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

UNCLAS SECTION 01 OF 03 VIENNA 001484 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR EUR/AGS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV AU
SUBJECT: 2005 - Austria's Year of Commemoration 
 
 
SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY. 
 
¶1.  (SBU) SUMMARY: In the "Jubilee Year" of 2005, Austria 
is observing a number of significant anniversaries.  Most 
prominent are the 50th anniversary of the Austrian State 
Treaty and the 60th anniversary of the reestablishment of 
the Austrian Republic after the end of World War II. 
Austria also celebrates the 10th anniversary of its EU 
membership and looks toward its EU Presidency in the 
first half of 2006.  As it commemorates these events, and 
shapes its strategies for the EU Presidency, Austria is 
seeking confirmation of its role as hub at the center of 
Europe, and as a bridge between cultures and peoples 
promoting peace and stability, especially in Eastern and 
Southeastern Europe.  Chancellor Schuessel's center-right 
coalition has made important progress on economic, 
structural and administrative reform since it took office 
in 2000, but still confronts the need for further 
modernization.  End Summary. 
 
The State Treaty: Highlight of A Year of Commemorations 
--------------------------------------------- ---------- 
 
¶2.  (SBU) As it looks back on its post-World War II 
history, Austria is celebrating various anniversaries in 
2005, the highlight being the 50th anniversary of the 
signing of Austria's State Treaty on May 15.  The State 
Treaty reestablished Austria as a sovereign state after 
10 years of occupation by the four Allied Powers, the 
United States, the Soviet Union, Great Britain and 
France.  The State Treaty is one of the foundations of 
Austria's modern identity and is a symbol of Austrian 
freedom and independence.  The State Treaty was the 
result of years of tough negotiations among the four 
powers and between Austria and the Soviet Union. 
Austrians consider this "miracle of 1955" to be a notable 
achievement of Austrian diplomacy.  They see it primarily 
as having spared Austria from a Germany-type division 
into occupation zones and a tense existence on the front 
lines of the Cold War.  While the Treaty now serves 
principally as an historic document, its provisions on 
the status of Austria's ethnic minorities in Austria are 
still relevant, constituting the fundamental guarantee of 
the ethnic groups' rights. 
 
Neutrality 
---------- 
 
¶3.  (SBU) Austrian neutrality was a condition the Soviet 
Union imposed for the conclusion of the State Treaty.  A 
few months following the signing of the State Treaty, 
Austria passed a constitutional law declaring itself 
neutral in perpetuity.  Neutrality has lost some of its 
relevance since the end of the Cold War and Austria's 
accession to the EU and participation in NATO's 
Partnership for Peace.  Several provisions now allow 
participation in military actions under UN or EU 
mandates.  However, remembrance of the horrors and 
hardships of the Nazi and postwar eras has given 
neutrality the aura of a nation-defining myth which large 
sections of the public still cherish.  As neutrals, the 
Austrians were different from their (capitalist) West 
German or (Communist) East German cousins.  Somewhat 
illogically, Austrians often credit their neutrality, 
rather than their geographical and ideological closeness 
to the Western alliance, with maintaining Austria's peace 
and security through the Cold War. 
 
Austria's International Identity 
-------------------------------- 
 
¶4.  (SBU) Located in the center of Europe, Austria is a 
hub for relations with the formerly Communist East.  The 
importance of this location increased as its Eastern 
neighbors joined the EU en masse on May 1, 2004. 
Austria's pre-World War I ties to Southeastern Europe as 
the former center of the Habsburg Empire have imbued 
Austria with a sense of mission to help promote stability 
in the region.  In order to foster reform in these 
countries, especially the war-torn Western Balkans, 
Austria strongly advocates the aspirations of the entire 
region to take part in European integration and 
eventually to accede to the European Union.  Austria 
perceives itself as having a vocation to act as a 
mediator in resolving regional conflicts, such as in 
Kosovo.  Austria also has important economic interests in 
the region.  It is among the top investors in 
Southeastern Europe, and its banking institutions, in 
particular, have a growing role in the region. 
 
