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date: 22 September 2017

Austria and the European Union

Summary and Keywords

Austria was occupied at the end of World War II by the four Allies, but in contrast to Germany the four powers left in 1955—the condition being its declaration of permanent neutrality, on which the Soviet Union had insisted.

In the first half of the 1950s, relations with the new-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 more its neutrality, excluding European Economic Community (EEC) membership. Instead, it joined other European countries to create a less integrated economic entity, the European Free Trade Association (EFTA) in 1960.

Not until the mid-1980s did debate about membership in the now European Community (EC) start 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 application 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; the “social partnership,” while losing some of its power, could maintain its influence on Austrian politics. 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 the important “niches” for Austrian EU activities. But the country has no close partners in the EU, because it is not participating in the “Visegrad” cooperation of the other Central European EU members. This difficulty clearly showed during the “sanctions” period of the EU-14 against the new Austrian government in 2000.

Keywords: Austria, European Union, neutrality, European Free Trade Association, European Economic Community, NATO

Introduction

Austria, as we know it today, has existed only since 1918. Before that, it was the mostly German-speaking part of the much larger Habsburg Monarchy. The disintegration of Austria-Hungary at the end of World War I meant also the disappearance of a big common market and a monetary union in Central Europe. The adjustment to these changes proved to be rather difficult for Austria. Whereas the new Czechoslovakia had inherited the industrial core of the old monarchy and Hungary possessed an important agricultural base, little Austria was left with not much more than the bureaucracy and a grand capital for more than 50 million inhabitants, albeit in a state comprising now only about 6 million people.

Economically, Austria had to be bailed out twice under the supervision of the League of Nations, in 1922 and 1932. The bankruptcy of an Austrian bank (the Creditanstalt) in 1931 was the event that triggered the Great Depression of the 1930s (after “Black Friday” on Wall Street had already caused a great recession in 1929).

Politically, the domestic scene was characterized by conflicts between the Catholic-Conservatives (the Christian Socials) and the Social Democrats. Many politicians of these two political “camps” and in particular smaller political groups of “German nationalists” supported unification with Germany (the “Anschluss”). After the Christian Social government defeated the Social Democrats in a short civil war in February 1934, the right established an authoritarian regime, the “Ständestaat” (“Corporatist State”). This regime in turn came under the pressure from the Austrian and German Nazis, who killed the Austrian chancellor (prime minister) in an unsuccessful putsch in July 1934. The struggle for Austria’s independence lasted until March 1938. The appeasement policy of the West and Mussolini’s rapprochement with Hitler in the late 1930s finally left Austria exposed to German pressure; the government succumbed to the invasion of 100,000 German troops without firing a shot. Austria ceased to exist; its territory became part of the German Reich (on the history see, e.g., Berger, 2007). Richard Rodgers and Oscar Hammerstein II provide in The Sound of Music a glimpse of this struggle.

The Reestablishment of an Independent Austria

After Soviet troops had entered Austrian soil in April 1945 and liberated Vienna from Nazi rule, representatives from the political parties of the interwar period declared Austria’s reestablishment. The new Austrian government was ultimately recognized by all four Allied powers that had occupied Austria at the end of World War II; Austria was divided like Germany into four zones. In the general elections of November 1945 the two traditionally dominating parties again received the most votes; the third party, the Communists, was left with only 5%.

The first task of the Austrian government, since 1947 a “Grand Coalition” formed by the conservative “People’s Party” (ÖVP, in the tradition of the Christian Socials) and the “Socialist Party” (since 1991 “Social Democratic Party,” SPÖ), was to improve the country’s economic situation. This was to a large extent facilitated by Austria’s participation in the Marshall Plan of the United States, although its eastern part was occupied by the troops of the totalitarian Soviet regime. Therefore, the second task consisted of attaining full independence from the occupation, in particular getting rid of the Soviets in eastern Austria; there the occupying force hampered economic development and jeopardized the lawful administration by Austrian officials.

After long years of negotiations on the Austrian “State Treaty” (not “Peace Treaty” because Austria did not exist during World War II), a solution was found in 1955. In connection with the first “thaw” of East-West relations, after the death of Stalin, the Soviet Union was ready to pull back its troops from Austria, but only under the condition that Austria as a whole would not join the Western Alliance (NATO). Austria and the Western Allies in the end agreed to a neutral status for the country. In negotiations with the Soviets the Austrians succeeded in defining the status in accordance with the “Swiss model” and not having to accept the kind of “non-alignment” becoming popular in the Third World. In addition, there was to be no neutrality clause in the State Treaty, but Austria’s neutrality status would be based on a unilateral legal act. On May 15, 1955, the State Treaty was signed by the four Allies and Austria. Finally, on October 26, 1955, once the last occupying troops had left the country after 17 years, the Austrian parliament passed the Federal Constitutional Law on “permanent neutrality” (Stourzh, 2005). At the introduction of the bill, it was stressed that Austria’s neutrality was a “military neutrality” that would include “no obligations and commitments whatsoever in the economic or cultural field” (Luif, 1995, p. 129). In contrast to Switzerland, Austria joined the United Nations in December 1955 and became a member of Council of Europe in April 1956.

Austria Joins EFTA

With the Marshall Plan, the Austrian economy was integrated into the West European market economies. But the founding of the European Coal and Steel Community (ECSC) in 1952 put Austria in a dilemma. Among its members were Austria’s two most important trading partners, West Germany and Italy. Before the end of the four power occupation, Austria had to tread carefully in its foreign relations; an attempt to reach special relations with the ECSC was not successful.

