Bustling Austria a conduit to the East for Western way of life
History echoes throughout this vibrant city, not only in its castles and museums, but in its economy. The Austro-Hungarian Empire ended with World War I. But the economic advantages of trade among neighboring nations in Central Europe remains strong.
''There is a nostalgic longing for the monarchy in Hungary,'' noted Dr. Herbert Salcher, Austria's finance minister, in an interview here.
In fact, he adds, Austria's relations with Hungary are better than during the era of the Habsburgs, when the Hungarians felt suppressed by the empire. ''At present we are some kind of symbol of hope.''
Austrian construction companies built several of the leading modern hotels in Budapest. Austria is Hungary's largest noncommunist customer after West Germany. Austrian television reaches almost to Budapest in Hungary (and it can even be received in parts of that city with a high aerial) and in a good chunk of Czechoslovakia.
''This is the show window for the West to the East,'' Dr. Salcher says. ''We export the Western way of living to the East, which has its political consequences.''
Since Austria regards itself as a center for East-West trade, it laments any renewal of the cold war.
''We are the first to feel any tendencies toward East-West tension,'' the finance minister said. ''We think there is no alternative to detente. And a policy of detente without economic relations will not be successful.''
Another echo from the past is the nation's system of ''social partnership.'' During the days of the first Austrian republic, between 1918 and 1938, various classes and parties were so far apart that they fought a short but bitter civil war in February 1934. Under the rule of Hitler, however, the leaders of both the middle-class democratic parties and the workers' movement found themselves detained in the same concentration camps.
After the war, the resulting friendships and the wish to end the occupation by the four major powers (the United States, the Soviet Union, the United Kingdom, and France) prompted the two sides to put rivalries aside and work together.
One result was a coalition government of the People's Party (Christian democrats) and the Socialist Party (social democrats) that lasted until 1966.
Another was nationalization of large industrial corporations and the major banks that owned them. The coalition government wanted to avoid any takeovers by the Allies, particularly the Soviets, of companies that had been built up rapidly during the war by the National Socialists and were considered German property.
Those companies are still held by the government, and some have become a major financial burden on the budget, particularly the steel industry. As in most industrial nations, employment in the Austrian steel industry has been shrinking. Unlike France or Belgium, however, there have been no demonstrations or riots by steelworkers losing their jobs.
Finance Minister Salcher attributes this to three things. First, the government has been ''careful'' in restructuring the steel industry because of its location in a depressed area. ''There is no place (another plant) for workers to move to,'' he said. Second, the leading company, VOST-Alpine, has been relatively successful in selling steelmaking equipment abroad as well as steel. Third, government officials - the federal chancellor, the state secretary , the finance minister, and others - have spent considerable time talking to steelworkers on the job, as well as to management.
''We just don't sit at our desk,'' he said. ''We have meetings with workers of individual companies. Sometimes the atmosphere is bad, because of cuts in fringe benefits and jobs. But we talk to one another. The Austrian politicians of my generation are still suffering from the trauma of between the wars, when the unemployment rate reached 33 percent. We lost our jobs, our hope, our dignity, and then our democracy.''
Critics say the government has not been drastic enough in cutting losses at the nationalized companies, that the West German steel industry is far ahead of Austria's in lowering production costs. Dr. Salcher says that the government subsidies ''are not terribly expensive.'' This year the budget calls for government contributions of some $900 million to the steel industry for its capital expenditures and some $55 million of interest subsidies.
Austria's postwar coalition also produced ''Proporz.'' This is, in a sense, the ultimate in patronage, providing for a division of jobs on an organized basis between members of, primarily, the Socialist or People's Parties. The purpose was to avoid the bitter battles for power and position that troubled Austria in the Great Depression.
Creditanstalt-Bankverein, the nation's largest nationalized bank, is ''black, '' that is, controlled by members of the People's Party, though Socialists also get their share of directorships and other positions. Osterreichische Landerbank , which is also some 60 percent owned by the government and is the second-largest commercial bank, is ''red'' - that is, regarded as the Socialist bank.
Such party divisions run through other nationalized companies, the trade unions, the civil service, and even the radio and television stations. Government-owned apartments go to party friends. ''You need to have a party membership to make a career, get a job,'' said one observer, exaggerating somewhat.
Critics charge that ''Proporz'' results in major inefficiencies, since party membership may overrule competence and result in the overmanning of companies and the civil service. They maintain that class divisions in the younger generation, although remaining, are less bitter, and that ''Proporz'' has outlived its purpose.
The ''social partnership,'' which one banker termed ''a democracy of organized interests,'' is an organized system of cooperation among the employers , trade unions, other workers (required to belong to the Austrian Chambers of Labor), and agriculture. It has kept wage raises relatively modest; strikes are almost nonexistent (seconds per year per worker on average); and thus domestic stability has been maintained. Political decisions tend to be made first within the ''social partnership'' in cooperation with the Cabinet and then rubber-stamped by a weak parliament, whose members lack any staff.
A younger generation of leaders regards this system as old-fashioned and wrong. ''This bargaining style will have significant drawbacks for Austria,'' one banker said. The Freedom Party, the junior member of the government coalition, either wants more influence in the partnership or will force more real decisions into parliament. Over the next several years, the system will be altered as older politicians retire - but with the Austrian preference for avoiding conflict, it will occur peacefully.