¶5.  (SBU) Among Austria's initiatives for closer 
relations with Eastern and Southeastern Europe is its 
"Regional Partnership" with Slovakia, the Czech Republic, 
Slovenia, Hungary and Poland.  In 2004, the Partnership 
drafted a Kosovo concept paper which included proposals 
for minority rights, decentralization and protection of 
religious sites. 
 
2006 EU Presidency 
------------------ 
 
¶6.  (SBU) During its EU Presidency in the first half of 
2006, Austria plans to focus its efforts on the Balkan 
countries.  Austria is a strong advocate of beginning EU 
accession negotiations with Croatia, and also plans to 
promote EU memberships for Bosnia-Herzegovina, Macedonia 
and Albania.  Austria also wants to see Serbia- 
Montenegro, including Kosovo, join the EU.  Austria is 
therefore thinking of preparing a Balkans conference in 
2006 in cooperation with the UN - if those interested in 
the region, including the U.S. and Austria's EU partners, 
consider that conditions are right for progress on the 
thorny status questions. 
 
Domestic Situation 
------------------ 
 
¶7.  (SBU) Austria has a center-right government led by 
Chancellor Wolfgang Schuessel of the conservative 
People's Party (OVP).  Schuessel concluded a coalition 
with the controversial right-wing populist Freedom Party 
(FPO) in 2000, and renewed this coalition in 2003 
following the 2002 parliamentary elections.  The 
governing coalition has implemented an impressive list of 
items on its reform agenda, ranging from changes in the 
pension system to macroeconomic structural improvements, 
tax cuts and significant privatization measures. 
However, the government still has some business to 
finish, including continued rightsizing in the public 
sector, simplifying and streamlining the social welfare 
system, further labor market reforms, and implementing 
the EU's ten-year economic growth agenda, known as the 
"Lisbon Program." 
 
¶8.  (SBU) The coalition is not stable at the moment.  In 
spring 2005, the Freedom Party fractured, with its 
national leadership (spearheaded by the controversial 
Governor of Carinthia, Joerg Haider) leaving to form a 
new grouping, the "Alliance Future Austria" (BZO).  The 
BZO ministers have expressed their strong commitment to 
continuing the coalition with Schuessel's OVP until the 
next regular parliamentary elections, scheduled for fall 
¶2006.  Still, observers have noted increased instability 
as a result of the FPO split, fueling widespread 
speculation about the possibility of early elections in 
the fall of 2005. 
 
Shadows of the Past 
------------------- 
 
¶9.  (SBU) In the midst of this political turbulence, two 
older, hard-core nationalist members of the largely 
powerless Upper House of Parliament made inflammatory 
comments questioning the existence of the Nazi gas 
chambers and complaining of post-war "persecution" of 
Nazis by the Allies.  These outbursts raised a storm of 
public protest from across the political spectrum. 
Austria's entire political leadership, including the FPO 
and BZO, joined in calls for the two deputies to resign. 
 
¶10. (SBU) COMMENT:  In this anniversary year, Austrians 
are recalling the suffering the country both experienced 
and inflicted during the Nazi era.  Just one week before 
the May 15 observances, at the May 8 ceremony 
commemorating the 60th anniversary of the liberation of 
Mauthausen concentration camp by American forces, the 
clear message of the many Austrian dignitaries present 
was "never forget".  Austrian Cardinal Christoph 
Schoenborn recalled characterized Mauthausen as a place 
that became "hell on earth" for seven years.  President 
Fischer summoned Austrians to confront their history and 
be vigilant, stressing that "looking the other way is not 
the answer.  The memory of evil is to be our shield 
against evil."   Austrians are also remembering the time 
of deprivation they lived through immediately after World 
War II.  Austrians are honoring the determination of the 
hard-working generation that rebuilt the country's 
infrastructure and economy, thereby laying the foundation 
of Austria's modern prosperity.  However, Austrians are 
still mindful of the extensive assistance they received 
in this effort from the U.S., notably under the Marshall 
Plan.  While Austria has been neutral in a military sense 
since 1955, there has been no doubt that in terms of 
political freedoms and its economic system, Austria has 
been firmly rooted in the West. 
 
BROWN