In 1956, after the conclusion of the State Treaty, Austrian politicians started to talk about joining the ECSC—which would have most probably also led to participation in the soon-to-be-created European Economic Community (EEC). But the bloody crushing of the Hungarian uprising in October-November 1956 made the officials more cautious. Now Austria, together with Sweden and Switzerland, was engaged in the creation of a free trade area for all of Western Europe. When these endeavors failed, the three neutrals and some NATO members founded the European Free Trade Association (EFTA), with a less binding organizational structure compared to the EEC. The EFTA countries then tried to reach trade agreements with the EEC (Weiß, 2014).

During the same period changes occurred among the ruling Grand Coalition parties. The ÖVP, then the largest party, started in the early 1960s to push for a closer relationship with the EEC. While until the mid-1950s most SPÖ politicians were rather attached to Western Europe and the United States, in the late 1950s leading Socialists started to criticize the newly founded Common Market as a “capitalist” bloc of countries. These attitudes concealed some hidden agendas. Inside the ÖVP, the representatives of small and medium-sized businesses liked the EFTA option, fearing fierce competition by the (larger) companies of the EEC, such as West Germany. But for reform-oriented Conservatives, a close connection to the EEC would “liberalize” society and economy. During the 1950s a “corporatist” state, this time democratic, had developed in Austria, closely connecting the two big parties with the respective economic actors: the ÖVP with the business groups, the SPÖ with the trade unions. The “social partnership” gave the trade unions an influence equal to business in economic affairs and beyond. Any change to this (later rather rigid) system was impossible domestically because of the “equilibrium” prevailing in the Grand Coalition between the Conservatives and the Socialists. Thus, the SPÖ was worried about the weakening of the large nationalized industry and the influence of the trade unions through close links with the EEC (Luif, 1988, pp. 102–103).

Here, “neutrality” emerged to be a useful argument in public discourse. Without the need to delve into these ideological allegations vis-à-vis domestic and international counterparts, politicians always could argue that “neutrality” would forbid a particular action in external affairs. These arguments were supported by the assertions of Austria’s specialists in international law, who began to interpret neutrality in a rather extensive way. According to them, Austria could not join the EEC, even if accession would provide special legal clauses for its status. A permanently neutral country had to abstain from any (future) involvement in wars. Therefore, any far-reaching political and economic dependence on other countries (which membership in or close association with the EEC would entail) would put Austria’s neutral stance in danger and could even affect the Cold War status quo in Europe (Zemanek, 1959).

The attempt of the United Kingdom to join the EEC in 1961 led to the coordinated request for “association” with the EEC by the three neutrals, Austria, Sweden, and Switzerland. De Gaulle’s veto against UK membership in 1963 did not stop Austria, in contrast to the other two neutrals, from continuing to push for special close relations with the EEC. The domestic background was the weakening of the Socialists in the general elections of 1962 and the strengthening of the reformers in the ÖVP; in 1966 the ÖVP gained the absolute majority in Parliament, forming a single-party government. The now even more intense push for a “special agreement” resembling membership with the EEC was in the end not successful. Austria had to terminate this first “Alleingang” (“going-it-alone”) in 1967. At that point, Italy rejected any further talks until the conflict with Austria on South Tyrol’s autonomy had been solved. The Soviet Union continued its intense hostility toward any closer relationship of Austria with the EEC, a fact that led France under de Gaulle to oppose the Austrian request. Finally, there remained difficulties finding any clear-cut solution for a close association. An outsider could not participate in EEC decision making, but taking over all rules without a say would make Austria a “satellite” of the EEC (Luif, 1995, p. 187).

In 1969, a solution for the South Tyrol problem was found between Austria and Italy. But in 1971 the SPÖ gained an absolute majority in Parliament. Relations with the EEC were not the focus of the new government. Under Chancellor Bruno Kreisky (SPÖ), Austria’s foreign policy widened its activities beyond Europe, to the Middle East and the Third World. The catchword was now “active neutrality” for Austria’s international posture. In Europe, the customs borders between the EEC and the EFTA countries were finally removed in 1973, at a time when the United Kingdom and Denmark changed over from EFTA to the EEC, by establishing bilateral free trade areas among the EEC and the remaining EFTA states, excluding agricultural goods. The free trade agreements tied Austria less closely to the EEC than the planned association or special relationship of the 1960s.

The Road to Brussels

The renewed tension in East-West relations and the loss of the absolute majority of the SPÖ in 1983 changed Austria’s external relations. The SPÖ formed a coalition government with the FPÖ, a party that was formed in the mid-1950s by people with German nationalist viewpoints but also with more liberal (in the European sense) attitudes. This party had demanded membership in the EEC during the 1960s. With Bruno Kreisky stepping down, Austria’s foreign policy became less “active.”

Just when integration of the now European Community (EC) became more dynamic (see the Commission White Paper on Completing the Internal Market of June 1985), Austria’s large nationalized industry got into trouble and was close to bankruptcy; the SPÖ-FPÖ government did not have the financial means to bail it out. In the mid-1980s, statistics showed that Austria’s economy grew more slowly than most other countries in Western Europe. With the completion of the internal market, business circles in Austria feared a loss of market share in the Community. The push for EC membership came also from the ÖVP, with which the SPÖ had again established a Grand Coalition government in 1987. The arguments were helped by lawyers who now maintained that Austria could join the EC; in the era of globalization, complete economic autarchy was not possible even for a permanently neutral country. The foreign policy cooperation of the EC states was taking place at an intergovernmental level; decisions in this area would need consensus. Thus a legally feasible arrangement with the EU on membership could be attained (Hummer & Schweitzer, 1987).

The troubles of their economic fiefdoms were probably the last straw leading the Socialists to rethink their firm opposition to EC membership. Finally, in July 1989, Austria’s Grand Coalition under Chancellor Franz Vranitzky (SPÖ) and Foreign Minister Alois Mock (ÖVP) applied for membership in the EC, becoming the first of the EFTA countries to do so and representing Austria’s second “Alleingang.” The application included a clause requesting that Austria maintain its permanent neutrality inside the EC.

