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Austria-Historical Background ECONOMIC GROWTH AND GOVERNMENT POLICY





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Austria Index

After World War I and the breakup of Austria-Hungary (also seen as the Austro-Hungarian Empire), Austria faced serious problems of economic and social adjustment in finding a means of livelihood for its 6.5 million people, one-third of whom lived in Vienna. Without an adequate agricultural and mineral base in the territory left to it and with the old trading relations of the relatively self-sufficient empire and customs union broken, Austria found itself without adequate food supplies for its population and without sufficient coal for its industry. At the same time, its industrial capacity was excessive for the reduced home market. Relief credits grudgingly given by the Allies kept the country from complete chaos for a time, but devastating inflation in the early 1920s brought it close to economic collapse. Finally, in 1922, a League of Nations commission agreed on a program of international financial support that brought currency stabilization and a balanced budget.

Under the austerity program that ensued, considerable progress was made toward economic reconstruction. Because of the austerity, however, it was also a period of high unemployment and political and social unrest (see The First Republic , ch. 1). When the worldwide depression that began in 1929 put an end to this brief period of economic progress, Austria was ripe for the disorders of the 1930s and for the annexation (Anschluss) by Germany in 1938 (see The Anschluss and World War II , ch. 1). This takeover brought an unanticipated measure of economic recovery to Austria as a result of the German buildup of war potential. In order to serve Nazi goals of conquest, most of the existing Austrian industries were expanded and modernized, and several new industrial complexes were established.

Austria emerged from World War II with its economy shattered. The loss of life and the damage to industry and transportation had decreased production to only one-third of its prewar level. Reestablishment of the economy was both hampered and helped by the division of Austria into four Allied occupation zones after the war and by the ensuing ten-year period of foreign occupation. The presence of foreign troops encouraged the Austrian people into a more cooperative attitude toward each other and toward their leaders than that which had prevailed in the interwar period. As a result, the uncompromising divisiveness that had dominated Austrian economic, social, and political life between the wars gave way to a spirit of cooperation that extended well after the occupation ended (see Restored Independence under Allied Occupation , ch. 1).

During the occupation, the primary objective of the Soviet Union seemed to have been the exploitation of the Austrian economy. Although the Western Allies had successfully prevented the exaction of outright reparations from Austria, they agreed to give the Soviet Union "full and unqualified title" to all German assets in eastern Austria, that is, the part of Austria under Soviet occupation. Soviet leaders put the broadest possible interpretation on the term German assets and dismantled and removed to the Soviet Union much of the movable industrial equipment. Fixed installations were formally confiscated and put into production to serve Soviet interests. When the occupation ended with the signing of the State Treaty in May 1955, the Soviet Union had under its control some 450 firms with 50,000 employees--some 10 percent of the Austrian industrial labor force. Under the terms of the treaty, Austria agreed to make reparation payments to the Soviet Union in oil, other goods, and cash to compensate for the return of these Soviet-controlled assets. The payments, which were completed in 1963, totaled S7.1 billion (for value of the schilling--see Glossary).

The Western Allies, in contrast, invested considerable effort, money, and material under United States leadership in reconstructing the Austrian economy. The initial effort consisted primarily of relief goods channeled through the United Nations Relief and Rehabilitation Administration (UNRRA). This program, involving over US$300 million from the United States alone, was replaced in 1948 by the European Recovery Program (commonly known as the Marshall Plan). Under the plan, the United States provided US$962 million in aid in the form of consumer goods, raw materials, and capital equipment. The total amount of foreign aid received by Austria between 1945 and early 1955 was US$1.6 billion.

The contrasting policies of the Soviet Union in the eastern zone and those of the Western Allies in the rest of Austria had significant implications for the future of the Austrian economy. In the first place, most United States aid went for economic reconstruction in the Allied occupation zones, rather than in the Soviet areas, to prevent its suffering the fate of capital assets already in Soviet hands. This meant, in turn, the creation of employment opportunities in western Austria that, together with the more relaxed living conditions and political freedoms, stimulated a steady movement of the population westward from Soviet-occupied eastern Austria. Thus, the industrialization of the Austrian hinterland, which had started for military purposes during the Nazi occupation, was further advanced. Finally, the more constructive behavior of the Western Allies encouraged cooperation with Austria's coalition government and created an atmosphere of continuing cooperation, virtually guaranteeing a Western orientation for Austria's economic policies after the occupation.

