AUSTRIA: Meeting the Challenge...
Student Text Page No. 1: "As a Nation"

"Klein aber fein." Loosely translated: "small but beautiful." That's how one American writer described Austria's economy. Historians might add "wunderbar," "miraculous!" From giant steelworks in Linz, to ski lodges in Innsbruck, to financial centers in Vienna, Austrians have rebuilt an economy that lay in ruins just two generations ago.

Tourists in Vienna for a Schubert or Mozart festival can sense why Austria's per-capita gross domestic product ranks among the world's top 10. Hotels are packed. Streets fill with workers on lunch breaks. Shops can't keep up with orders for crystal handcrafts. But even those who recognize the nation's strengths may wonder: How did Austrians, so desperate after World War II, manage to build such an economy?

Marshall Plan. They had help. In the late 1940s, the USA offered financial aid to any European nation that would (1) produce a plan for using such aid and (2) "open its books," to show how the money was being used. Thus, Austria and other war-torn nations could restart industries, create jobs, and promote sales. And U.S. exporters could look forward to a better market for their goods. Between 1948 and 1952, this European Recovery Program (ERP), known also as the Marshall Plan, poured nearly a billion dollars into Austria. Three fifths of this aid went into basic industries — mining, electric power, and steel. Soon, the sale of metals and power turned the ERP funds into profits, then into savings, then into loans for starting other businesses. In fact, Austria's billion-dollar grant was probably recycled, through new loans, six or seven times!

Partners all. Despite such growth, post-war Austrians feared a communist takeover of their key industries. To prevent this, their government used ERP funds to buy companies in the fields of mining, power, transportation, and banking. Sometimes, such nationalization paves the way for totalitarian rule. But not in Austria. Austrians developed a "social partnership," in which government, employers, and trade unions would each have a voice in shaping work-related policies — minimum wages, for example. Today, the same three "partners" still share the costs of big national programs that provide Austrians with health, education, and retirement benefits. In recent years, however, the government has been mounting a campaign to cut pension and welfare benefits, for the sake of a balanced budget.

Unfinished symphony? Once the seat of empires, Austria today is a small democratic republic, whose government is privatizing (selling) many of the industries it made successful. And its industries are up-to-date! Workers in mining and lumbering operations use high-tech tools. Farmers devote an increasing amount of acreage to organic agriculture. And most of the workforce (67 percent) are in medical, scientific, electronic, financial, and other service industries.
     Equally important to Austria's economy is its cultural wealth, which attracts millions of visitors yearly. Festivals resound with the music of Brahms, Haydn, and other composers. Exhibitions showcase the works of Adolf Loos and fellow architects. Theatergoers can choose a modern comedy, a classic drama, or the revival of one of the "magic plays" invented in Austria centuries ago. But Austrians do more than celebrate this heritage. They study it as a key to their past — and to their future.

Key Questions. What did the post-war years reveal to Austrians and others about the nation's strengths? What insights might Americans gain by knowing Austrians better? How influential will Austria's cultural heritage be, over your lifetime? 100 years from now? As you think about those questions, you might want to keep track of current events and issues reported in "Austria Information" on a Site maintained by the Austrian government.