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Austria and European Peace

February 23, 1934

Report Outline
Continuing Danger of the Austrian Situation
Parties and Politics in Postwar Austria
Struggle of Dollfuss Against Nazi Domination
Economic Dilemma of the Austrian City-State
Nazi Control as a Threat to Peace of Europe

Continuing Danger of the Austrian Situation

While calm has been restored in Austria following the disastrous conflict between the government and the Socialists in Vienna and other cities, that country still faces political and economic problems of great gravity. Upon the manner of their solution may rest not only the continued existence of Austria as an independent state but the peace of Europe. Since the future status of the Danubian republic vitally affects the interests of all the great continental powers, as well as of the small nations to the east, events in Vienna are being watched with concern in every capital. No one can predict with any certainty what may happen in Europe in the next few weeks or months, but the answer to peace or war may be given in Austria. That country has now become the greatest danger point on a continent which has been showing increasing signs of tension and where any untoward event may be the spark to set off a general conflagration.

Reduced by the peace treaties from an economically unified empire of over 30,000,000 people and a territory of 116,000 square miles to the equivalent of a topheavy city-state with a population of less than 7,000,000 and a territory of only 32,000 square miles, Austria has experienced a continuous struggle for existence during the last 15 years. Throughout that period it has been obliged to depend on foreign loans to balance its budget and maintain its national economy. Such assistance has been forthcoming for the reason that the former Allied powers could not contemplate with equanimity the probable consequences of its denial. Ninety-seven per cent of the people living within the present boundaries of Austria are German by race. Should they be absorbed within the Reich, the territory of Germany would stretch across Europe from the North Sea almost to the Adriatic, the western half of Czechoslovakia would be surrounded by Germany on three sides, and Berlin would be in position to exercise a dominant influence over all Central Europe and the Balkans. Such a development not only would threaten to cause further radical changes in the territorial settlements decreed by the peace treaties; it would strike a direct blow at French and Italian prestige in those regions and seriously weaken, if not destroy, the series of defensive security alliances built up by France since the war.

Dollfuss and Maintenance of Austrian Independence

Engelbert Dollfuss, Chancellor of Austria since May 20, 1932, was armed last March with emergency powers under which he and his cabinet have governed for a year without parliamentary interference. His vigorous efforts last summer to cope with a violent and persistent Nazi campaign directed from Germany won him the sympathy and cooperation of Great Britain, France, and Italy. With their consent the size of the Austrian army was increased late in August. To protect the frontier and maintain order within the country, however, Dollfuss placed increasing reliance on the Heimwehr, an irregular militia of reactionary tendencies financed by industrial, commercial, and banking interests. On September 20 he reorganized his cabinet and appointed as Vice Chancellor Major Emil Fey, commander of the Vienna Heimwehr.

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