Austria thus had asked for membership in the EC before the end of the Cold War (fall of the Berlin Wall in November 1989); the economic problems of Austria were the ultimate reason for this step. With Mikhail Gorbachev as general secretary of the Communist Party of the Soviet Union (CPSU), East-West relations had improved. The reaction of the Soviet Union to Austria’s move was restrained, but it insisted on the maintenance of permanent neutrality. Given that a membership application with a neutrality clause was a novelty, some discussions on this status did take place inside the EC (Luif, 1995, pp. 198–199).

After at first criticizing the Austrians, neutral Sweden (in July 1991) and Finland (in March 1992) followed suit. But the EC was not yet ready for negotiations with Austria and the other applicants. First, the Maastricht Treaty had to be negotiated; it was signed in February 1992. A year later, on February 1, 1993, the formal negotiations on membership in the now European Union (EU) started with Austria and the other applicants. They were simplified by the earlier talks on the European Economic Area in 1992. This Area had allowed the EFTA states to participate in the EU’s internal market, but without involvement in the EU’s decision-making. For the Austrians, with the experience of the negotiations in the second half of the 1960s, being part of an economic entity without the possibility of taking part in its decision-making could only be a temporary move toward full integration.

Transport questions (in particular traffic through Austria’s Alpine regions) and agriculture proved to be the most difficult issues in the membership negotiations. All the applicants had to sign a Joint Declaration on the Common Foreign and Security Policy (CFSP), the EU foreign policy cooperation introduced by the Maastricht Treaty. In it the acceding countries pledged to be “ready and able to participate fully and actively in the Common Foreign and Security Policy” and that the “the legal framework of the acceding countries will be compatible with the ‘acquis’” (Luif, 1995, p. 310). The latter clause was clearly aimed at Austria, because it was the only country that had to make legal adjustments for participating in the CFSP. In due course, Austria amended its federal constitution and introduced a new article (Article 23f, now Article 23j), which has allowed Austria to be fully involved in the CFSP, thus abrogating the constitutional law on permanent neutrality in the context of the EU.

Membership in the EU was supported by the Grand Coalition parties (SPÖ and ÖVP) as well as the small Liberal Forum (which had split from the FPÖ); it was opposed by the FPÖ and the Greens. The FPÖ, formerly a supporter of EC membership, was changed by its new leader, Jörg Haider, into a right-wing populist party with Austrian nationalism at its core. On June 12, 1994, the Austrian public voted in an obligatory referendum with a majority of 66.6% (turnout 82.3%) for membership of Austria in the EU. Public opinion polls showed that above average support for membership came from the higher educated, from men, and from older citizens; significant opposition came from the farmers. Also of importance was the support for EU membership by the Kronen Zeitung, a broadsheet read by more than 40% of Austrians daily (Luif, 1995, p. 324). Austria officially joined the EU, together with Finland and Sweden, on January 1, 1995.

Austria as an EU Member

First Steps

Because the EU had refused special treatment for Austrian agriculture, the Austrians people’s first impression of joining the EU was the reduced prices for agricultural goods, which had to be adjusted to the lower EU level on day one of Austria’s membership. Whipped cream, a staple for Austrian connoisseurs of good food, was now so cheap that it sold out immediately. The farmers, who had to cope with these lower prices, received additional financial support for a transitional period.

In the general elections of October 1994, the Grand Coalition parties lost their two-thirds majority in Parliament, whereas the big loser of the EU referendum, Haider’s FPÖ, gained 6 percentage points. The changes to the Federal Constitution now depended on the support of at least one of the opposition parties. This was the reason that on the basis of the amended constitution, Austria’s Parliament (and also the provinces) could now give “instructions” to the Austrian representatives in the EU Council. The Austrian representative, that is, the competent minister of the federal government, had to adhere to the positions of Parliament during the negotiations and at the voting in the EU Council (Article 23e of the Federal Constitution). But this far-reaching influence of Austria’s Parliament on the government’s behavior in Brussels, in an abstract sense a rather “democratic” arrangement, turned out to be rather cumbersome and not really effective. When forced to follow the standpoint of Parliament, the Austrian minister did not have the necessary flexibility in the negotiations of the Council; sometimes the Austrians obtained an even less favorable Council decision than planned. Therefore, Parliament’s decisions to instruct the ministers have become quite rare (Dossi, 2015). In addition, Austrian governments have almost always been based on absolute majorities in Parliament. So the influence of the legislative bodies on governments has been by far not as great as for example in the Nordic countries.

Right from the start of Austria’s EU membership, the country indicated that it wanted to position itself in the EU core. In contrast to Finland and Sweden, Austria immediately opted for participation in the third phase of the Economic and Monetary Union (EMU) and the Schengen Area (the third “Alleingang”). The implementation of Schengen led to conflicts with Germany, in particular Bavaria. Austria, at that time on the external borders of the EU, was regarded as not effectively controlling these borders. Only step by step, between December 1997 and April 1998, were the borders to the other EU members abolished (Luif, 2007, p. 97). In May 1998, Austria was among the 11 countries regarded as satisfying the Maastricht criteria to join the third phase of the EMU. As did the other EU countries, Austria introduced the euro (and abandoned the schilling) on January 1, 2002 (Gehler, 2009, p. 158).

But to participate in the euro area and to fulfill the Maastricht criteria, the Austrian government had to reduce the public deficit below 3% of GDP by the end of 1997. This turned out to be difficult. The quarrel about these “austerity packages” led to new general elections in December 1995. In the end, the government succeeded in making Austria ready for the euro, but public attitudes toward the EU, which were rather positive considering the results of the EU referendum, made a negative turn (see Figure 2).

