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COUNTRY PROFILES


PROFILE

Country Profile

Area: 83,871 sq. km (32,382 sq. miles)
Population: 8.3 million
Capital City: Vienna (1.6million)
Languages: German (98.5%)
Ethnic Groups: Croats, Slovenes, Hungarians, Czechs, Slovaks, Roma and Sinti (officially recognised)
Religion(s): Roman Catholic (73.6%), Protestant (4.7%), Muslim (4.2%), Other (3.5%), Nondenominational (12%)
Currency: Euro
Major political parties: Social Democratic Party (SPÖ); People’s Party (ÖVP); Greens; Freedom Party (FPÖ); Alliance for the Future of Austria (BZÖ).
Government: Federal Republic, Parliamentary Democracy
Head of State: President Heinz Fischer (elected 2004, re-elected 2010)
Federal Chancellor: Werner Faymann (SPÖ) (since 2 December 2008)
Foreign Minister: Michael Spindelegger (ÖVP) (since 2 December 2008)
Membership of international groupings/organisations: In 1995, Austria joined the European Union (EU). Austria is also a member of the United Nations, the Council of Europe (CoE) and the Organisation for Security and Co-operation in Europe (OSCE). Austria was a non-permanent member of the UN Security Council from January 2009 until the end of 2010.

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ECONOMY

Economic Facts

GDP: €284 bn (2010)
GDP per capita: €34,120 (2010)
GDP growth: +2.3% (2010)
Inflation: 3.3% (average in 2010)
Source: Statistik Austria
Major Industries: food, luxury commodities, mechanical engineering, steel construction, chemicals, vehicle manufacturing and service industries.

The Austrian economy grew by 2.3% in 2010. After the most significant drawback in economic growth since World War II in the year 2009 (-3.8%), the year 2010 brought a significant recovery. By way of comparison: The average growth for the EU countries was +1.9%, the economy of the Euro Zone grew by +1.8%.

The inflation rate for 2011 was 3.3%, its highest value since 1993 and well above the 2% average for the previous 10 years.

Austria’s budget deficit rose from 0.5% of GDP in 2008 to 3.5% in 2009 and 4.4% in 2010 (source: Statistik Austria). This is a consequence of the financial crisis. The national debt, which had fallen continuously since 2007, is now at 71.8%. This increase is a result of state intervention to help banking institutions, but also the result of a change in accounting rules (part-privatised state institutions’ debt is now included in this figure)

Austria’s major trading partners are its fellow EU states – first and foremost Germany, followed by Italy and Switzerland. Austria’s other immediate neighbours (the Czech Republic, Hungary, Poland, Slovakia, and Slovenia) also feature prominently amongst its trading partners. While Austria’s exports to its traditional markets (including the USA, the UK, Germany, Spain and Italy) have fallen substantially since 2005, its exports to China, Poland, the Czech Republic, the Russian Federation and Brazil have grown strongly (source: Statistik Austria). The Austrian government is pushing for greater engagement with the Black Sea region and recently opened a new embassy in Baku. This is part of Austria’s new Danube Strategy, in the context of which Austria will work with its fellow Danube states to build up the Danube as an economic and cultural link between their countries.

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HISTORY

Modern Austrian history begins with the defeat of the Axis Powers in the First World War, when the non-German speaking territories of the former Habsburg Empire achieved independence. The Republic of Austria was established in 1918. The inter-war period was marked by severe social conflicts arising from economic and political instability, culminating in the (fairly benign) absolutist rule of Dollfuss, his assassination in 1934, at Nazi behest, and the gradual rise of pro-Nazi Austrian groups. In 1938, Hitler incorporated Austria into the German Reich with the Anschluss (“Joining”).

After the Second World War, Austria was occupied by the USSR, US, UK and France for 10 years, and did not regain its independence until May 1955. On 15 May, after long and difficult negotiations between the four powers and Austria, the State Treaty was signed. The key aspect was Austria’s commitment to “permanent” neutrality, which Austrians subsequently came to see as a basic element of the Austrian state’s identity. Austria has used its neutrality to play a mediating role, often offering Vienna as a venue for meetings of rival parties during the Cold War and since. Following East-West rapprochement and the collapse of the former Soviet Union in 1989, and Austria's accession to the European Union in 1995, the logic of neutrality is no longer so absolute. Austria has participated in NATO-led military missions, EU-led civilian missions in the former Yugoslavia and recently in the EU humanitarian mission in Chad (EUFOR) and its successor, under UN auspices, MINURCAT and the EU Rule of Law Mission in Kosovo (“EULEX”). However, there remains a strong political attachment to neutrality, and there is no early prospect of it being formally rescinded.