Within the limited scope of economic matters left for Austrian determination during the occupation, two major developments carried over into the postoccupation period and had significant influence on the future course of the economy. The first was the nationalization of a large segment of Austria's heavy industry. The second was the establishment of a mechanism for coping with inflationary pressures through joint agreements on wages and prices reached by the representatives of business, agriculture, and labor.

The nationalization acts of July 26, 1946, and March 26, 1947, were designed to effect the systematic reconstruction of the basic materials industries after the heavy damages suffered during the war, to channel their output and services toward the reconstruction of other elements of the Austrian economy under impartial government direction, and to maintain some degree of Austrian control over these assets during the occupation. Although the Soviet Union objected to the nationalization laws insofar as they applied to former German properties, the other Allies were able to override Soviet efforts to block these laws. The Soviet Union did prevent their application in the Soviet Zone. As a result, about half the enterprises there, including the entire petroleum industry, were kept from Austrian control until after the occupation ended.

About seventy industrial enterprises and plants were selected for nationalization. The enterprises and plants included the most important lignite mines, the largest iron and steel works, the nonferrous metals mining and smelting works, the most important petroleum extraction and processing installations; a number of firms involved in steel construction and in mechanical engineering, a major chemical concern, and a major shipping company. Outside the manufacturing sector, the three largest credit institutions and the most important electrical energy installations were also nationalized.

The problem of compensation to the former owners, which had been left undetermined by the original legislation, was covered by laws passed in 1954 and 1959. Under this legislation, compensation was largely covered by issuing federal bonds to the former owners. These bonds, together with the small cash sums paid out, amounted to about S515 million.

The second economic event of fundamental importance was establishing mechanisms to settle wage-price disputes. The initial wage-price agreements were stimulated by unusual inflationary pressures in 1947, which had increased prices nearly threefold since the end of the war. Possibly with the specter of the inflationary period of the early 1920s in mind, four key interest groups--the chambers of commerce, agriculture, and labor and the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund--ÖGB)--joined forces. They established the Economic Commission, negotiated a schedule of fixed prices for essential goods and services, and adjusted wages and pensions to that schedule. Although the Economic Commission had no legal standing and compliance was voluntary, the first of these agreements, covering the period from August through October 1947, was sufficiently successful to lead to a series of renewals over the next four years. These agreements slowed, but did not stop, the rate of inflation, which averaged 35 percent annually until 1951. Additional stabilization measures were necessary that year, including credit restrictions, an increase in the bank rate, and such fiscal measures as cuts in government spending and increases in taxes. Most important, however, these measures were accompanied by voluntary price reductions and a postponement of wage demands arrived at through the wage-price agreement procedure. This brought a degree of price stability, in marked contrast to the inflationary explosion of the comparable period after World War I.

At the time of the signing of the State Treaty in May 1955, the economy had largely recovered from the effects World War II. The gross domestic product (GDP--see Glossary), in constant prices, had more than doubled since 1946, the first full year of peace, and was 47 percent above that of 1937, the last full year of Austrian independence. Although industrial facilities in the Soviet Zone that had been returned to Austrian control were in poor condition--particularly the oil fields--most of the industrial structure in the Allied occupation zones had been revived and modernized, largely through the application of Marshall Plan funds. Relative price stability had been achieved, and the 1955 unemployment rate of 5.8 percent, although high by subsequent standards, was at least an improvement over the 1953 rate of 8.8 percent and was tending downward. Finally, Austrian independence arrived at a time of growing European prosperity as the full effects of the Marshall Plan were being felt. Thus, Austria was able to take its place in the economy of Western Europe and to share in the prosperity that characterized the postwar period.