Adapting Neutrality to the Common Foreign and Security Policy

In November 1993 the Austrian government, in a meeting of the Cabinet, had interpreted permanent neutrality narrowly and reduced its scope to three Ns: non-participation in wars, no adherence to military alliances, and no stationing of foreign troops on its soil. This was a minimum definition of neutrality, quite a change from the former “active neutrality.” When in the mid-1990s the first “Eastern” enlargement of NATO appeared on the agenda, the ÖVP was becoming more favorably inclined toward Austria’s membership in the Western European Union (WEU, at that time the “military” arm of the EU) and NATO, whereas the SPÖ refused to abandon neutrality. In preparation for Austria’s first EU presidency, the Grand Coalition parties tried to find compromise about Austria’s security policy. But at the end of March 1998 it was clear the two government parties could not agree on the planned Options Report concerning Austria’s external security policy. The ÖVP pushed hard for joining the Atlantic Alliance, seeing a window of opportunity when other countries of Central Europe were about to be accepted as new members. Participation in the Euro-Atlantic Partnership Council would not be sufficient. The SPÖ rejected that argument, seeing no security threats for Austria that would require an abandonment of its established foreign policy status. In its view, the Eastern enlargement of NATO would even enhance Austria’s security situation, because Austria would be surrounded by NATO members (Switzerland and Liechtenstein being the exceptions); as a consequence Austria could even spend less on defense. During the time Austria discussed its status, the Czech Republic, Hungary, and Poland were invited to begin accession talks at the Alliance’s Madrid Summit in 1997. On March 12, 1999 they became the first former members of the Warsaw Pact to join NATO.

The Treaty of Amsterdam (signed in October 1997, in force May 1999), revising the Maastricht Treaty, made the Petersberg Tasks part of the EU’s Common Foreign and Security Policy (CFSP). They include “tasks of combat forces in crisis management, including peace-making,” or military actions to make peace (now Article 43.1 of the EU Treaty). Austria again had to amend its Federal Constitution to allow the country to participate in such actions. The explanation of the government proposal from June 1998 stated that the amendment made it possible for Austria to participate in the Petersberg Tasks even in situations where a mandate by the UN Security Council did not exist (Luif, 2007, p. 230).

The test for Austria’s position came soon. In March 1999, NATO started bombing Serbian forces in Kosovo and Serbia proper without a mandate by the Security Council under Chapter VII of the UN Charter. Therefore, the Austrian government did not allow transit flights of NATO planes across Austrian territory, thus forcing NATO aircraft to make big detours around Austria (and Switzerland). In the EU context, the General Affairs Council (of the foreign ministers) as well as an informal Summit Meeting (of head of states or governments), both in April 1999, declared that in the Kosovo crisis “the use of severest measures, including military action, has been both necessary and warranted.” Austrian officials regarded in the EU context NATO actions in Kosovo as essential, but at the same time the Austrians impeded NATO activity (Luif, 2001).

To solve this conundrum, the new ÖVP/FPÖ government issued in 2001 a “Security and Defense Doctrine” in which it declared Austria “bündnisfrei” (non-aligned as Finland and Sweden). It left the option of NATO membership open but stated that there would have to be a referendum before Austria could join NATO.

Chancellor Wolfgang Schüssel (ÖVP) declared at the same time that neutrality was not adequate for the “complex reality as the 21st century gets under way” (Luif, 2016, p. 86). But in spring 2003, in the context of the Iraq crisis, as the United States invaded the country without a UN Security Council mandate, the ÖVP/FPÖ government “rediscovered” neutrality. U.S. war planes were again not allowed to fly over Austrian territory. Representatives of the ÖVP started to support neutrality when it turned out that Heinz Fischer (SPÖ) had won the presidential elections in 2004 mainly through his support of neutrality. In 2005, the splinter-party of Jörg Haider, the BZÖ, still was somewhat critical of neutrality, whereas the “new” FPÖ under Heinz-Christian Strache strongly began to defend neutrality.

The new Grand Coalition government of SPÖ and ÖVP developed an Austrian Security Strategy between 2011 and 2013. The Strategy twice mentions “neutrality,” both times in connection with Austria’s EU membership: “today, the security of neutral Austria and the EU are to a very large degree intertwined … Austria … is on the constitutional basis of its neutrality member of the EU” (Österreichische Sicherheitsstrategie, 2013, pp. 1, 5 [my translation]). A political scientist has viewed the preservation of neutrality as a “most convenient” position for the political parties, although the functions of neutrality in international relations “tend to approach zero” (Pelinka, 2012, pp. 636–637).

But politicians do not see it this way. For the Austrian chancellor Werner Faymann (SPÖ), neutrality is an “essential part” of Austria’s national character and encloses thus a “national interest by itself” (Faymann, 2015). Foreign Minister Sebastian Kurz (ÖVP) sees neutrality as a “distinguishing feature” or “unique selling point” for Austria and admonishes Austrians not be ashamed of neutrality (Kurz, 2015). The leader of the Green’s parliamentary group, Eva Glawischnig warns the EU that Austria’s neutrality law will show its impact in case the EU should dare to act outside the rules of the UN Charter (Glawischnig, 2015). This is similar to the admonishing by the former SPÖ minister Caspar Einem, who has argued that neutral Austria could participate in a future European army, because that would not be identical to joining a military alliance. On the other hand, should this army start a war without a UN Security Council mandate, Austria would have to use its veto because EU decisions having military implications must be taken unanimously (Einem, 2015).

