Austria

Phone Code: 0043

Root-level Domain Code: .at

CIA Info

Background: Once the center of power for the large Austro-Hungarian Empire, Austria was reduced to a small republic after its defeat in World War I. Following annexation by Nazi Germany in 1938 and subsequent occupation by the victorious Allies in 1945, Austria's status remained unclear for a decade. A State Treaty signed in 1955 ended the occupation, recognized Austria's independence, and forbade unification with Germany. A constitutional law that same year declared the country's "perpetual neutrality" as a condition for Soviet military withdrawal. The Soviet Union's collapse in 1991 and Austria's entry into the European Union in 1995 have altered the meaning of this neutrality. A prosperous, democratic country, Austria entered the EU Economic Monetary Union in 1999.

Economy Overview: Austria, with its well-developed market economy and high standard of living, is closely tied to other EU economies, especially Germany's. The Austrian economy also benefits greatly from strong commercial relations, especially in the banking and insurance sectors, with central, eastern, and southeastern Europe. The economy features a large service sector, a sound industrial sector, and a small, but highly developed agricultural sector. Membership in the EU has drawn an influx of foreign investors attracted by Austria's access to the single European market and proximity to the new EU economies. The outgoing government has successfully pursued a comprehensive economic reform program, aimed at streamlining government, creating a more competitive business environment, further strengthening Austria's attractiveness as an investment location, and implementing effective pension reforms; however, lower taxes in 2005-2006 have lead to a small budget deficit in 2006. Weak domestic consumption and slow growth in Europe have held the economy to growth rates below 3% in 2002-05. Due to higher growth across Europe, Austrian grew 3.3 percent in 2006. To meet increased competition from both EU and Central European countries, particularly the new EU members, Austria will need to continue restructuring, emphasizing knowledge-based sectors of the economy, and encouraging greater labor flexibility and greater labor participation by its aging population.

Geography Note: landlocked; strategic location at the crossroads of central Europe with many easily traversable Alpine passes and valleys; major river is the Danube; population is concentrated on eastern lowlands because of steep slopes, poor soils, and low temperatures elsewhere

Location: Central Europe, north of Italy and Slovenia

Natural Resources: oil, coal, lignite, timber, iron ore, copper, zinc, antimony, magnesite, tungsten, graphite, salt, hydropower

Geographic Coordinates: 47 20 N, 13 20 E

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