Österreich und die DDR 1949–1990: Politik und Wirtschaft im Schatten der deutschen Teilung ed. by Maximilian Graf (review)

This book not only traces the history of relations between two countries that were occupied by the Allied powers at the end of World War II but also sheds much broader light on the history of the Cold War.

After years of meticulous archival research, the young Austrian historian Maximilian Graf from the Austrian Academy of Sciences and the University of Vienna has produced a first-rate book (based on his award-winning Ph.D. dissertation) that deserves international recognition. The book makes a major contribution to the history of the two Germanys during the Cold War and provides fascinating evidence about the complex network of relations involving Austria and the other neutral European states.

From the time the German Democratic Republic (GDR, the Communist state in the east) was founded in 1949, it was keenly interested in being diplomatically recognized by Austria. However, these hopes went unfulfilled even after Austria regained its full sovereignty under the Austrian State Treaty of 1955. Austrian officials had no interest in risking a break of relations with the Federal Republic of Germany (FRG). The FRG's Hallstein Doctrine formed the framework for Austria's relations with the GDR. Still inexperienced in the policy of neutrality and not wanting to provoke Moscow, "Austria from now on had to perform a balancing act between the protection of its own interests and the required solidarity with the FRG" (p. 111). The Austrian government was interested in developing economic relations with the GDR, but at the outset its main focus was on the Austrians who lived in the GDR and who were increasingly used as a bargaining chip by the ruling East German Socialist Unity Party (SED).

Because the East German archives provide little information about the early years, Graf is not able to present new findings on the debate about the so-called Stalin Note of March 1952 that is still frequently discussed in German historiography. When discussing the Austrian State Treaty, Graf, like others before him, highlights the SED's lavish public praise of the Soviet Union's "peace policy" but offers no new insights behind the scenes. On other levels, however, Graf provides important evidence that Soviet leaders did not regard neutrality based on the Austrian model as an option for solving the German question.

Graf's most revealing and enlightening findings come in the second part of the book. He contends that the GDR would have been insolvent as early as 1982 if the Austrian government had not agreed to provide further loans worth billions (before the GDR received "Strauss loans" from the FRG). By the end of 1981, private Western creditors had stopped lending to the GDR because of the Polish crisis (p. 499). Poland, Romania, and Cuba were sliding toward insolvency, and the West regarded the GDR as the next candidate for bankruptcy. As a result, Austrian banks took a reserved position toward the GDR as well. Secret talks between diplomats from the GDR and Austria in Vienna followed. Subsequently, Kreisky instructed the banks to "change their stance toward the GDR." He assumed the United States was exerting influence on Austrian banks to torpedo Austrian "Ostpolitik" (pp. 501–502). In October 1982, urgent requests from East Berlin to Vienna had made very clear that the GDR's ability to pay was in great danger if Austria would not grant a major loan. "Austria's problem was," says Graf, "that money was taken up in the West, loan-financed goods and financial credits were given to the East, which means that western money was actually transferred to the East" (p. 512). Kreisky stuck to his belief that it would have been a mistake if they "believed that the East could now be brought to its knees financially." He was convinced that the East Germans would "receive the support they needed from the Soviet Union" (p. 512). Finally, Kreisky needed large...