 2,721 km; oil 663 km; refined products 157 km (2008)
Roadways(km)total: 107,262 km
paved: 107,262 km (includes 1,677 km of expressways) (2006)

Ports and terminalsEnns, Krems, Linz, Vienna
Military branchesLand Forces (KdoLdSK), Air Forces (KdoLuSK)
Military service age and obligation(years of age)18-35 years of age for compulsory military service; 16 years of age for male or female voluntary service; service obligation 6 months of training, followed by an 8-year reserve obligation; conscripts cannot be deployed in military operations outside Austria (2009)
Manpower available for military servicemales age 16-49: 1,986,411
females age 16-49: 1,944,834 (2008 est.)
Manpower fit for military servicemales age 16-49: 1,607,456
females age 16-49: 1,576,335 (2009 est.)
Manpower reaching militarily significant age annuallymale: 50,540
female: 48,042 (2009 est.)
Military expenditures(% of GDP)0.9% of GDP (2005 est.)
Disputes - internationalwhile threats of international legal action never materialized in 2007, 915,220 Austrians, with the support of the newly elected Freedom Party, signed a petition in January 2008, demanding that Austria block the Czech Republic's accession to the EU unless Prague closed its nuclear power plant in Temelin, bordering Austria

Electricity - production(kWh)58.64 billion kWh (2007 est.)
Electricity - production by source(%)fossil fuel: 29.3%
hydro: 67.2%
nuclear: 0%
other: 3.5% (2001)
Electricity - consumption(kWh)61.89 billion kWh (2007 est.)
Electricity - exports(kWh)14.93 billion kWh (2008 est.)
Electricity - imports(kWh)19.8 billion kWh (2008 est.)
Oil - production(bbl/day)24,850 bbl/day (2008 est.)
Oil - consumption(bbl/day)285,400 bbl/day (2008 est.)
Oil - exports(bbl/day)45,580 bbl/day (2008 est.)
Oil - imports(bbl/day)305,000 bbl/day (2008 est.)
Economic aid - donorODA, $1.498 billion (2006)

Oil - proved reserves(bbl)50 million bbl (1 January 2009 est.)
Natural gas - production(cu m)1.532 billion cu m (2008 est.)
Natural gas - consumption(cu m)8.65 billion cu m (2008 est.)
Natural gas - exports(cu m)2.788 billion cu m (2008)
Natural gas - proved reserves(cu m)16.14 billion cu m (1 January 2009 est.)
HIV/AIDS - adult prevalence rate(%)0.2% (2007 est.)
HIV/AIDS - people living with HIV/AIDS9,800 (2007 est.)
HIV/AIDS - deathsfewer than 100 (2003 est.)
Literacy(%)definition: age 15 and over can read and write
total population: 98%
male: NA
female: NA

School life expectancy (primary to tertiary education)(years)total: 15 years
male: 15 years
female: 16 years (2006)
Education expenditures(% of GDP)5.4% of GDP (2005)








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