On 21 October 1918, 232 German-speaking delegates (102 German Nationalists, 72 Christian Socialists, 42 Social Democrats, 16 from other parties) from the Imperial Council assembled in the Niederösterreichisches Landhaus in Vienna to decide the future fate of the German-Austrian state. On 30 October this Provisional National Assembly elected a State Council (Staatsrat) consisting of 22 representatives. The Social Democrat Karl Renner, who headed the government, presented a draft constitution for this transitional period. There was widespread consensus between the parties as to the future form of government: the German Nationalists and Social Democrats had always been in favour of a republic, while the Christian Socialists were swayed in this direction by a series of articles brought out by the theologiancum-politician Ignaz Seipel. On 12 November the Provisional National Assembly gathered in the Houses of Parliament on Vienna's Ringstrasse and proclaimed "German-Austria" a democratic republic. However, since in their opinion this newly-formed state would not be able to survive on its own, German-Austria was at the same time declared part of the democratic Weimar Republic of Germany.

The newly-elected State Council found itself confronted with an almost insurmountable array of tasks: to draw up a democratic constitution, to foster relations with the neighboring countries, to prepare the peace conference, to reorganize the social structure and, on a priority basis, to supply the population with provisions for the coming winter.

A situation of great political unrest prevailed in Austria, with soldiers streaming back from the front and being unable to find jobs. For the purpose of maintaining public security, in rural areas Heimatwehren (Home Defense Forces) were established, while workers' and soldiers' councils were set up in factories and barracks. The borders of the new state were unsafe: to the south, the SHS State (State of the Serbs, Croats and Slovenes) was staking its claim to areas of Carinthia, while to the north protection of the German-speaking territories of Bohemia and Moravia could not be guaranteed without the use of armed force.

On 16 February 1919 elections to the Constitutional Assembly were held, in which, for the first time, women were permitted to vote. The Social Democrats emerged as the strongest party, with 40.76 % of the votes (72 seats), followed by the Christian Socialists, who won 35.93 % of the votes (69 seats). The German Nationalists gained 26 seats, and 3 seats went to the remaining parties.

Supplying the starving population with provisions was one of the biggest problems facing the new government. The agrarian areas of the former monarchy were located in the successor states, which at first closed their doors to the new republic. It was only with the help of large loans, which had a devastating effect on the state budget, that Austria was able to survive the first years of hunger.

Considerable progress was achieved in the social sector. Both the provisional and the constitutional National Assembly enacted legislation to secure an eight-hour working day, works councils, unemployment benefits, paid holidays for employees and the reform of the health service.

The outcome of the Paris Peace Conference in 1919 was extremely disappointing for Austria. South Tyrol was lost to Italy, and large parts of Carinthia could only be retained through a referendum. German-speaking western Hungary (with the exception of Sopron) was ceded to Austria. Since Anschluss, or union with Germany, which had been agreed in 1918, was now forbidden by the terms of the Treaty of St. Germain drawn up at this conference, the name of the new state had to be changed from "German-Austria" to the "Republic of Austria." The young republic responded to this measure by naming the treaty a "state treaty," arguing that the Republic of Austria had never waged war and could therefore not conclude peace.

The Federal Constitution, which was formulated in 1920 and which, together with its important amendments of 1925 and 1929, is still in force today, is the result of a compromise. Representatives of the parties and the federal provinces presented their opinions, while the legal foundation and the conceptual structure were provided by the lawyer Hans Kelsen, who was later to achieve international renown.

After the First World War, Austria's scope for foreign policy was at first greatly restricted. Despite the circumstances, however, she succeeded in developing positive relations with her new neighbors. A favorable trading agreement was concluded with Hungary and the Republic of Czechoslovakia again began to supply Austria with raw materials, also granting it a vital loan. Particularly after the fascists had seized power in the country, Italy became very protective of the new Republic of Austria-provided that the issue of South Tyrol was not discussed. Relations with the Weimar Republic were correct and agreeable, with the State Chancellors placing the troublesome question of the Anschluss in the hands of private operators.

In view of the disastrous inflation, the long-term economic reconstruction of Austria could only be managed with the help of a loan from the League of Nations. Only a credit amounting to 650 million gold crowns saved the new republic from bankruptcy. The mere announcement of the loan led to an immediate improvement in currency rates.

