EU Pact Decision Exposes German-Austrian Rift

Not unlike Britain and the United States, Germany and Austria often seem to be two nations who share a common language but are divided on many other things. The depth of the divide between these two un-neighborly neighbors has been highlighted recently by the widening rift over Germany's compliance with rules governing the European Union's Stability Pact.

It’s a very special mixture of emotional and objective argumentation that explains why the Austrians have become Germany’s most vociferous critics concerning the EU Stability Pact. On the emotional level, Germans are viewed by Austrians as arrogant know-it-alls who look down on their alpine neighbors because of their own distinctive take on their shared language. Austrians also feel that they are underestimated by the larger and more powerful nation.

Vienna's long memory

Although the resentment towards the perceived superior attitude and mocking of dialect could be excused as grudges born from neighborly rivalry, there are more serious issues that stick in the collective Austrian craw.

Berlin’s support for the European Union sanctions brought against Vienna’s Center-Right government because of Jörg Haider (picture), the right-wing populist party leader, angered Austria. It continues to do so despite the official normalization of relations between the two countries. Austrians have a very long memory, it seems.

“Believe me, it is not forgotten," Austrian Chancellor Wolfgang Schüssel recently told reporters. We will always remember that.” His views are also supported by many people on the street. When asked about the sanctions, some even likened the act to interventionism. “It was an attempt to influence our national politics. It went too far,” said one. “If you are from Germany, you should clean up your own backyard. First take care of the problems in your own country,” said another.

With feelings running high over the border, any slip up on the Germans' part is seized upon in Austria with relish. The country’s leaders never miss an opportunity to point out Germany’s problems, which is even more satisfying at the moment as things in Austria are running relatively smoothly.

EU decision draws condemnation

So when EU finance ministers ignored the European Commission’s demands to punish France and Germany for borrowing too heavily and decided to suspend the sanctions mechanisms which could have brought heavy fines against Paris and Berlin for breaches of the euro-zone's Stability and Growth Pact, Austria was one of the first countries to vociferously condemn the actions.

A furious Austrian chancellor, Wolfgang Schüssel, said: "It cannot be that rules are set aside just because they affect the largest countries. I consider this a sin."

Finance Minister Karl-Heinz Grasser took the opportunity to reiterate the fact that Austria had rigorously applied the rules to keep its budget deficits down. “What European country can say of itself in a difficult economic situation, that it, first, straightened out its government finances and, second, kept them in order," he asked. "Austria can say that.”

“We had a balanced budget in 2001 and 2002 and we have more economic growth than other countries with excessive deficits,” Grasser added. “When you look at Germany and see more than four and a half million unemployed; when you see massive new debt mounting, then you see the financial policies of other countries -- be they Germany or France -- threatened with collapse.”

Fear of economic collapse

The Austrians are especially fearful of an economic collapse in Germany because more than 40 percent of Austria’s foreign trade -- some €75 billion ($88.6 billion) -- comes from their ailing neighbor. The signs are even more ominous due to the fact that business is already starting to suffer from the condition of the economy over the border.

It is no surprise that Wolfgang Schüssel remains unmoved in his conviction to force budget-breakers to follow the EU rules, repeatedly telling those who will listen that the breaking of the pact is “bad for the European currency and bad for European citizens because it ultimately endangers currency stability.”

Voice of the smaller nations

The Austrian Chancellor sees the pact discussion as a division of "us and them" -- the larger EU countries and the smaller ones. Schüssel makes no secret of his desire to be considered the spokesman for the smaller EU member states and increase his own political influence. Bearing in mind the EU’s imminent expansion to the East, Schüssel hopes that this growing stature aspirations could become a fact. The Stability Pact has given him a soap-box from which he can practice the necessary rhetoric and rally the smaller nations.

Schüssel’s message is that the lack of punishment handed out to pact offenders is just more evidence that EU rules apply only to the small and weak members while larger nations can simply do as they please. “These are the intentions of some larger countries that we refuse to accept," the chancellor said. "Our agreement would be necessary and the large nations will not get it.”

Germany and France, however, did not need Austria's support on Tuesday to avoid EU sanctions as enough other member states supported them instead.