Background:
Once the center of power for the large Austro-Hungarian Empire,
Austria was reduced to a small republic after its defeat in World
War I. Following annexation by Nazi Germany in 1938 and subsequent
occupation by the victorious Allies in 1945, Austria's status
remained unclear for a decade. A State Treaty signed in 1955 ended
the occupation, recognized Austria's independence, and forbade
unification with Germany. A constitutional law that same year
declared the country's "perpetual neutrality" as a condition for
Soviet military withdrawal. This neutrality, once ingrained as part
of the Austrian cultural identity, has been called into question
since the Soviet collapse of 1991 and Austria's entry into the
European Union in 1995. A prosperous country, Austria entered the
European Monetary Union in 1999.