The Second Austrian Republic
After Germany was defeated in 1945, Austria was again declared a republic, but it was not independent. The United States, Great Britain, France, and the Soviet Union divided the country into four zones, each occupied by one of the four Allied powers.
The second republic suffered from postwar economic chaos, much as the first republic had after World War I. With foreign aid, especially from the Marshall Plan (European Recovery Program), Austria's economy recovered from the effects of World War II. In 1955 the armies of the occupying powers withdrew, and the four zones were reunited into one fully independent nation. Austria agreed that it would not seek union with Germany and that it would be neutral in its foreign policy.
Austria became a member of the United Nations in 1956. Although its traditional orientation was toward Western Europe, Austria continued to maintain friendly relations with the Soviet bloc. Because of its neutrality and its strategic location between East and West, Austria eventually became an international diplomatic center. Headquarters of several United Nations organizations were established in Vienna.
Throughout the 1960's, Austria had one of the fastest-growing economies in Europe, and living standards rose greatly. Austria joined the European Free Trade Association (EFTA) in 1960. Austria's ties with western Europe were strengthened in 1973 when EFTA allied with what is now the European Union to lower trade barriers. Meanwhile, in 1971 the Socialist party won control of the government with the first absolute majority in the parliament of any party since the founding of the republic. The party experienced setbacks in 1978 and 1980 when its proposal to construct Austria's first nuclear power plant was defeated first in a national referendum and then in parliament. In 1983 the party lost its majority and a coalition government was formed.
In 1986 Kurt Waldheim was elected president of Austria. The Austrian elections received worldwide attention because of allegations that Waldheim had committed war crimes during World War II. He served as president until 1992. Meanwhile in 1989, because of democratic revolutions in Hungary and Czechoslovakia, Austria's borders with those nations, closed for nearly 40 years, were reopened. In 1995 Austria became a member of the European Union. The far-right Freedom Party joined Austria's coalition government in 2000. In response, the countries of the European Union imposed diplomatic sanctions for several months.
In elections in 2002, the Freedom Party entered into a coalition government led by the People's Party. The Social Democratic Party, led by Alfred Gusenbauer, won elections in 2006. In January 2007, the Social Democratic Party and the People's Party formed a coalition government, and Gusenbauer became chancellor.
