Allied-occupied Austria

Austria was occupied by theAlliesand declared independent fromNazi Germanyon 27 April 1945 (confirmed by theBerlin Declarationfor Germany on 5 June 1945), as a result of theVienna offensive. The occupation ended when theAustrian State Treatycame into force on 27 July 1955.
After theAnschlussin 1938,Austriahad generally been recognized as part of Nazi Germany. In November 1943, however, the Allies agreed in theDeclaration of Moscowthat Austria would instead be regarded asthe first victim of Nazi aggression—without denying Austria's role in Nazi crimes—and treated as a liberated and independent country after the war.
In the immediateaftermath of World War II, Austria was divided into four occupation zones and jointly occupied by the United Kingdom, the Soviet Union, the United States, and France.Viennawas similarly subdivided, but the central district was collectively administered by theAllied Control Council.
Whereas Germany was divided intoEastandWest Germanyin 1949, Austria remained under joint occupation of the Western Allies and the Soviet Union until 1955; its status became a controversial subject in theCold Waruntil the warming of relations known as theKhrushchev Thaw. After Austrian promises of perpetual neutrality, Austria was accorded full independence on 15 May 1955 and the last occupation troops left on 25 October that year.
At the 1943Moscow Conference, the Soviet Union, United States, and the United Kingdom had jointly decided that theGerman annexation of Austriawould be considered "null and void". As well, all administrative and legal measures since 1938 would be ignored. The conference declared the intent to create a free and independent Austria after the war, but also stated that Austria had a responsibility for "participation in the war at the side of Hitlerite Germany" which could not be evaded.
On 29 March 1945, Soviet commanderFyodor Tolbukhin's troops crossed the former Austrian border atKlostermarienberginBurgenland.On 3 April, at the beginning of theVienna Offensive, the Austrian politicianKarl Renner, then living in southernLower Austria, established contact with the Soviets.Joseph Stalinhad already established a would-be future Austrian cabinet from the country's communists in exile, but Tolbukhin's telegram changed Stalin's mind in favor of Renner.
On 20 April 1945, the Soviets, without asking their Western allies,instructed Renner to form a provisional government. Seven days later Renner's cabinet took office, declared the independence of Austria fromNazi Germanyand called for the creation of a democratic state along the lines of theFirst Austrian Republic.Soviet acceptance of Renner was not an isolated episode; their officers re-established district administrations and appointed local mayors, frequently following the advice of the locals, even before the battle was over.
Renner and his ministers were guarded and watched byNKVDbodyguards.One-third of State Chancellor Renner's cabinet, including crucial seats of theSecretary of State of the Interiorand theSecretary of State for Education, was staffed by Austrian Communists.The Western allies suspected the establishment of apuppet stateand refused to recognize Renner.The British were particularly hostile;even American PresidentHarry Truman, who believed that Renner was a trustworthy politician rather than a token front for the Kremlin, denied him recognition.However, Renner had secured inter-party control by designating two Under-Secretaries of State in each of the ministries, appointed by the two parties not designating the Secretary of State.
As soon as Hitler's armies were pushed back into Germany, theRed Armyand theNKVDbegan to comb the captured territories. By 23 May, they reported arrests of 268 former Red Army men, 1,208Wehrmachtmen, and 1,655 civilians.In the following weeks the British surrendered over 40,000Cossackswho had fled to Western Austria from Soviet authorities and certain death.In July and August, the Soviets brought in four regiments ofNKVD troopsto "mop up" Vienna and seal the Czechoslovak border.
Soviet commanders on the ground ordered the troops to stop as soon as they entered Austria. On April 4, 1945, the command issued a directive that was read to all soldiers on the front lines. The directive declared that Austria was Hitler's first victim and that theRed Armyhad entered the country to liberate it and annihilate theGerman Army. For years, it said,propaganda in Nazi Germanyterrorized Austrians with atrocities committed by Soviet soldiers. The directive called Nazi propaganda a lie and called on the military not to confuse Austrian civilians with German occupiers. The end of the directive reads, "be merciless towards German enslavers, but don't offend the Austrian population. Respect their traditions, families, and private property. Proudly carry the glorious title of a Red Army warrior . . . let your conduct cause respect everywhere for the Red Army."The Red Army lost 17,000 lives in theBattle of Vienna. Soviet troops engaged in systematicsexual violence against women, beginning in the first days and weeks after the Soviet victory. Repression against civilians harmed the Red Army's reputation to such an extent that on 28 September 1945 Moscow issued an order forbidding violent interrogations.Red Army morale fell as soldiers prepared to be sent home; replacement of combat units withIvan Konev'spermanent occupation forceonly marginally reduced 'misbehaviour'.Throughout 1945 and 1946, all levels of Soviet command tried, in vain, to contain desertion and plunder by rank and file.According to Austrian police records for 1946, "men in Soviet uniform", usually drunk, accounted for more than 90% of registered crime (in comparison, U.S. soldiers accounted for 5 to 7%).At the same time, the Soviet governors resisted the expansion and arming of the Austrian police force.
