Introduction

The “basic facts” summarized below in table 16.1 demonstrate the economic similarities of these five small, rich, open economies. Three of them were at the heart of the drive toward economic unity that began in western Europe after World War II. Belgium and Luxembourg had already formed an economic union with a common currency in 1921, the Belgium–Luxembourg Economic Union, which was renewed in 1945 after the end of Nazi occupation. In 1947 the Netherlands signed a customs union agreement with the BLEU to form Benelux, the precursor of the European Economic Community's customs union, formed ten years later.

Meanwhile, Austria was incorporated into the Third Reich with the Anschluss of 1938, where it remained until the end of World War II. Until 1958 Austria was divided into four occupation zones by the Allied powers, with Vienna ruled by each on a rotating basis. Only in 1955 was a state treaty signed with the Allied powers that enabled Austria to re-emerge as a sovereign nation state. The condition written into the Austrian constitution that Austria maintain permanent neutrality, however, was essential to gain the approval of the Soviet Union. The desire of Austria to join the economic upswing of western Europe led to its joining the European Free Trade Association, even though its major trading partner continued to be West Germany. Soviet pressure against Austria joining the European Economic Community kept Austria from applying formally until after the Soviet regime had collapsed, in 1991.