The problem with Austria’s neutrality is that all its neighboring EU countries are members of NATO. The Lisbon Treaty has put a “mutual defense clause” into the EU Treaty (Article 42.7). But the Treaty adds that this clause “shall not prejudice the specific character of the security and defence policy of certain Member States” (i.e., the neutrals). This could mean that if Austria was “the victim of armed aggression,” Hungary would have “an obligation of aid and assistance by all the means in [its] power” vis-à-vis Austria whereas Austria would not have this obligation toward Hungary. In the Austrian context, most pundits did not take Article 42.7 seriously, because in Central Europe an armed aggression seemed to be rather far-fetched. But Russian hostile rhetoric and actions toward the Baltic States have changed this benign picture. And François Hollande, the French president, even invoked Article 42.7 of the EU Treaty in the context of the terrorist attacks in Paris of November 13, 2015.

What is now the position of Austria in the CFSP? One can take the voting behavior in the General Assembly of the United Nations as an empirical indicator. In the General Assembly, all EU states are members, and each of them has one vote. The EU should “speak with one” voice in international organizations (“Member States shall coordinate their action in international organisations” [Article 34.1 EU Treaty]), but coordination does not always lead to the same voting behavior. The more identical votes in an issue area, the more the EU will be able to act in this field, because CFSP decisions have to be made by consensus.

One can also use the voting data to look at the voting behavior of single EU members by calculating their distance from the “mainstream” of the EU. Even if there is no identical vote of the EU states, most of the time the voting behavior of the majority can be discerned—and that can be defined as the EU “mainstream.” The calculation of the “distance” from this majority or mainstream displays then the position of a single EU state: is it close to the mainstream (does it vote most of the time with the majority) or does the state have positions that show a smaller or bigger gap from the EU majority? Figure 1 presents the distance of Austria (of the Austrian voting behavior in the UN General Assembly) from the EU mainstream over time. A distance index of “0” means that Austria always voted with the EU majority; an index of “100” indicates that Austria always voted differently from the EU mainstream. One can see clearly the adjustment Austria made in its voting behavior after it had applied for EU membership in 1989—even before it became an EU member. Since the late 1990s, Austria displays only a small distance from the EU mainstream. But it is still a bit further away than Germany. Figure 1 shows clearly the enduring distance France and the United Kingdom have from the EU mainstream, despite the end of the Cold War and the introduction of the CFSP with the Maastricht Treaty.

Austria and the European UnionClick to view larger

Figure 1. The distance from the EU majority: Voting behavior in the General Assembly of the United Nations. (Maximum Distance = 100, Minimum Distance = 0).

Notes: For a detailed explanation see Luif (2003); ⃰ = no data for Greece 1996 (diplomats on strike), ⃰ ⃰ = data missing for January–September 2002.

In spite of its neutrality, Austria has actively participated in EU military missions in the context of the CFSP. Austria’s participation has been made easier by the fact that on the one hand these are small, more peacekeeping than peacemaking operations and on the other hand the missions always had the backing of a UN Security Council mandate. An early mission was Operation ARTEMIS in the Democratic Republic of Congo, where Austria participated with a few troops. A larger number of Austrian soldiers (160) were active in the EUFOR mission in Chad/Central African Republic in 2008–2009. But the most important military activities of Austria in the EU context have taken place in the Balkans. For historical and geographical reasons, Austria is here one of the most important actors among the EU states; it is clearly a niche for Austria’s CFSP activities. In Bosnia, Austria provides some 330 soldiers for the EUFOR ALTHEA mission, the largest contingent of a total of 800 troops, and its commander is an Austrian officer (Jandl, 2015).

Austria as an EU Member: Key Issues

Each EU member state has to find ways to represent its interests in Brussels and to coordinate its EU positions. Austria has developed a few special features in this regard. Austria’s permanent representation to the EU includes not only diplomats and representatives from all Austrian ministries, but also a representative of the provinces (Länder) and delegates from the social partners. This latter fact is an indicator that social partnership still maintains some influence in decision-making, as well as in relations with the EU (Tálos, 2015). In addition, the provinces (except Vorarlberg) have their own representation in Brussels.

The domestic coordination of Austria’s position in EU institutions is primarily handled by the Foreign Ministry (Federal Ministry for Europe, Integration and Foreign Affairs) and not by the Prime Minister’s Office, as in many other countries. In December 2013, Sebastian Kurz became foreign minister; before that he was secretary of state for integration (of migrants, non-nationals) in the Ministry of the Interior. With his background of dealing with migrants, he became rather critical of the EU migration policy in 2015.

Because Austria has one of the highest per capita incomes in the EU, it is not a surprise that it has been a net payer into the EU budget. According to data from the EU Commission, Austria has essentially paid each year more towards the EU’s budget than its share of receipts from the budget: in 2013 this amounted to 0.40% of its Gross National Income (GNI). In the same year Sweden made a net contribution of 0.51% and Finland 0.31% GNI (EU Information Centre, 2016).

Austria took over its first EU presidency in the second half of 1998, the earliest among the three EU newcomers of 1995 (Schallenberg & Thun-Hohenstein, 1999). A presidency, which involves organizing and heading all meetings of the (European) Councils and all the working groups of the Council, has been quite a challenge for small or medium-sized countries. In Austria all ministries, but in particular the Chancellery and the Foreign Ministry, had to bear the brunt. In general, Austrian representatives acted cautiously; they did not push the Agenda 2000 (dealing with enlargement) as forcefully as expected and were criticized for risk avoidance. Austria did, however, start substantial negotiations with the first group of candidate countries in Central Europe (and Cyprus). A rather unexpected achievement was the informal meeting of the heads of state and government in Pörtschach, in October 1998, where British prime minister Tony Blair announced the British support of a European defense capability. Austria’s defense minister, Werner Fasslabend, invited his colleagues to a first informal meeting of EU defense ministers in November 1998, in view of the inclusion of the Petersberg Tasks into the EU Treaty (Luif, 2007, p. 107). It was a bit of a paradox that under the aegis of a neutral country, EU military cooperation got a new momentum. In the main, Austria’s first EU presidency brought a long-needed modernization of its bureaucracy; all officials in the ministries gained access to computers, and the younger officials who dealt with the EU got promoted.

