The plans drawn up by the four Allies for the post-war period were based on the complete defeat of Hitler Germany. Austria was occupied by Allied troops, which divided the country into four zones. In the capital city, Vienna, the zones were partitioned according to district, while the inner city was administrated through a rota system.

Even before the war officially came to an end in May 1945, political parties had formed in Austria, which together with the federal provinces became the driving force behind the declaration of independence. In the eastern part of the country, the Soviets set up a government headed by former State Chancellor Karl Renner, which - albeit with circumstantial delays - also gained the approval of the Western Allies. The first tasks facing this provisional cabinet were to restore civilian life and to supply the population with provisions. With the support of the Allies a normal democratic system was soon put in place, and on November 25 1945 the first democratic elections for more than a decade were held.

Former Nazis were excluded from voting and put in denazification processes conducted by the Austrian authorities. A general reparation of the financial damages suffered, particularly by Jewish citizens, was gradually undertaken - between 1946 and 1949 seven restitution laws were enacted which referred to both tangible and intangible property that had come into the hands of the State. However, major reparation measures were implemented only during the past few years, one example being the agreement drawn up in year 2000 concerning voluntary Austrian payments to former victims of forced and slave labor, who were forced to work on the territory of the present-day Republic of Austria.

State Treaty and Neutrality

The first decade in the post-war history of Austria was characterized by attempts to achieve a state treaty restoring its sovereignty. Due to the generous assistance received under the Marshall Plan, the economic reconstruction of Austria forged ahead surprisingly fast. Informal institutions, such as that of "social partnership" (a negotiating body made up of representatives of employers and employees), were set up to secure social peace. During the reconstruction period, the system of coalition governments involving the two major parties, the Austrian People's Party (ÖVP) and the Socialist Party (SPÖ), enabled basic agreement to be reached regarding Austria's international orientation.

Nevertheless, in the wake of the East-West conflict, the negotiations for a state treaty did not bear fruit until 1954. After Stalin's death Austrian politicians brought the subject of neutrality into discussion and the Soviet Union signaled its fundamental readiness to sign such an agreement. In April and May 1955, Austria used this opportunity in Moscow and Vienna to negotiate a state treaty which finally restored Austrian sovereignty. After decades of war and hardship, the signing of the State Treaty on May 15 1955 in Vienna's Belvedere Palace was one of the most moving moments in Austrian history.

Once More a Player on the International Stage

Austria immediately took up its position within the international community. On December 15 1955 it joined the United Nations, a long-time aspired step. On October 26 1955 the Austrian National Council enacted a constitutional law guaranteeing the country's permanent neutrality. Together with the State Treaty, this law provided the legal framework for Austria's future foreign policy. Austria very quickly found a highly independent interpretation of its status as a neutral country. Its basic restriction to military neutrality while continuing to participate in international institutions can best be described as a "policy of non-intervention", which gained universal acceptance.

Joining the consistent economic upswing in Western Europe Austria signed a treaty with EFTA (European Free Trade Association) in 1960, which immediately met harsh comments from the Soviet Union as one of the signatory parties of the State Treaty.