American troops, including the11th Armored Division, crossed the Austrian border on 26 April, followed by French and British troops on 29 April and on 8 May, respectively.Until the end of July 1945 none of the Western allies had first-hand intelligence from Eastern Austria (likewise, Renner's cabinet knew practically nothing about conditions in the West).
The first Americans arrived in Vienna in the end of July 1945,when the Soviets were pressing Renner to surrender Austrianoil fields.Americans objected and blocked the dealbut ultimately the Soviets assumed control over Austrian oil in their zone. The British arrived in September.
At the end of the war, theBritish Eighth Armymoved into Austria and became part of the occupation force. On 29 July 1945, the army was disbanded and its forces were used to form the commandBritish Troops Austria. The new command maintained the gold crusader cross insignia of the Eighth Army.
The Allied Council of four military governorsconvened for its first meeting in Vienna on 12 September 1945. It refused to recognize Renner's claim of a national government but did not prevent him from extending influence into the Western zones. Renner appointed vocal anti-communistKarl Gruberas Foreign Minister and tried to reduce Communist influence. On 20 October 1945, Renner's reformed cabinet was recognized by the Western allies and received a go-ahead for the first legislative election.
On 9 July 1945 the Allies agreed on the borders of their occupation zones.Movement of occupation troops ("zone swap") continued until the end of July.The French and American zones bordered those countries' zones in Germany, and the Soviet zone bordered futureWarsaw Pactstates:
In determining the occupation zones, the administrative changes made after the Anschluss were applied in the western zones (Steirisches Salzkammergut to Upper Austria and East Tyrol to Carinthia) and were disregarded in the Soviet zone (Vienna not enlarged and Burgenland re-established).
The election held on 25 November 1945was a blow for theCommunist Party of Austriawhich received a bit more than 5% of the vote. The coalition ofChristian Democrats(ÖVP) andSocial Democrats(SPÖ),backed by 90% of the votes, assumed control over the cabinet and offered the position ofFederal Chancellorto Christian DemocratJulius Raab.The Soviets vetoed Raab,because he had been a member of the austrofascistFatherland Frontduring the 1930s. Instead President Karl Renner, with the consent of parliament, appointedLeopold Figl, who was just barely acceptable to the Soviets.They responded with massive and coordinated expropriation of Austrian economic assets.
ThePotsdam Agreementallowed confiscation of "German external assets" in Austria, and the Soviets used the vagueness of this definition to the full.In less than a year they dismantled and shipped to the East industrial equipment valued at around US$500 million.American High CommissionerMark W. Clarkvocally resisted Soviet expansionist intentions, and his reports to Washington, along withGeorge F. Kennan'sThe Long Telegram, supported Truman's tough stance against the Soviets.Thus, according to Bischof, theCold Warin Austria began in the spring of 1946, one year beforethe outbreak of the global Cold War.
On 28 June 1946, the Allies signed the Second Control Agreement which loosened their dominance over the Austrian government. TheParliamentwasde factorelieved of Allied control. From now on, its decisions could be overturned only by unanimous vote by all four Allies.Sovietvetoeswere routinely voided by Western opposition.Over the next nine years the country was gradually emancipated from foreign control, and evolved from a "nation under tutelage" to full independence.The government possessed its own independent vision of the future, reacting to adverse circumstances and at times turning them to their own benefit.The first allied talks on Austrian independence were held in January 1947, and deadlocked over the issue of "German assets" in Soviet possession.
In late 1945 and early 1946 the Allied occupation force peaked at around 150,000 Soviet, 55,000 British, 40,000 American, and 15,000 French troops.The costs of keeping these troops were levied on the Austrian government. At first, Austria had to pay the whole occupation bill; in 1946 occupation costs were capped at 35% of Austrian state expenditures, equally split between the Soviets and the Western allies.