After the general elections of October 1999, the negotiations between the SPÖ and ÖVP could not bring about another Grand Coalition government. Instead, in January 2000, the ÖVP and FPÖ quickly got together and formed a government. Even before it was officially inaugurated, the Portuguese EU presidency put the following statement on its presidency home page:

  • Governments of XIV Member States will not promote or accept any bilateral official contacts at political level with an Austrian Government integrating the FPÖ;

  • There will be no support in favor of Austrian candidates seeking positions in international organizations;

  • Austrian Ambassadors in EU capitals will only be received at a technical level (Bantekas, 2000).

These measures should have prevented the formation of a government with the FPÖ, which was regarded by left-wing politicians, but also by, for example, President Jacques Chirac of France, as a dangerous, right-wing populist party. They were implemented after the ÖVP-FPÖ government was installed on February 3, 2000; because there was no legal base in the EU treaties, they were formally only “bilateral” measures of the other 14 EU states vis-à-vis Austria. But the “sanctions,” as they were soon called, did not affect only the government; even private citizens suffered under discriminatory behavior. The Belgian foreign minister, Louis Michel, found skiing in Austria to be an “immoral” act: “Je recommande aux Belges de ne pas aller skier en Autriche. Je pense que ce n’est pas moral.” This reminded some Austrians of the “Tausend-Mark-Sperre,” when in 1933 Hitlerite Germany introduced a tax for all Germans who wanted to go on vacation to Austria—aiming to ruin the at that time already rather important Austrian tourist industry. Soon it turned out that the “sanctions” actually had the opposite effect: it strengthened the ÖVP-FPÖ government. To get rid of the measures was rather complicated. Finally, a group of three wise men was charged with an evaluation of the Austrian government—and gave it a “clean bill of health on human rights” (Financial Times, 2000). The French presidency had to announce the end of the “measures” without any further conditions (Luif, 2007). After this dreadful experience, the EU Treaty was changed to create a well-ordered procedure in case an EU member state would not adhere to the values of the EU. The Austrian incident has made the EU states rather reluctant to apply these rules.

During the second EU presidency of Austria (first half of 2006), the EU experienced difficulties after the rejection of the Constitutional Treaty by referendums in France and the Netherlands (Woschnagg, Mück, & Payrleitner, 2007). Quite a number of negative external factors influenced the presidency as well. At the beginning of the presidency, Russia’s natural gas giant, Gazprom, cut the natural gas supplies to Ukraine, first by 30%, then by 50%; this also endangered the gas supply for a number of EU states, because Ukraine had been the most important transit country for Russian gas. The relations with Iran concerning its nuclear program deteriorated and radical Hamas won elections in the Palestine territories. After cartoons of the Prophet Mohammed were published in a Danish newspaper, Muslims all over the world took to the streets. Even the Austrian Embassy in Tehran was firebombed on February 6, 2006. The Austrian presidency displayed a “wait-and-see” attitude; in Denmark this lack of support for Danish interests was criticized (Luif, 2006).

An accomplishment of the Austrian presidency was the confirmation in the final statement of the informal meeting of foreign ministers (the Salzburg Declaration, March 2006) “that the future of the western Balkans lies in the European Union,” although France wanted to avoid any explicit promise on EU membership for these countries. Another success of Austria’s presidency was the passing of the Services Directive, which opened the EU market for services, although not as much as was hoped for, in particular by the Central Europeans (Luif, 2006).

Since the general elections of October 2006, Austria has been ruled again by a “Grand” Coalition, albeit in a much reduced form. In the general elections of September 2013, both parties, the SPÖ with 26.8% and the ÖVP with 24.0% together barely crossed the 50% mark.

Austria as an EU Member: Contested Topics

In Austria, one area of great importance in domestic politics is environmental policy. For Austria’s tourist industry an unspoiled nature has been of great value. One aspect of it is agriculture, which to a large extent is regulated by the EU. The first commissioner nominated by Austria was Franz Fischler, who as former minister for agriculture got this dossier and worked for 10 years as commissioner for agriculture in Brussels (1995–2004). He emphasized organic farming in his policies and gave it additional monetary support, thus helping Austria, which has the largest share of organic farms in the EU.

Another environmental issue for Austria has been transit traffic, in particular the heavy truck traffic through the Alps. A Transit Traffic Agreement with the EU from 1992 alleviated at least part of the Austrian grievances. When Austria joined the EU the duration of the agreement was limited until the end of 2003. Such an agreement was actually regarded inside the EU as a hindrance to the free flow of traffic. The Austrians expected that by that date the EU would itself have become more responsive to the problems of road traffic and would allow the restrictive Austrian measures to be extended indefinitely. But this was not the case. Lengthy negotiations brought only negative surprises for the Austrians, for example, the European Parliament voting against strict measures for heavy truck traffic and the German Greens not supporting Austria. The compromise arrived at in late 2003 was regarded as completely useless by Austria because it did not stop any trucks wanting to cross Austria. Austria was simply outvoted in the Council and in the European Parliament. The compromise was never implemented by Austria (Luif, 2006).