Data as of December 1993

[JPEG]

Vineyard at Retz in the province of Upper Austria
Courtesy Embassy of Austria, Washington

Historical Background

After World War I and the breakup of Austria-Hungary (also seen as the Austro-Hungarian Empire), Austria faced serious problems of economic and social adjustment in finding a means of livelihood for its 6.5 million people, one-third of whom lived in Vienna. Without an adequate agricultural and mineral base in the territory left to it and with the old trading relations of the relatively self-sufficient empire and customs union broken, Austria found itself without adequate food supplies for its population and without sufficient coal for its industry. At the same time, its industrial capacity was excessive for the reduced home market. Relief credits grudgingly given by the Allies kept the country from complete chaos for a time, but devastating inflation in the early 1920s brought it close to economic collapse. Finally, in 1922, a League of Nations commission agreed on a program of international financial support that brought currency stabilization and a balanced budget.

Under the austerity program that ensued, considerable progress was made toward economic reconstruction. Because of the austerity, however, it was also a period of high unemployment and political and social unrest (see The First Republic , ch. 1). When the worldwide depression that began in 1929 put an end to this brief period of economic progress, Austria was ripe for the disorders of the 1930s and for the annexation (Anschluss) by Germany in 1938 (see The Anschluss and World War II , ch. 1). This takeover brought an unanticipated measure of economic recovery to Austria as a result of the German buildup of war potential. In order to serve Nazi goals of conquest, most of the existing Austrian industries were expanded and modernized, and several new industrial complexes were established.

Austria emerged from World War II with its economy shattered. The loss of life and the damage to industry and transportation had decreased production to only one-third of its prewar level. Reestablishment of the economy was both hampered and helped by the division of Austria into four Allied occupation zones after the war and by the ensuing ten-year period of foreign occupation. The presence of foreign troops encouraged the Austrian people into a more cooperative attitude toward each other and toward their leaders than that which had prevailed in the interwar period. As a result, the uncompromising divisiveness that had dominated Austrian economic, social, and political life between the wars gave way to a spirit of cooperation that extended well after the occupation ended (see Restored Independence under Allied Occupation , ch. 1).

During the occupation, the primary objective of the Soviet Union seemed to have been the exploitation of the Austrian economy. Although the Western Allies had successfully prevented the exaction of outright reparations from Austria, they agreed to give the Soviet Union "full and unqualified title" to all German assets in eastern Austria, that is, the part of Austria under Soviet occupation. Soviet leaders put the broadest possible interpretation on the term German assets and dismantled and removed to the Soviet Union much of the movable industrial equipment. Fixed installations were formally confiscated and put into production to serve Soviet interests. When the occupation ended with the signing of the State Treaty in May 1955, the Soviet Union had under its control some 450 firms with 50,000 employees--some 10 percent of the Austrian industrial labor force. Under the terms of the treaty, Austria agreed to make reparation payments to the Soviet Union in oil, other goods, and cash to compensate for the return of these Soviet-controlled assets. The payments, which were completed in 1963, totaled S7.1 billion (for value of the schilling--see Glossary).

The Western Allies, in contrast, invested considerable effort, money, and material under United States leadership in reconstructing the Austrian economy. The initial effort consisted primarily of relief goods channeled through the United Nations Relief and Rehabilitation Administration (UNRRA). This program, involving over US$300 million from the United States alone, was replaced in 1948 by the European Recovery Program (commonly known as the Marshall Plan). Under the plan, the United States provided US$962 million in aid in the form of consumer goods, raw materials, and capital equipment. The total amount of foreign aid received by Austria between 1945 and early 1955 was US$1.6 billion.

The contrasting policies of the Soviet Union in the eastern zone and those of the Western Allies in the rest of Austria had significant implications for the future of the Austrian economy. In the first place, most United States aid went for economic reconstruction in the Allied occupation zones, rather than in the Soviet areas, to prevent its suffering the fate of capital assets already in Soviet hands. This meant, in turn, the creation of employment opportunities in western Austria that, together with the more relaxed living conditions and political freedoms, stimulated a steady movement of the population westward from Soviet-occupied eastern Austria. Thus, the industrialization of the Austrian hinterland, which had started for military purposes during the Nazi occupation, was further advanced. Finally, the more constructive behavior of the Western Allies encouraged cooperation with Austria's coalition government and created an atmosphere of continuing cooperation, virtually guaranteeing a Western orientation for Austria's economic policies after the occupation.