Coincidentally with the Second Control Agreement, the Soviets changed their economic policy from outright plunder to running expropriated Austrian businesses for a profit. Austrian communists advised Stalin to nationalize the whole economy, but he deemed the proposal to be too radical.Between February and June 1946, the Soviets expropriated hundreds of businesses left in their zone.On 27 June 1946, they amalgamated these assets into theUSIA, aconglomerateof over 400 enterprises.It controlled not more than 5% of Austrian economic output but possessed a substantial, or even monopolistic, share in the glass, steel, oil, and transportation industries.The USIA was weakly integrated with the rest of the Austrian economy; its products were primarily shipped to the East, its profits de facto confiscated and its taxes left unpaid by the Soviets. The Austrian government refused to recognize USIAlegal titleover its possessions; in retaliation, the USIA refused to pay Austrian taxes and tariffs.This competitive advantage helped to keep USIA enterprises afloat despite their mounting obsolescence. The Soviets had no intention to reinvest their profits, and USIA assets gradually decayed and lost their competitive edge.The Austrian government feared paramilitary communist gangs sheltered by the USIAand scorned it for being "an economy of exploitation in colonial style".The economy of the Soviet zone eventually reunited with the rest of the country.
South Tyrolwas returned to Italy. The "thirty-second decision" of theCouncil of Foreign Ministersto grant South Tyrol to Italy (4 September 1945) disregarded popular opinion in Austria and the possible effects of aforced repatriationof 200,000 German-speaking Tyroleans.The decision was arguably motivated by the British desire to reward Italy, a country far more important for thecontainmentof world communism.Renner's objections came in too late and carried too little weight to have effect.Popular and official protests continued through 1946. The signatures of 150,000 South Tyroleans did not alter the decision.South Tyrol is today an Italian autonomous province (Bolzano/Bozen) with a German-speaking majority.
In 1947, the Austrian economy, including USIA enterprises, reached 61% of pre-war levels, but it was disproportionately weak in consumer goods production (42% of pre-war levels).Food remained the worst problem. The country, according to American reports, survived 1945 and 1946 on "a near-starvation diet" withdaily rationsremaining below 2000 calories until the end of 1947.65% of Austrian agricultural output and nearly all oil was concentrated in the Soviet zone, complicating the Western Allies' task of feeding the population in their own zones.
From March 1946 to June 1947, 64% of these rations were provided by theUNRRA.Heating depended on supplies of German coal shipped by the U.S. on lax credit terms.A 1946 drought further depressed farm output andhydroelectric powergeneration. Figl's government, the Chambers of Labor, Trade and Agriculture, and theAustrian Trade Union Federation(ÖGB) temporarily resolved the crisis in favor of tight regulation of food and labor markets. Wage increases were limited and locked to commodity prices through annual price-wage agreements. The negotiations set a model ofbuilding consensusbetween elected and non-elected political elites that became the basis of post-war Austrian democracy,known asAustrian Social PartnershipandAustro-corporatism.
The severe winter of 1946–1947 was followed by the disastrous summer of 1947, when the potato harvest barely reached 30% of pre-war output.The food shortages were aggravated by the withdrawal of UNRRA aid, spiraling inflation, and the demoralizing failure of State Treaty talks.In April 1947, the government was unable to distribute any rations, and on 5 May Vienna was shaken by a violent food riot.Unlike earlier protests, the demonstrators, led by the Communists, called to curb the westernisation of Austrian politics.In August, a food riot inBad Ischlturned into apogromof local Jews.In November, the food shortage sparked workers' strikes in British-occupiedStyria.Figl's government declared that the food riots were a failed communistputsch, although later historians said this was an exaggeration.
In June 1947, the month when the UNRRA stopped shipments of food to Austria, the extent of the food crisis compelled the U.S. government to issue $300 million in food aid. In the same month Austria was invited to discuss its participation in theMarshall Plan.Direct aid and subsidies helped Austria to survive the hunger of 1947 while simultaneously depressingfood pricesand discouraging local farmers, thereby delaying the rebirth of Austrian agriculture.
Austria finalised itsMarshall Planprogram in the end of 1947 and received the firsttrancheof Marshall Plan aid in March 1948.Heavy industry (or what was left of it) was concentrated aroundLinz, in the American zone, and in British-occupiedStyria. Their products were in high demand in post-war Europe. Naturally, the administrators of the Marshall Plan channeled available financial aid into heavy industry controlled by the American and British forces.American military and political leaders made no secret of their intentions:Geoffrey Keyessaid that "we cannot afford to let this key area (Austria) fall under the exclusive influence of the Soviet Union."The Marshall Plan was deployed primarilyagainstthe Soviet zone but it was not completely excluded: it received 8% of Marshall plan investments (compared to 25% of food and other physical commodities).The Austrian government regarded financial aid to the Soviet zone as a lifeline holding the country together. This was the only case where Marshall Plan funds were distributed in Soviet-occupied territory.