One important issue for Austria was EU enlargement, which also had environmental aspects. In theory, the enlargement of the EU toward the countries of Central and Eastern Europe (CEE) was significant for Austria, given that it included four neighboring countries. But there were political currents opposing rapid enlargement. The FPÖ was rather critical about the accession of the Czech Republic, because the Czechs refused to abolish the so-called Beneš Decrees, which condoned the atrocities of the Czechs against German-speaking population after World War II. The ÖVP-FPÖ government also came under pressure from citizen action groups demanding the closure of the “dangerous” nuclear power plants in the acceding states, again in particular in the Czech Republic. The trade unions wanted long transitional periods for the open access to the Austrian labor market, fearing the competition from the citizens of neighboring countries who earned much lower wages. It was not only labor migration itself, but the daily or weekly commuting of workers that was regarded as problematic. Vienna and Bratislava are the closest capitals in Europe; residing in Bratislava with a lower cost of living and working in Vienna with much higher wages seemed to be attractive. Finally, Austria (and also Germany) got a transitional period of seven years before fully opening the labor market. Despite these political controversies, the Austrian Parliament ratified the enlargement treaties with large majorities in December 2003.

In Austria, any student who graduated from high school or upper secondary school could go to any Austrian university and study the subject of his or her choosing without an entrance exam, with obvious exceptions like sports or music. In addition, there are no tuitions to be paid for public universities (which most larger universities are). Students from other EU countries were accepted only if they could prove that they were entitled to study the particular subject in their home country. This helped to deny German students access to Austrian universities when the “numerus clausus” did not allow them to study, for example, medicine in Germany. On July 7, 2005, the European Court of Justice decided that students from other EU countries have the same right to study in Austria as Austrian students. Immediately, thousands of German students registered at Austrian universities because there was no language barrier. Austria had to introduce limits for foreign students (also in the guise of entrance exams) for several university studies like human medicine and veterinary medicine. Still, the European Commission has not been happy with these “discriminatory” measures (Obwexer, 2015).

One rather sensitive issue for the Austrian government has been the EU’s relations with Turkey. The FPÖ strongly opposed the start of membership negotiations with Turkey, and Turkish EU membership is supported only by a small minority of Austrians. Austria came under strong pressure by other EU countries, but seemingly also by the United States, to agree at the Council on October 3, 2005, to the opening membership negotiations with Turkey (Luif, 2006). Austria wanted the concerns of its population (and the populations of other EU countries) to be clearly expressed in the framework of the negotiations. In spite of strong opposition it succeeded in getting a reference to the absorption capacity of the EU and to a fair financial burden sharing among EU member states at the Council meeting. At the same meeting, the start of accession negotiations with Croatia, for which Austria had forcefully lobbied, was decided as well (Gehler, 2009, pp. 194–195).

Austria fought a long time inside the EU for the maintenance of its banking secrecy. But in 2014 it finally succumbed to the combined pressure of the other EU countries and the United States. Luxembourg and Austria, the last countries to do so, accepted in March 2014 the adoption of an EU directive that allows it to control all kinds of tax evasions by EU citizens with the help of Austrian banks (Trauner, 2014). In 2015, Austria abolished most of the remaining banking secrecy for Austrian nationals as well (Die Presse, 2015).

In the Greek debt drama, starting in 2010, Austria acted similarly to Germany in supporting the various bailouts of this indebted country. The refugee crisis of 2015 saw Austria as one of the states that let migrants cross the country (without registering them) to Germany; there were some 90,000 asylum applications of people mostly from Afghanistan and Syria (Die Presse.com, 2016). Austrian politicians, in particular Foreign Minister Kurz have demanded an effective migration policy from the EU.

Both the Greek and the migration crisis further reduced the support for the Grand Coalition parties; in public opinion polls in 2016, the populist FPÖ had by far the largest share of support (Oe24, 2016).

Austria tried to act as a mediator in the Ukraine crisis,; it was suggested that Austrian neutrality would be a “good, up-to-date model” (Trauner, 2014). These suggestions have not been accepted. The EU sanctions against Russia were only reluctantly implemented. For Chancellor Faymann they were “in the best case only a less-than-ideal solution” (Trauner, 2015).

The negotiations between the EU and the United States on the Transatlantic Trade and Investment Partnership (TTIP) have been strongly criticized by the Austrian public. In Parliament, the intended court of arbitration was specifically denounced; the leader of the opposition against the TTIP was once again the Kronen Zeitung (Trauner, 2015).

Austria as an EU Member: Influencing Decision-Making

A medium-sized EU member like Austria cannot influence the EU decision-making on its own. It needs close cooperation partners. In an analysis of the 25 EU member states in 2006, state representatives of 22 countries in the Council working groups said they had close cooperation partners; only officials from Ireland, Slovenia, and Austria did not have such partners (Naurin, 2007). As a result, Austria had problems mentioned previously, such as reducing EU transit traffic and troubles with the “sanctions” of the EU-14 in 2000.

Austria is not part of the Visegrad Group that comprises the Czech Republic, Hungary, Poland, and Slovakia. This group represents Central Europe in the EU and NATO. Even if these countries do not always have identical positions on EU or NATO questions, the intensive exchange of information among ministers and officials of the different ministries gives the Visegrad Group advantages Austria lacks. Smaller countries usually do not have enough resources to gather all relevant information. The alternative often mentioned for Austria, “ad-hoc coalitions,” is not too useful in the EU context, because most decisions made are package deals in which countries exchange “benefits” to each other over time and over different issue areas. Another alternative, cooperation among the neutral and non-aligned members in the EU, is not realistic; the Nordic neutrals (Finland, Sweden) simply have their primary contacts in the Nordic Group. Cooperating closely with Germany would prompt suspicions from other member states; in addition, the interests of Germany as the largest EU member are quite often different from a medium-sized country like Austria.

Economic Effects of EU Membership

The end of the Cold War and the opening up of the countries of Central and Eastern Europe were an unexpected gift for Austria. The country already had high trade with this area before that event, but the cutting of the Iron Curtain enabled Austria’s business community, and its smaller companies, to increase trade and investments significantly. Austria’s Habsburg past surely helped the Austrians to make this move earlier than most other Western countries. Empirical analyses using econometric calculations show that Austria has annually increased its GDP by 0.2%. Austria’s balance of trade improved, as companies could use the cheaper labor force in CEE to remain competitive in global markets.

