Austria, in German, Osterreich, is a small republic in the heart of Europe, the surviving nucleus of the once massive Austro-Hungarian Empire. It still retains much of the imperial heritage, particularly its cultural tradition.
As the German name, meaning "eastern state", suggests, Austria originated as an eastern outpost of the medieval German empire. It served as a bastion of civilized Europe against Slav and Magyar incursions, and later as the bulwark of Western Christendom against the Ottoman Turks. It first rose to power under Babenberg rule, and continued to grow under Hapsburg rule from 1278 to 1918. In the 16th century the Hapsburg Empire ruled the Netherlands, Spain, much of Italy and the Americas and Austria itself. This international empire gave the country, and in particular the capital, Vienna (Wien), a cosmopolitan character it still retains.
The modern state was created in the dissolution of the empire at the end of World War I, in the Treaty of St Germain (1919). Hungary broke free in 1918, and the predominantly Slav states of Czechoslovakia and Yugoslavia were created. The province of South Tirol, with its Austrian culture and German speaking population, was lost to Italy, whose frontier was thus advanced to the Brenner Pass. Italy also gained the port of Trieste, Austria's outlet to the Adriatic and the Mediterranean. The loss of Bohemia and Moravia to Czechoslovakia was particularly serious, for these were partly industrialized provinces with rich agricultural resources. From Hungary, Austria received the province of Burgenland.
What emerged from this upheaval was a small and impoverished republic with resources far too slender to sustain its resplendent capital city. Inevitably Austria suffered from acute economic depression between the two world wars. The country also found itself sandwiched between fascist Italy and Nazi Germany, and in March 1938 it was forcibly incorporated into Hitler's Third Reich, a move welcomed by many in the face of the economic collapse. So it remained until liberated by the Allies in 1945.
Allied forces (Russian, British, American and French) remained in occupation until 1955, when a treaty reestablishing an independent and democratic republic was signed.
This was followed in the same year by an Austrian declaration of permanent neutrality by which Austria is pledged "to refrain from joining any military alliance and will not allow the maintenance by a foreign power of any military bases on her territory". This policy has been scrupulously observed, but Austria's natural sympathies with the West have been reflected in her membership of the Council of Europe (1956), and more recently by moves towards a special relationship with the European Economic Community, though its neutrality apparently prevents full membership.