Hidden Hands and Cross-Purposes: Austria and the Irreconcilable Conflict between Neutrality and Market Laws

Abstract

Austria emerged in 1955 from a ten-year occupation administered by the four major powers of the successful anti-Third Reich coalition of World War II—France, the Soviet Union, the United Kingdom, and the United States—as a united, independent state. The 15 May 1955 State Treaty signed by these countries and Austria spared Austria the fate of Cold War division suffered by Austria's neighbor to the north (in the ultimate East-West breakdown of Germany's parallel postwar quadripartite occupation). Paving the way for Austria's good fortune was a political quid pro quo agreed between Austrian leaders and their Soviet counterparts in Moscow the previous April. In the 15 April 1955 Moscow Memorandum, Austria consented to becoming a permanently neutral state modeled on Switzerland. This neutrality precluded a possible Austrian membership in NATO in exchange for a long-delayed Soviet assent to an end of Austria's occupation regime with a concomitant abandonment of the Soviet occupation zone and the withdrawal of all occupation troops. After the completion of this withdrawal, a fully sovereign Austria made good on its pledge with the passage on 26 October 1955 of a constitutional law declaring Austria to be “permanently neutral” and foreswearing all military alliances.