This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 VIENNA 001312 
 
SIPDIS 
 
STATE FOR EB/IFD/OIA, EUR/ERA, AND EUR/AGS 
 
E.O. 12958: N/A 
TAGS: PREL ECIN ECON ETRD AU EUN
SUBJECT: AUSTRIANS SKEPTICAL AFTER 10 YEARS OF EU 
MEMBERSHIP 
 
 
Summary 
------- 
¶1.  A recent poll by the Austrian Association for 
European Politics (OGE) revealed that the Austrian public 
remains highly skeptical of the EU.  A significant 
majority of Austrians do not believe EU membership has 
brought the benefits they expected, such as higher 
growth, lower inflation, and reduced crime rates.  An OGE 
official concluded the overwhelming "yes" vote in the 
1994 membership referendum represented a peak in pro-EU 
sentiment.  In response to the OGE poll, the Austrian 
National Bank (ANB) characterized EU membership as 
positive from an economic standpoint.  The OGE poll 
indicated that various factors contributed to the 
negative view: weak association with a European identity; 
a general distrust of Brussels-generated policies, which 
Austrian media and politicians often exploit; and 
lingering resentment at sanctions the EU imposed on 
Austria in 2000.  End Summary. 
 
 
Austrians Highly Skeptical of EU 
-------------------------------- 
¶2.  Ten years after accession, Austrians remain highly 
skeptical of the EU, according to a recent poll by the 
non-partisan Austrian Association for European Politics 
(OGE).  OGE Secretary General Gerhard Bauer opined that 
the 67% vote for EU membership in 1994 was the peak of 
"EU-phoria" in Austria.  Bauer noted Austrians' negative 
views of the EU were somewhat surprising given that 
Austria is a highly integrated EU member.  Economic data 
confirms the benefits of EU membership, and no political 
party questions EU membership. 
 
 
Poll Results - Perceptions Lag Behind Reality 
--------------------------------------------- 
¶3.  The OGE poll asked Austrians what they had expected 
from EU membership and whether membership had fulfilled 
these expectations.  The results are astonishingly 
negative.  Sixty-nine percent of respondents expected 
improved economic growth from membership, but only thirty- 
one percent believed the EU had met that goal.  Forty-six 
percent expected lower inflation, whereas only twelve 
percent agreed the EU had helped reduce inflation.  Fifty- 
one percent expected the EU would successfully combat 
crime, but a mere thirteen percent believe the EU has 
succeeded in this area.  Asked whether Austria or 
Switzerland had fared better since 1995, 46% choose 
Switzerland, 23% Austria, 11% saw no difference, and 20% 
had no opinion. 
 
 
The Economic Reality - Overall Positive 
--------------------------------------- 
¶4.  In response to the OGE poll, Austrian National Bank 
Vice Governor Wolfgang Duchatczek said that economic 
reality does not support the population's skepticism. 
Duchatczek added that from an economic standpoint, 
Austria's EU accession is a tremendous success story. 
The 2004 accession of ten new member states brought 
additional benefits and opportunities for Austria. 
 
¶5.  Duchatczek noted that Maastricht criteria had given 
the GoA the impetus to reduce the budget deficit and 
public debt, as well as to implement overdue structural 
reforms.  Consumer inflation averaged 1.7% annually 
during 1995-2004 compared to 2.8% in 1985-1994.  After EU 
accession, growth in exports led to a diminishing trade 
deficit, culminating in a trade surplus in 2002.  FDI in 
Austria and Austrian FDI abroad has boomed, particularly 
Austrian FDI in the new member states in Central Europe. 
Although Austria's unemployment rate of 3.9% in 1995 had 
risen to 4.5% by 2004, Austria consistently has one of 
the lowest rates amongst the EU-15.  Nevertheless, 
stiffer competition in several sectors following 
accession (e.g., the food processing industry and the 
freight forwarding sector) forced restructuring and 
disproportionate job losses in affected sectors. 
 
 
Reasons for Skepticism 
---------------------- 
¶6.  The OGE findings, according to Bauer, reflect 
sentiments, emotions and bias.  Moreover, the high share 
of "no opinion" in all categories signals a lack of 
information about the EU.  The poll confirms the result 
of another OGE study from October 2004, which also 
revealed an ambivalent public perception of the EU and 
growing skepticism.  The 2004 poll cited several reasons 
for the skepticism: weak association with a European 
identity; general distrust of EU policies, which the 
media and politicians often exploit; and a lingering 
resentment towards the EU for imposing sanctions on 
Austria in 2000 in response to the inclusion of the 
Freedom Party in the governing coalition. 
 
 
A Former Commissioner's View 
---------------------------- 
¶7.  In an April 16 press interview, former Austrian EU 
Commissioner Franz Fischler attributed Austrians' 
increasing skepticism about the EU to emotions. 
Austrians, according to Fischler, fear the speed of 
enlargement, can no longer comprehend the "EU project," 
and feel at the mercy of political concepts with no idea 
where the journey will end.  The EU, in Fischler's 
opinion, needs to clarify its grand strategy, develop its 
democratic structures, and promote a European identity. 
 
 
Comment 
------- 
¶8.  Austria has indeed reaped tremendous economic 
benefits from EU membership and recent enlargement. 
Politically, membership secured Austria a front seat in 
Europe's integration and gave it co-decision rights in 
all areas.  Enlargement placed Austria in the center of 
the EU geographically, providing Austrian financial and 
commercial interests additional opportunities.  Despite 
these tangible benefits, sentiments and emotions on a 
whole range of issues - immigration, crime, lack of an EU 
identity - will continue to drive ordinary Austrians' 
perspectives on the EU. 
 
BROWN