Years of Relative Stability
While after the catastrophe of the First World War the political forces in the country had co-operated closely with one another and the most important decisions had been made by a coalition of Social Democrats and Christian Socialists, their fundamental ideological differences now resulted in increasing political cleavage. In June 1920, a relatively small incident in Parliament led to the break-up of the coalition. Strangely enough, this suited both parties; the Social Democrats had already decided to step down, which in the end did not benefit the country's political climate. The ensuing heads of government came from the ranks of the Christian Socialists or in coalition with the German Nationalists. The new leading light among the Christian Socialists was Ignaz Seipel, who-with short interruptions-headed the government until 1929.

Both politically and economically, a short period of stabilization ensued. In 1925 Austria issued a new currency in the form of the schilling and the rigid control exercised by the League of Nations was withdrawn. However, the employment situation and the still excessive number of civil servants continued to pose problems. The parties were obliged to formulate their positions more clearly in new party programs, although the verbal radicalism of the Social Democrats' "Linz Program" gave rise to several misunderstandings and wrong interpretations. Furthermore, the rivalry between the classical mass parties grew in the form of the paramilitary organizations that had existed since 1918. The right-wing Heimwehr (Home Defense Force) and the left-wing Republikanischer Schutzbund (Republican Defense League) regarded themselves as more effective representatives of the respective ideological positions. The martialisation of daily life became a ruinous process for the Austrian Republic.

Just how dangerous this situation had become was demonstrated by the events of July 1927. In January of that same year during one of their regular military parades in Burgenland right-wing militia had killed a war veteran and a child. The three men responsible for this act were, how-ever, acquitted by a Vienna jury. The numerous followers of the Social Democratic movement were enraged but the party leaders were undecided in their reaction, which meant that spontaneous and leaderless mass demonstrations came and went without any political consequences. Acts of violence by the incensed masses were counter-acted by an order for the police to open fire. The results were disastrous: 89 deaths and several hundred injured persons. The Social Democrats launched a general strike, which, however, was largely ignored. The political power within the country had clearly shifted towards the right. All bridges to the political opponents were broken and the intellectual party leaders-Ignaz Seipel for the Christian Socialists and Otto Bauer for the Social Democrats-opposed each other implacably. Much to the detriment of the Republic, the adherents of the parties took up these inexorable attitudes without restriction.

In 1930 the Heimwehr launched an anti-Marxist program in the form of the "Korneuburg Vow", which showed clear fascist traits. Much to the displeasure of the Christian Socialists, at the next elections the Heimwehr stood as a political party.

The cabinet installed as an interim solution and headed by chief of police Johann Schober managed to achieve the necessary consensus for implementing constitutional reforms and also succeeded in securing the abolition at the International Court in The Hague of the "law of liens and pledges" that had been imposed on Austria in connection with the loan taken from the League of Nations. It was unfortunate that, as Minister of Foreign Affairs serving the government led by Otto Ender, Schober had launched a project for a customs union with Germany from which Austria now had to back down. Another decision taken by the Cabinet-that of forcing the country's most influential banking house, Credit-Anstalt, to take over the insolvent Bodencreditanstalt-also proved to be a mistake. This led to the collapse of the Credit-Anstalt and Austria could only survive this disaster with the help of a further loan from the League of Nations.

In the 1930s Austria drifted into a precarious situation, both politically and economically. The Pan-Germanists, who had proved their worth as coalition partners, left the government in 1932. This prominent party now only consisted of officials, since its followers had long since migrated to the ranks of the radical National Socialists.

The parliamentary elections of April 1932 showed the Christian Socialists only too clearly which way the wind was blowing. When the government was re-formed in May 1932 a newcomer, the former Minister of Agriculture Engelbert Dollfuss, took over as head of the Cabinet. He formed his government with the help of the Heimwehr and the Landbund, a party formed of members of the agrarian classes. By a majority of just one vote in Parliament, the resolution to take another loan from the League of Nations was adopted. This did not produce any immediate consequences since the unemployment figures of 600,000 were too high.

