Sputnik Escalates the Cold War
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Austrian State Treaty (15 May 1955)

Formal treaty establishing the Second Austrian Republic as an independent state. Despite Austria's participation on the German side during World War II, the Allies decided at the Yalta Conference in February 1945 to treat Austria as a liberated nation and not a defeated one when the war was over. It took more than a decade, however, to decide exactly what that meant. During that period, Austria remained divided and occupied among the four victorious Allied powers.

Although the Soviets demanded war reparations from Austria, they never considered Austria to be a necessary part of their postwar sphere of influence. The other Allies, on the other hand—and the United States and Britain in particular—viewed Austria's geopolitical position as an essential outpost in the Cold War. They accordingly made massive financial and military investments in the state during the decade of occupation. The Austrian government, led by Dr. Karl Renner and Leopold Figl, carefully and cleverly played upon the East-West divide to gain independence in return for a promise of neutrality in 1955.

The Austrian State Treaty, signed at the Belvedere Palace in Vienna on 15 May 1955, was one of the great achievements of Cold War diplomacy. It resolved a decade-old political and economic standoff among the Austrians, Soviets, and the remaining Allies through a series of resourceful compromises and demonstrated that peaceful coexistence between the Soviets and the West was indeed possible.

It was at the initiative of Soviet leader Nikita Khrushchev that the Austrian State Treaty took form. Once West German forces were incorporated in the North Atlantic Treaty Organization (NATO), Khrushchev saw little point in haggling over a divided Austria and instructed his foreign minister, Vyacheslav Molotov, to settle the issue for good. Austrian Chancellor Julius Raab was therefore invited to Moscow on 24 March 1955 to discuss the terms of independence.

Britain and the United States, however, feared that the Austrians would be lured or pressured into becoming a Soviet satellite or that a pending settlement in Austria would be used to draw the Germans out of NATO. But the Soviets were more interested in keeping Austria out of NATO and made generous concessions in return for an Austrian promise of armed neutrality. Without waiving reparations entirely, the USSR accepted a staggered payment schedule of $150 million, a ten-year agreement for oil deliveries from Austria, and a lump sum for the return of Austrian shipping installations.

Western diplomats made few changes to the Austro-Soviet proposal but convinced the Austrians to sign secret agreements protecting Western oil companies prior to the conclusion of the treaty. At the last minute, Figl maneuvered the Allied powers into deleting a clause holding Austria partly responsible for World War II. The treaty thus enshrined the myth of Austrian victimization that would persist until the 1986 Waldheim Affair forced a reexamination of Austria's past. It did not, however, necessarily enshrine Austrian neutrality, nor did the Allied powers guarantee it. Instead, on 26 October 1955, one day after the last Allied soldier left Austrian soil, the Austrian parliament passed a law making permanent neutrality a part of the constitution of the Second Republic.

Timothy C. Dowling

Further Reading
Brook-Shepherd, Gordon. The Austrians: A Thousand-Year Odyssey. New York: HarperCollins, 1997.; Carafano, James. Waltzing into the Cold War: The Struggle for Occupied Austria. College Station: Texas A&M Press, 2002.; Mück, Hugo. Die Zweite Republik [The Second Republic]. Vienna: Lind, 2004.

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