Joining the EU in 1995 had direct so-called positive integration effects on Austria’s economy. One has to deduct in this context the net contribution of the country to the EU’s budget. Overall, calculations reveal an annual 0.6% rise of Austria’s GDP. Membership in the EMU, the euro area, increased the GDP by 0.5% yearly because exchange rate risks disappeared. Except for the budget deficit and its national debt, adjusting to the euro was no big deal because Austria had linked its currency to the German mark since the 1970s. The Eastern enlargement of the EU (2004–2007) finally contributed 0.2% to Austria’s GDP annually.

If one adds these percentages, but subtracts the overlapping effects, the overall additional growth of Austria’s GDP amounts to 0.9% per year. But there is a caveat. The great recession of 2009 reduced the growth rates in most European states, including the CEE countries. The euro crisis also had a negative influence. Nonetheless, according to economists, the cumulative gains since 1995 should amount to an increase in GDP per capita of 28% or 7,000 euros in Austria (all data from Breuss, 2015).

Public Opinion

Looking at these figures from the end of the Cold War and Austria’s membership in the EU, one would expect that popular opinion would be particularly positive toward the EU. But this is not the case.

Most surveys show that after the country joined the Union, above-average backers of EU membership have been those with higher education and professionals, living in urban areas, who are younger and male. They have a more individualistic outlook and are more market-oriented. Politically, supporters of EU membership tend to be more prevalent in the ÖVP and among the Greens. Opponents of EU membership are found mainly in the lower income strata and among the lesser educated; they have less-skilled jobs and have a more skeptical view of their future. They tend to oppose economic liberalization and globalization. Those who feel better informed about the EU support membership more than people who see themselves as less informed. The more one is satisfied with domestic politics, the more he or she supports EU membership (Ulram & Plasser, 2010, p. 102).

The change of Austrian attitudes toward the EU over time can be observed in Figure 2. Despite the two-thirds majority on the EU referendum in June 1994, in the second half of 1995, a majority of Austrians thought that they had not profited from EU membership. This has to do with the austerity packages mentioned previously.

Austria and the European UnionClick to view larger

Figure 2. Benefited minus not benefited (Percentages).

Question: “Taking everything into account, would you say that (OUR COUNTRY) has on balance benefited or not from being a member of the European Union?”

Source. Standard Eurobarometer.

The attitudes toward the EU then slowly improved—until the “sanctions” against Austria, after which attitudes again turned very negative. Later, Austrians regarded the EU more positively, but most of the time a majority of Austrians thought that the country did not profit from EU membership. The opinion of Austrians was always more negative than the EU average. Of interest is the comparison with the residents of Finland and Sweden. At the start of EU membership, Swedes had rather negative attitudes toward the EU, but in the mid-2000s the Swedish opinion turned quite positive, as did Finnish opinion.

The question used in Figure 2 was asked by the Eurobarometer surveys only until 2011. Table 1 gives more recent results, here about the “trust” people have in the EU.

Table 1. To trust minus not to trust the EU (Percentages).

2014/1

2014/2

2015/1

2015/2

Austria

−30

−7

−27

−39

Finland

6

20

28

5

Sweden

−12

8

7

4

EU

−25

−13

−6

−23

Question: “I would like to ask you a question about how much trust you have in certain media and institutions. For each of the following media and institutions, please tell me if you tend to trust it or tend not to … European Union.”

Source: Standard Eurobarometer.

The results for 2014 and 2015 are similar to previous opinion polls. Austrians again have a rather negative attitude toward the EU compared to those in Finland and Sweden.

When Austrians are asked if the country should leave the European Union, large majorities have since 1995 wanted Austria to stay in the EU. In November 2014, asked if Austria should remain in the EU or leave it, 67% opted for Austria to stay in the EU and only 27% wanted Austria to leave the Union (Schmidt, 2014). The opinion of Austrians on the EU is thus quite ambivalent.

Conclusions

Austria’s position was for a long time just at the border of the free world in Central Europe. There was always the desire to be part of the West, where freedom and economic development were so much more appealing than the Communist systems on its eastern borders. The country succeeded in getting rid of the four power occupation in 1955. But it had to accept the neutrality status, which during the Cold War gave the country a special position in international relations.

With the removing of the Iron Curtain on its borders, Austria has regained its position in the center of Europe. But if the neutral status was a bonus during the Cold War years, it became more of a burden afterwards. Austria was able to join the EU, but could (or would) not join NATO, as all its neighbors in the former eastern bloc did. Up to the great recession of 2009, Austrian business and its economy in general did profit considerably from the new opportunities in Central and Eastern Europe. Austrian politics did not manage as well, as political and diplomatic relations did not develop at the same pace with these countries.

Several studies compare Austria’s experience in the EU with Finland and Sweden (Luif & Oberegelsbacher, 1999; Luif, 2007). Research dealing with theoretical approaches to Austria’s EU membership usually look at “Europeanization” in general (Falkner & Müller, 1998; Neisser & Puntscher Riekmann, 2002) or at selected aspects like its economy, its foreign policy (Alecu de Flers, 2012), or its legal system (see, e.g., contributions to Griller, Kahl, Kneis, & Obwexer, 2015); a general overview on authors and research institutions is found in Hummer (2015).

In the words of prominent scholars, Austria was in its 20 years of EU membership a “reliable” partner, which “has approved and has positively helped shaping” the political integration process; it is part of “core Europe” (Kunstein & Wessels, 2015, p. 75).

But Austria, still one of the richest countries in the Union, will have to struggle to maintain its position. The challenges posed by the Ukraine-Russia conflict, especially the financial problems of the southern European EU members, as well as the migration crisis will demand intelligent answers from the political and economic elite, but also from the Austrian people themselves.

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