The Break with Democracy
Given this scenario, it was hardly surprising that-as in other European countries-corporatist social systems and authoritarian forms of government were discussed and became implanted in the minds of the people as a remedy. A minor impasse in parliamentary procedure, which in less critical times would have passed by unnoticed, provided Dollfuss with the pretext for dissolving Parliament. For this purpose, the government resorted to an Act passed during the First World War, which during the 1920s had been applied several times, albeit in conformity with the law. With the help of this Kriegswirtschaftliches Ermächtigungsgesetz (War Economy Empowering Act), the government issued numerous ordinances and Parliament was accused of having "dissolved itself." The actual breach of the Constitution, however, only came with the liquidation of the Constitutional Court.

In his foreign policy, Dollfuss relied on the help of Italy and the fascist dictator Benito Mussolini, who was striving to oust the Social Democrats from the political scene. He therefore resorted to the policy of steadily dismantling his political opponent, while at the same time the Heimwehr, which was supported by Italy, gained increasing power. Dollfuss now felt squeezed on all sides. In a speech to the Catholic Assembly in 1933, he abolished all existing political parties in order to unite the conservative forces in the "Fatherland Front" (Vaterländische Front) and set about installing a corporatist system in keeping with the papal social encyclicals.

Finding themselves cornered and with very little political scope, the Social Democrats now reacted to an incident in Linz with the use of arms. The ensuing conflict was crushed by the police with extreme brutality and excessive use of arms after three days. Since martial law had been proclaimed, despite international protests nine death sentences were passed and the number of casualties on both sides was enormous. Several Social Democrat leaders and hundreds of their followers fled to Czechoslovakia, where they formed a new organization. The rift caused by this civil war divided the political camps for decades. Through its unnecessarily brutal treatment of a clearly weaker opponent, the Austrian government suffered an enormous loss of prestige abroad.

Just a few months later, the Cabinet decreed the establishment of a new authoritarian constitution. By concluding the "Roman Protocols" with Hungary and Italy, Dollfuss endeavoured to gain support against the growing threat of National Socialism. However, neither the rigorous measures taken against this party nor the secret negotiations conducted could halt their aggression. On 25 July 1934 the Nazis attempted a coup d'état, in the course of which Engelbert Dollfuss was murdered. Nevertheless, this attempt, which triggered off several days of fighting, particularly in Carinthia, miscarried. The leaders of the putsch, most of whom were former members of the army, were tried before a military court and thirteen death sentences were passed.

The Fight for Survival
Following the National Socialists' unsuccessful coup, the President of the Republic, Wilhelm Miklas, asked the former Minister of Justice, the Christian Socialist Kurt Schuschnigg from Tyrol, to form a government. Schuschnigg sought to pursue the same course as before, with the aim of gaining time against the aggression of the German Reich. Prompted by their escapades in Abyssinia, in the course of 1935, Italy, which just one year before, in July 1934, had amassed troops on Austria's borders, began to side with National Socialist Germany. Schuschnigg's attempts to interest the Western powers in Austria's fate fell on deaf ears, largely because of the poor image projected by his authoritarian government. Further-more, England was pursuing a policy of appeasement, which meant tolerating the expansion of the German Reich. As a result, Germany's occupation of the Rhineland did not meet with any opposition internationally, while the Olympics held in Berlin during 1936 restored Germany's reputation as a "normal" country. In order to take account of these new developments, Ambassador von Papen advised negotiating a compromise with the German Reich, which was signed in July 1936. While this "gentlemen's agreement" on the one hand guaranteed Austria's independence, at the same time it officially gave the Austrian National Socialists renewed political scope, which they then used to the full.

Schuschnigg thus felt cornered and the agitation of the National Socialists within the country reached new dimensions. Again, it was Ambassador von Papen who recommended a personal meeting with Adolf Hitler at Obersalzberg in Bavaria. The outcome of these discussions was, however, disastrous. Hitler put Schuschnigg under enormous pressure: the concessions granted to the National Socialists led to a Cabinet reshuffle on 16 February 1938 and, for the first time, the Austrian Federal Chancellor was forced to include some Nazis in his government. Much too late, Schuschnigg sought the support of the Social Democrats, who had been liquidated as a party some time before.