BBC Timeline of Austria (http://news.bbc.co.uk/hi/english/world/europe/newsid_1033000/1033454.stm)

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INTERNATIONAL RELATIONS

Austria joined the European Union in 1995. It is a member of the UN and hosts a number of UN agencies. It also hosts, in Vienna, the Secretariat of the Organisation for Security and Cooperation in Europe (OSCE) and the Organisation of the Petroleum Exporting Countries (OPEC). Since 1955, Austria has been a neutral state. NATO membership is likely to remain off the agenda, with the concept of neutrality extremely popular among the electorate, but Austria will continue to participate in NATO led initiatives such as Partnership for Peace. Austria contributes to a large number of UN peacekeeping operations. Austria also contributes to a number of EU-led civilian missions in the former Yugoslavia and recently participated in the EU and UN humanitarian mission in Chad and the EU Rule of Law Mission in Kosovo (“EULEX”).

Austria was elected as one of two new, non-permanent UN Security Council members for the ‘Western Europe and Others Group’ (WEOG) for the period January 2009 to end 2010.

Because of its geographical position and history, Austria has strong links with countries in Eastern and South Eastern Europe. Stability and prosperity in the western Balkans remains a key Austrian foreign policy goal. With that in mind, Austria supports the EU’s further expansion to the western Balkans, particularly Croatia. Widespread opposition remains across most of the Austrian political spectrum to Turkish EU membership.

UK-AUSTRIAN BILATERAL RELATIONS

Bilateral relations with the UK are good and we maintain close working relationships at ministerial and official level on a wide range of EU policy, in particular economic reform, climate change and justice and home affairs. Close ties also exist with Austria on key areas of foreign policy, including in promoting stability in south-east Europe.

Parliamentary Links

The Chairman of the British Austria All-Party Group is Angus Robertson (SNP). The Group’s Secretaries are Lord Methuen (Liberal Democrats) and Lord Dubs (Labour).

Cultural Relations with the UK

The British Council (http://www.britishcouncil.org/austria/english/index.htm) has been operating in Austria since 1946. The Vienna office acts as the regional centre for British Council operations in South East Europe. The main areas of activity are intercultural dialogue, creativity in education, arts and science, and economic reform in an expanding Europe.

The Austrian Cultural Forum (http://www.austria.org.uk/culture/index.html)in London promotes co-operation in the fields of culture, art, science and education.

The Anglo-Austrian Society (http://www.angloaustrian.org.uk)is an educational charity, which aims to promote friendship and understanding between Austria and Great Britain through personal contact and cultural events.Recent Visits
Inward:
-- President Heinz Fischer had an audience with The Queen on 30 November 2011

-- Vice-Chancellor and Foreign Minister Michael Spindelegger called on Foreign Secretary William Hague on 10 November 2011.

-- Foreign Minister Michael Spindelegger called on Foreign Secretary William Hague on 11 November 2010.

Outward:

-- Alistair Burt, Parliamentary Under Secretary of State at the FCO, attended the IAEA General Conference and held bilateral meetings with Austrian counterparts on 19 September 2011.

-- Chris Huhne, the then Secretary of State for Energy and Climate Change, met with Nikolaus Berlakovich, Environment Minister, Reinhold Mitterlehner, Business Minister, and the head of OPEC, Abdalla Salem el-Badri, on 20 June 2011.

-- Damian Greene, Minister for Immigration, met with Johanna Mikl-Leitner, Minister of the Interior, on 20 June 2011.

-- Energy Minister Charles Hendry met his Austrian counterpart Reinhold Mitterlehner on 21 September 2010.

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GEOGRAPHY

Located in southern Central Europe, Austria’s territory includes the Eastern Alps (which cover two thirds of its surface area) and the Danube region. Austria’s major area of economic activity is in the Danube valley, the east and south-east, where it is less mountainous. A landlocked country, Austria borders Germany, Czech Republic, Slovakia, Hungary, Slovenia, Italy, Switzerland and Liechtenstein.
-- Highest mountain: Grossglockner (3,797 metres/12,530 feet)
-- Longest river: The Danube flows through Austria for 350 km (220 miles)
-- Terrain: Alpine (64%) northern highlands (10%) and lowlands to the east (26%)

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TRADE AND INVESTMENT

Trade and Investment with the UK

The UK is ranked 33rd in Austria's import league table. Provisional figures for 2010 put total UK imports to Austria at €1.7 bn (+7.7% on 2009). Most Austrian business people (especially the younger generation) are proficient in English.

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Last Updated: February 2012

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