Neutrality and Federalism: The Two Pillars of Success

Text: Žikica Milošević

Austria is a small country, but it has been incredibly influential in the world since the end of World War II; in fact, since the end of the occupation of Austria in 1955 and the adoption of the Constitution. As always, it’s all about having a good foundation and good infrastructure.

Since the country was established as a federation, the possibility of the capital city, which was too huge for the country, ‘swallowing up’ the rest of Austria was drastically decreased. Because Vienna is a neutral country, it did not have to spend too much on the army (and unlike Yugoslavia, which feared that everyone would attack it, Austria was convinced that no-one would attack them). Instead, the country behaved like Finland and Sweden and was focused on cooperating with everyone. Austria was the closest to the Eastern bloc and served as a junction between East and West, both economically and politically. Summits were frequently held here and Austrian companies, as we have mentioned many times, were the first to arrive in the Eastern European markets, while the superpowers hesitated to invest farther. Austria got the best of both worlds, thanks to the good foundations of its “house”.


Austrian neutrality has been a fundamental element of Austrian foreign policy since it was passed on October 26, 1955 – the day on which, for the first time, there were no occupying troops in the country after the war. Since October 26, October 26th has been Austria’s national holiday. Austria’s neutrality was de facto restricted by the EU accession on January 1, 1995, and by other new constitutional provisions that have been passed since then. This helped the country to insure itself against the division experienced by Germany, and to allow itself the privileged position that Finland also won for itself. The Soviets gave up expanding to Austria, and so did the Westerners. Capitalism had a human face, workers’ rights were respected, and the army was not in the service of attack, but only defence. An ideal position for any country!


The federalization of a small country? Aren’t we afraid that someone will break away? Of course not, providing things go well. It was because other Austrians realized that Vienna could not govern the rest of Austria centrally (they called Vienna “Wasserkopf” or “Huge Head”) and they were aware that the country would fall into an ungovernable state. Minorities like Slovenians and Croats in Carinthia and Burgenland did not sound good after another war that did not go well, while the plebiscite in Carinthia went well after the First World War there were fears that Carinthia could disappear into the “Slovenian corridor”, that stretched from Slovenia to the Czech Republic, and that the country could be separated from Hungary. That is why Croats and Slovenes are guaranteed every possible right in those two provinces, and why the country is decentralized. But in which way?

The Republic of Austria consists of nine states (German: Bundesländer): Vienna, Burgenland, Carinthia, Upper Austria, Lower Austria, Vorarlberg, Tyrol, Salzburg and Styria. Even in German-speaking provinces, there was danger of breakaway. For instance, Vorarlberg, the only province that does not speak the Austro-Bavarian dialect but the Swiss-Alemannic, had the referendum after the Great War in which it wanted to join Switzerland. Although, the majority voted „yes“, Vorarlberg never became a part of the Swiss Confederation. With all that in mind, Austria has managed to tailor a federation on a rather small territory that worked out great. But not everyone thinks so. Some complain that Austria is the case of “centralized decentralization” or “federation without federalism”, but like any system, it is worth preserving and needs to be repaired.

Many NATO supporters complain that neutrality is bad. Many proponents of centralization complain that administration is too expensive. The price of not having regionalization and neutrality can be quite steep, and it was the balance that has made the voice of a small country like Austria heard and upheld and which regionalization system is copied all over the world. This is why Vienna is still the centre of Europe, as it was many years ago.

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