In the German Reich, it was mainly Hermann Goering, the minister responsible for armament, who was pushing for a strategy of union with Austria as against a policy of economic penetration. This was because Germany, which was bent on rearmament, had a dearth of workers and foreign currency, both of which it hoped to procure quickly by enforcing a violent solution towards Austria. Major protests were hardly to be expected, either from the countries of Western Europe or from Italy. Schuschnigg's last desperate attempt to ward off this strategy was to announce a plebiscite, which, however, only served to accelerate German aggression.

The Anschluss with Germany, which was proclaimed in March 1938 with the aid of false documents and massive propaganda, was not counteracted with any military action from Austria, since-both morally and strategically-the country felt too weak to respond. Internationally, there was little reaction: only Mexico, the Soviet Union, Chile and China protested against this measure. With the help of the Austrian National Socialists, power was seized without a hitch. The Austrian cabinet leaders were arrested and then deported to concentration camps. During the following months, Austria's Jews were exposed to unprecedented terror, subjected to mental humiliation and physical torture, robbed of their possessions and expelled from the country. In order to give these actions a quasi-legal basis, on 13 March a mock Council of Ministers was convened which adopted the resolution for the Anschluss. This was followed by a referendum held in Greater Germany on 10 April. With the outrageous use of propaganda, the votes of the people were misused to "legalize" an act of violence.

The Dark Years of Reflection
The Nazi regime quickly took root in Austria, with the system reaching heights of perfection hitherto unknown in the German Reich. The terror machinery set up by the SS and the security service was lent further support by the formerly illegal National Socialists of Austria. Particularly the liquidation of regime opponents and the hideous persecution inflicted upon the Jewish population throughout the German Reich through deliberate or tolerated acts of cruelty reached new, untold dimensions. The Austrian Jews were robbed of their very existence and, by the beginning of World War II alone, 250 anti-Jewish ordinances had been issued.

On 1 April 1938, in a special transportation unit, Austria's political élite were deported to the concentration camps. In the following months, some 130,000 Austrians left their homeland in order to find a secure place of exile, mainly in other Western countries. Those who were subject to the Nuremberg Laws were first divested of almost all their possessions. For Austria, the expulsion of these citizens meant a loss of intellectual substance that was to leave its mark on the country for decades to come. After the end of the Second World War, hardly any of the exiled persons wanted to return to the country that had driven them out.

Shortly after the Anschluss, resistance reared its head within the different political groups; Communists and legitimists, one-time Social Democrats and members of the Heimwehr were unwilling to accept the new regime. However, since a single national resistance group as such was never formed, it was easy for the Nazi rulers to unmask their adversaries and to persecute them relent-lessly. Because of the deep rifts that existed between the different political groups, it was also not possible to build an effective and recognized exile government abroad. The individual resistance movements formulated different political objectives, some of which appeared almost utopian. It was only the Moscow Declaration of 1943 that defined a clear direction, when the Allies declared the restoration of a sovereign Austrian state as being one of their war goals.

It was only during the last months of the war that resistance took on a more active form when members of the resistance movement in Tyrol established contact with American intelligence services. While the Austrians did not succeed in securing military support, they at least managed to provide the Western Allies with information concerning the course of the war. In the autumn of 1944 the "Provisional National Committee of Austria" (POEN) was established, which for the first time united groups with different political aims. The military resistance movement maintained contact with these groups-or at least those which had survived the inferno of persecution following the assassination attempt on Hitler of 20 July 1944. It was also members of the military resistance movement who first established contact with the advancing Soviet troops and informed them about German military plans. Nevertheless, the battle for Vienna raged until 13 April 1945.

For Austria, the consequences of the Nazi regime and the Second World War were disastrous: during this period 2,700 Austrians had been executed and more than 16,000 citizens murdered in the concentration camps. 16,000 Austrians perished in prison, while over 67,000 Austrian Jews were deported to death camps, only 2,000 of them living to see the end of the war. In addition, 247,000 Austrians lost their lives serving in the army of the Third Reich or were reported missing, and 24,000 civilians were killed during bombing raids.

Return to an Independent State
The plans drawn up by the four Allies for the post-war period were based on the complete defeat of Hitler Germany. Austria was occupied by Allied troops, which divided the country into four zones. In the capital city, Vienna, the zones were partitioned according to district, while the inner city was administrated through a rota system.