The Marshall Plan was not universally popular, especially in its initial phase.It benefited some trades such as metallurgy but depressed others such as agriculture. Heavy industries quickly recovered, from 74.7% of pre-war output in 1948 to 150.7% in 1951.American planners deliberately neglected consumer goods industries, construction trades, and small business. Their workers, almost half of the industrial workforce, suffered from rising unemployment.In 1948–1949, a substantial share of Marshall Plan funds was used to subsidize imports of food. American money effectively raisedreal wages: the grain price was about one-third of the world price, while agriculture remained in ruins.Marshall Plan aid gradually removed many of the causes of popular unrest that shook the country in 1947,but Austria remained dependent on food imports.
The second stage of the Marshall Plan, which began in 1950, concentrated onproductivityof the economy.According toMichael J. Hogan, "in the most profound sense, it involved the transfer of attitudes, habits and values as well, indeed a whole way of life that Marshall planners associated with progress in the marketplace of politics and social relationships as much as they did with industry and agriculture."The program, as intended by American lawmakers,targeted improvement in factory-level productivity, labor-management relations, free trade unions and introduction of modern business practices.TheEconomic Cooperation Administration, which operated until December 1951, distributed around $300 million in technical assistance and attempted steering the Austrian social partnership (political parties, labor unions, business associations, and government) in favor of productivity and growth instead of redistribution and consumption.
Their efforts were thwarted by the Austrian practice of making decisions behind closed doors.The Americans struggled to change it in favor of open, public discussion. They took a strong anti-cartelstance, appreciated by the Socialists, and pressed the government to remove anti-competition legislationbut ultimately they were responsible for the creation of the vast monopolistic public sector of the economy (and thus politically benefiting the Socialists).
According to Bischof, "no European nation benefited more from the Marshall Plan than Austria."Austria received nearly $1 billion through the Marshall Plan, and half a billion in humanitarian aid.The Americans also refunded all occupation costs charged in 1945–1946, around $300 million.In 1948–1949, Marshall Plan aid contributed 14% of national income, the highest ratio of all involved countries.Per capita, aid amounted to $132 compared to $19 for the Germansbut Austria also paid morewar reparationsper capita than any otherAxis stateor territory.Total war reparations taken by the Soviet Union including withdrawn USIA profits, looted property and the final settlement agreed in 1955, are estimated between $1.54 billion and $2.65 billion(Eisterer: 2 to 2.5 billion).
The British had been quietly arminggendarmes, the so-calledB-Gendarmerie, since 1945 and discussed the creation of a proper Austrian military in 1947.The Americans feared that Vienna could be the scene of anotherBerlin Blockade. They set up and filled emergency food dumps, and prepared to airlift supplies to Viennawhile the government created a backup base inSalzburg.The American command secretly trained the soldiers of an underground Austrian military at a rate of 200 men a week.The B-Gendarmerie knowingly hiredWehrmachtveterans andVdUmembers;thedenazificationof Austria's 537,000registered Nazishad largely ended in 1948.
Austrian communists appealed to Stalin to partition their country along the German model, but in February 1948Andrei Zhdanovvetoed the idea:Austria had more value as a bargaining chip than as another unstable client state.The continuing talks on Austrian independence stalled in 1948 but progressed to a "near breakthrough" in 1949: the Soviets lifted most of their objections, and the Americans suspected foul play.The Pentagonwas convinced that the withdrawal of Western troops would leave the country open to Soviet invasion of theCzechoslovak model. Clark insisted that before their departure the United States must secretly train and arm the core of a future military. Serious secret training of the B-Gendarmerie began in 1950but soon stalled due to US defense budget cuts in 1951.Gendarmes were trained primarily as an anti-coup police force, but they also studied Soviet combat practice and counted on cooperation with theYugoslavsin case of a Soviet invasion.