Within the limited scope of economic matters left for Austrian determination during the occupation, two major developments carried over into the postoccupation period and had significant influence on the future course of the economy. The first was the nationalization of a large segment of Austria's heavy industry. The second was the establishment of a mechanism for coping with inflationary pressures through joint agreements on wages and prices reached by the representatives of business, agriculture, and labor.

The nationalization acts of July 26, 1946, and March 26, 1947, were designed to effect the systematic reconstruction of the basic materials industries after the heavy damages suffered during the war, to channel their output and services toward the reconstruction of other elements of the Austrian economy under impartial government direction, and to maintain some degree of Austrian control over these assets during the occupation. Although the Soviet Union objected to the nationalization laws insofar as they applied to former German properties, the other Allies were able to override Soviet efforts to block these laws. The Soviet Union did prevent their application in the Soviet Zone. As a result, about half the enterprises there, including the entire petroleum industry, were kept from Austrian control until after the occupation ended.

About seventy industrial enterprises and plants were selected for nationalization. The enterprises and plants included the most important lignite mines, the largest iron and steel works, the nonferrous metals mining and smelting works, the most important petroleum extraction and processing installations; a number of firms involved in steel construction and in mechanical engineering, a major chemical concern, and a major shipping company. Outside the manufacturing sector, the three largest credit institutions and the most important electrical energy installations were also nationalized.

The problem of compensation to the former owners, which had been left undetermined by the original legislation, was covered by laws passed in 1954 and 1959. Under this legislation, compensation was largely covered by issuing federal bonds to the former owners. These bonds, together with the small cash sums paid out, amounted to about S515 million.

The second economic event of fundamental importance was establishing mechanisms to settle wage-price disputes. The initial wage-price agreements were stimulated by unusual inflationary pressures in 1947, which had increased prices nearly threefold since the end of the war. Possibly with the specter of the inflationary period of the early 1920s in mind, four key interest groups--the chambers of commerce, agriculture, and labor and the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund--ÖGB)--joined forces. They established the Economic Commission, negotiated a schedule of fixed prices for essential goods and services, and adjusted wages and pensions to that schedule. Although the Economic Commission had no legal standing and compliance was voluntary, the first of these agreements, covering the period from August through October 1947, was sufficiently successful to lead to a series of renewals over the next four years. These agreements slowed, but did not stop, the rate of inflation, which averaged 35 percent annually until 1951. Additional stabilization measures were necessary that year, including credit restrictions, an increase in the bank rate, and such fiscal measures as cuts in government spending and increases in taxes. Most important, however, these measures were accompanied by voluntary price reductions and a postponement of wage demands arrived at through the wage-price agreement procedure. This brought a degree of price stability, in marked contrast to the inflationary explosion of the comparable period after World War I.

At the time of the signing of the State Treaty in May 1955, the economy had largely recovered from the effects World War II. The gross domestic product (GDP--see Glossary), in constant prices, had more than doubled since 1946, the first full year of peace, and was 47 percent above that of 1937, the last full year of Austrian independence. Although industrial facilities in the Soviet Zone that had been returned to Austrian control were in poor condition--particularly the oil fields--most of the industrial structure in the Allied occupation zones had been revived and modernized, largely through the application of Marshall Plan funds. Relative price stability had been achieved, and the 1955 unemployment rate of 5.8 percent, although high by subsequent standards, was at least an improvement over the 1953 rate of 8.8 percent and was tending downward. Finally, Austrian independence arrived at a time of growing European prosperity as the full effects of the Marshall Plan were being felt. Thus, Austria was able to take its place in the economy of Western Europe and to share in the prosperity that characterized the postwar period.

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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