Even before the war officially came to an end in May 1945, political parties had formed in Austria which together with the federal provinces, became the driving force behind the declaration of independence. In the eastern part of the country, the Soviets set up a government headed by former State Chancellor Karl Renner, which-albeit with circumstantial delays-also gained the approval of the Western Allies. The first tasks facing this provisional cabinet were to restore civilian life and to supply the population with provisions. With the support of the Allies, a normal democratic system was soon put in place, and on 25 November 1945 the first democratic elections for more than a decade were held. Former Nazis were excluded from voting and, depending on their offense, in a denazification process conducted by the Austrian authorities were made to answer for the crimes of the past. A general reparation of the financial damages suffered, particularly by Jewish citizens, was undertaken gradually-between 1946 and 1949 seven restitution laws were enacted, which referred to both tangible and intangible property that had come into the hands of the State. However, major reparation measures were implemented only during the past few years, one example being the agreement drawn up in 2000 concerning voluntary Austrian payments to former victims of forced and slave labor, who were forced to work on the territory of the present-day Republic of Austria. Negotiations regarding Aryanised private property are still under way.

The political administration of the country was completely controlled by the Allies. Every legislative regulation and political action required their approval. In December 1945 the Allies gave their consent for the democratically elected cabinet headed by Leopold Figl. Austria and its politicians, who had learnt from the bitter experiences of the past, together turned their attention to the reconstruction of the country and the restoration of full sovereignty.

Since with the establishment of the satellite countries of the Soviet Union Austria found itself at the intersection of two ideological systems, the reconstruction of a country that was to be accepted by the international community required a lot of sensitivity and, above all, a great deal of patience.

The first decade in the post-war history of Austria was characterized by the attempts to achieve a state treaty restoring its sovereignty. As after the First World War, Austria held the view that, as a country, it had not participated in the war since it had previously been deprived of its existence as a state. In consequence, Austria strove for the conclusion of a state treaty with the four Allied powers. However, since with the outbreak of the Cold War these were now implacably opposed to another, Austria's efforts to conclude a state treaty were dragged into the maelstrom of international politics.

Due to the generous assistance received under the Marshall Plan, the economic reconstruction of Austria forged ahead surprisingly fast. Informal institutions such as that of "social partnership", a negotiating body made up of representatives of employers and employees, were set up to secure social peace. Even the Communist strikes of 1950, which recalled the power take-overs in the countries beyond the Iron Curtain, could be overcome by the basic Austrian commitment towards forming a state.

Belvedere Palace

During the reconstruction period, the system of coalition governments involving the two major parties, the Austrian People's Party (ÖVP) and the Socialist Party (SPÖ), enabled basic agreement to be reached regarding Austria's international orientation. Nevertheless, in the wake of the East-West conflict, the negotiations for a state treaty did not bear fruit until 1954. It was only after Stalin's death that the new Soviet policy of peaceful coexistence opened up fresh avenues for this Austrian desire. When Austrian politicians brought the subject of neutrality into the discussions, the Soviet Union signaled its fundamental readiness to sign such an agreement. In April and May 1955, Austria used this opportunity in Moscow and Vienna to negotiate a state treaty which finally restored Austrian sovereignty. After decades of war and hardship, the signing of the State Treaty on 15 May 1955 in Vienna's Belvedere Palace was one of the most moving moments in Austrian history.

A FREE COUNTRY IN EUROPE

A Player on the International Stage Again
Austria immediately took up its position within the international community. On 15 December 1955 it joined the United Nations, a step to which it had for a long time aspired. On 26 October 1955 the Austrian National Council enacted a constitutional law guaranteeing the country's permanent neutrality. Together with the State Treaty, this law provided the legal framework for Austria's future foreign policy. Austria very quickly found a highly independent interpretation of its status as a neutral country. Its basic restriction to military neutrality while continuing to participate in international institutions can best be described as a "policy of non-intervention" which gained universal acceptance.

One of the direct results of the Austrian State Treaty was the return of all the prisoners-of-war from the Soviet Union, which brought great joy to the Austrian people. Among the home-comers were numerous victims of Stalin's despotism. The repatriation of Austrian citizens who were exiled by the Nazi regime in 1938 and in the ensuing years is a process that has not been systematically pursued by the Austrian State. Whilst in the immediate post-war period this lapse could be attributed to problems of traveling, in later years, however, it was a serious omission.