Although in the fall of 1950 the Western powers replaced their military representatives with civilian diplomats,strategically, the situation became gloomier than ever. TheKorean Warexperience persuaded Washington that Austria might become "Europe's Korea"and sped up rearmament of the "secret ally".International tension was coincident with a severe internal economic and social crisis. The planned withdrawal of American food subsidies spelled a sharp drop inreal wages. The government and the unions deadlocked in negotiations, and gave the communists the opportunity to organize the1950 Austrian general strikeswhich became the gravest threat since the 1947 food riots.The communists stormed and took overÖGBoffices and disrupted railroad traffic but failed to recruit sufficient public support and had to admit defeat.The Soviets and the Western allies did not dare to actively intervene in the strikes.The strike intensified the militarization of Western Austria, with active input fromFranceand theCIA.Despite the strain of the Korean War, by the end of 1952 the American "Stockpile A" (A for Austria) in France and Germany amassed 227 thousand tons of materiel earmarked for Austrian armed forces.
The death ofJoseph Stalinand theKorean Armistice Agreementdefused the standoff, and the country was rapidly, but not completely, demilitarized. After the Soviet Union had relieved Austria of the need to pay for the cost of their reduced army of 40,000 men,the British and French followed suit and reduced their forces to a token presence.Finally, the Soviets replaced their military governor with acivilian ambassador. The former border between Eastern and Western Austria became ademarcation line.
ChancellorJulius Raab, elected in April 1953, removed pro-Western foreign minister Gruber and steered Austria to a more neutral policy.Raab carefully probed the Soviets about resuming the talks on independence,but until February 1955 it remained contingent on a solution to the larger German problem. The Western strategy of rearming West Germany, formulated in theParis Agreement, was unacceptable to the Soviets. They responded with a counter-proposal for a pan-European security system that, they said, could speed up reunification of Germany, and again the West suspected foul play.Eisenhower, in particular, had "an utter lack of confidence in the reliability and integrity of the men in the Kremlin... the Kremlin is pre-empting the right to speak for the small nations of the world".
In January 1955, Soviet diplomatsAndrey Gromyko,Vladimir SemenovandGeorgy Pushkinsecretly advisedVyacheslav Molotovto unlink the Austrian and German issues, expecting that the new talks on Austria would delay ratification of the Paris Agreement.Molotov publicly announced the new Soviet initiative on 8 February. He put forward three conditions for Austrian independence: neutrality, no foreign military bases, and guarantees against a newAnschluss.
In March 1955, Molotov clarified his plan through a series of consultations with ambassadorNorbert Bischoff: Austria was no longer hostage to the German issue.Molotov invited Raab to Moscow for bilateral negotiations that, if successful, had to be followed by a Four Powers conference. By this time Paris Agreements were ratified by France and Germany, although the British and Americans suspected a trapof the same sort thatHitlerhad set forSchuschniggin 1938.Anthony Edenand others wrote that the Moscow initiative was merely a cover-up for another incursion into German matters.The West erroneously thought that the Soviets valued Austria primarily as amilitaryasset, when in reality it was a purely political issue.Austria's military significance had been largely devalued by the end of theSoviet-Yugoslav conflictand the upcoming signing of theWarsaw Pact.
These fears did not materialize, and Raab's visit to Moscow (12–15 April) was a breakthrough. Moscow agreed that Austria would be free no later than 31 December.Austrians agreed to pay for the "German assets" and oil fields left by the Soviets, mostly in kind;"the real prize was to be neutrality on the Swiss model."Molotov also promised the release and repatriation ofAustrians imprisoned in the Soviet Union.
Western powers were stunned. British diplomat and signatory to the treaty,Geoffrey Wallingerreported to London that the deal "was far too good to be true, to be honest".But it proceeded as had been agreed in Moscow and on 15 May 1955Antoine Pinay,Harold Macmillan, Molotov,John Foster Dulles, and Figl signed theAustrian State Treatyin Vienna. It came into force on 27 July and on 25 October the country was free of occupying troops.The next day, Austria's parliament enacted aDeclaration of Neutrality, whereby Austria would never join a military alliance such as NATO or the Warsaw Pact, or allow foreign troops be based within Austria. The Soviets left in Vienna the largeSoviet War Memorialand to the new government a symbolic cache of small arms, artillery, andT-34tanks; the Americans left a far greater gift of "Stockpile A" assets.The only political spokesperson who was publicly upset about the outcome wasWest GermanChancellorKonrad Adenauer, who called the affairdie ganze österreichische Schweinerei("the whole Austrian scandal") and threatened the Austrians with "sending Hitler's remains home to Austria".
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Military Commander
High Commissioners