It was only natural that Austria, too, should want to benefit from the economic upswing of Western Europe, which had initiated the first step towards integration with the Roman Treaties of 1957. However, this generated friction within the coalition government. While the People's Party consistently supported a policy of rapprochement towards the EEC, the Socialist Party and its Secretary of State for Foreign Affairs, Bruno Kreisky, were in favour of incorporating Austria into the system of the European Free Trade Agreement (EFTA). In 1960, the treaty with EFTA was signed in Copenhagen. Austria's efforts to join the EEC met with harsh comments from the Soviet Union as one of the signatory parties of the State Treaty.

This process of rapprochement only saw a more successful development during the 1970s once the British-French conflict had been resolved and agreement had been reached between the EEC and EFTA in 1972.

Declaration for Settlement of the Dispute with South Tyrol
In 1946, as a state with restricted sovereignty, Austria had reached an agreement with Italy that guaranteed the German- speaking population of South Tyrol certain rights. However, this Gruber-De Gasperi-Agreement, named after the two Ministers of Foreign Affairs who signed it, was not considered adequate by the people of South Tyrol. When the new Italian Constitution ruled that the provinces of Bolzano and Trento should amalgamate to form the "Trentino-Alto Adige Region," with the resulting shift in population figures the people of South Tyrol saw the humble blessings of their autonomy dwindling. Austria brought this problem before the UN General Assembly, which recommended a bilateral solution for the two countries involved.

The situation escalated when terrorist attacks were made on material goods. Several South Tyroleans were arrested by the Italian authorities, stood trial and were heavily sentenced. Austria's negotiations with the EEC were also burdened by this conflict. In 1969, the "South Tyrol Package", containing 120 points and including an "operation calendar" as a timetable, was concluded. This paved the way for a solution to the problem. In the summer of 1992 Austria presented to the United Nations a "Declaration for Settlement of the Dispute", which satisfied the previous demands. This gradual process of resolving a bilateral conflict was acknowledged as exemplary the world over.

The State Treaty as a Foundation
In 1956 the Austrians recognized the true value of the State Treaty when in October of this same year a revolution broke out in Hungary against the Communist dictatorship. Despite American admonitions, there was a very great danger that Soviet troops would cross the borders into Austria. During those critical days of October and November, the Austrian army, which had only been established a short time before with the help of the Western Allies, passed its first test. The streams of refugees which poured into Austria as Hungary's immediate neighbor were managed with great efficiency by the Austrian authorities and, in a strong demonstration of solidarity, the Austrian people helped to supply the home-less with food and clothing.

In Article 7 of the State Treaty, Austria had pledged itself to finding favorable solutions for the ethnic minorities of the Croats in Burgenland and the Slovenes in Carinthia. These measures included putting up bilingual place-name signs, which in the autumn of 1972 led to riots by anti-minority groups. In a series of laborious negotiations a compromise was finally reached that foresaw the installation of new bilingual signs. Institutions such as councils composed of members of ethnic groups were also set up in order to monitor the developments. With an amendment to the Austrian Federal Constitution passed in 2000, the protection of minorities was officially incorporated into the Constitution as one of its provisions. In this way, the Austrian Federal Government turned a proposal made by the ethnic group councils in 1997 into reality.

Political Changes in Austria
In its domestic policies, Austria experienced a decade of continuity in which, despite some signs of wear and certain disputes, the "large coalition" made up of the People's Party and the Socialist Party managed to remain in power. The third party that existed during this period of re-establishing the state, the Communist Party (KPÖ), was consistently losing followers and in 1959 did not gain enough votes to secure a seat in Parliament. In the meantime, national liberal groups had formed a new political camp, initially with the "Verband der Unabhängigen" (Association of Independents-VdU) and then with the "Freiheitlichen Partei Österreichs" (Freedom Party of Austria-FPÖ), which, with just eight Members of Parliament, for years occupied a minority position. Between the coalition parties a new climate began to develop, which was reflected in a policy of conciliation without, however, the necessity of withstanding outside pressure. The SPÖ opened up to the Catholic Church and the parties which had fought against each other in the civil war of 1934 were united in their sorrow over what had happened.

In the mid-Sixties, a new generation of politicians who were not burdened by the experiences of the pre-war period. Both parties felt the desire for reforms. In the People's Party it was Minister of Finance Josef Klaus who launched a rigorous austerity program. In 1966, however, approval of these reforms on the one hand and misgivings about a number of issues concerning the media, on the other, led to the collapse of the large coalition and to a clear majority for the People's Party. For the first time in the history of the Second Republic, a one-party government was formed, headed by Josef Klaus. Austria's democracy stood this test with its newly-won maturity. The new Federal Chancellor presented an ambitious reform program and, as the first government leader of the Republic to do so, included a woman in his cabinet. In the latter half of the 1960s, however, Europe was hit by recession, which hindered the implementation of some of these economic reforms. At the same time, the ÖVP Chancellor saw himself confronted in the SPÖ by a charismatic politician in the person of Bruno Kreisky, who claimed the goals of the "'68 movement" for his party. Kreisky successfully distanced himself from Communism before the suppression of the Prague Spring, which served to strengthen his position. Because of its links with armed Communism perpetrated by Soviet tanks, the KPÖ found itself in increasing isolation.

In the National Council elections of 1970 the People's Party lost its absolute majority. The Socialist Bruno Kreisky initially formed a minority cabinet, which enjoyed the support of the Freedom Party. After the adoption of new voting legislation which benefited the smaller parties, during second elections in 1971 Kreisky gained a clear majority. As a single-party government, the Socialists continued to pursue their policy of general liberalization and openness, while their efforts towards democratization and increased emancipation in a number of different areas found approval with their voters. With its good international connections, the Kreisky government's foreign policy enhanced Austria's position in the world. The prevailing economic boom facilitated the Socialist Party's advance to a middle-class workers' party.

Like many other European countries at the time, in the 1970s Austria became entangled in the web of international terrorism, which was reflected here, too, by the kidnapping of hostages and terrorist attacks.

When, in 1979, the "Vienna International Centre" was handed over to the United Nations as their third permanent headquarters, this constituted an important mile-stone for Austria's international reputation. The promotion of Vienna as an international centre was borne out by major conferences hosted by the city, such as the SALT II Conference. As part of its active policy of neutrality, Austria has participated in a number of peace-keeping operations and also lent strong support to the Middle East peace process by acting as a mediator.

After thirteen years of the Kreisky government, a change in political weighting began to manifest itself. Its misjudgment of the Austrians' fear of atomic energy, which became manifest when the establishment of a nuclear power plant at Zwentendorf was rejected in a referendum, and the ensuing growth of the ecological movements led to the Socialist Party's loss of the absolute majority in 1983. Bruno Kreisky resigned. His successor, Fred Sinowatz, formed a socio-liberal coalition with the Freedom Party, thus demonstrating Austria's progress towards democratic maturity. The discussions focusing on the establishment of a hydro-electric power plant in a natural reserve on the Danube reinforced the attractions of the environmentally-oriented parties. Furthermore, in 1986 the socio-liberal coalition ran into problems when the Freedom Party elected a new party leader in the person of Jörg Haider, who abandoned the former liberal course. As a consequence, the new Socialist Chancellor Franz Vranitzky decided to discontinue his party's alliance with the FPÖ and to again seek a partnership with the People's Party. Together, the two leading parties bore the brunt of the international problems resulting from the Waldheim crisis. In economic affairs, Vranitzky steered a new course in that, faced with the problems of the nationalized industries, he showed his willingness for privatization and paved the way for European integration within his party.

The Winds of Change in Austria and Europe
With the collapse of Communism in the countries of Eastern Europe, Austria was no longer positioned at the junction of two different social systems. This change necessitated a re-orientation of Austria's foreign and security policy. The fall of the Iron Curtain met with great emotional approval; many Austrians who had fled Eastern Europe in 1989 now witnessed with satisfaction the end of the hated regime.

When in the 1990s the multiracial state of Yugoslavia disintegrated because of its national differences and the changed expectations of its peoples, Austria had already issued early warnings about the consequences of these developments. To help the victims of these wars it set up the exemplary "Nachbar in Not" (Neighbor in Need) relief program, which rendered much-needed assistance both in the Bosnian war and during the fighting in Kosovo in 1999.