Soviet Control Over Austria: Was It Real?

From 1945 to 1955, Austria was under military occupation by the four Allied powers: Britain, France, the U.S., and the USSR. The Soviets pushed the Nazis out of Austria in April 1945 and proceeded to loot and pillage the country. The Soviets' presence in Austria was marked by economic exploitation, with the expropriation of over 450 formerly German-owned businesses. The USIA (Administration for Soviet Property in Austria) controlled over 400 expropriated Austrian factories, transportation, and trading companies. The Soviets also operated the Soviet Military Bank, which tried but failed to obtain an Austrian banking license. The USIA employed around 60,000 people at its peak in 1951, but by 1955, the majority of these companies were close to bankruptcy. In May 1955, the Austrian State Treaty was signed, restoring Austria's sovereignty and freedom.

The Soviet Union's economic exploitation of Austria

Austria was occupied by the Allies from 1945 to 1955. During this time, the country was divided into four occupation zones, with the UK, the Soviet Union, the US, and France each controlling a portion. Vienna, the capital, was also subdivided, with the central district being collectively administered by the four powers.

The Soviets also targeted Austrian oil fields, placing them under Soviet administration and taking control of almost all Austrian oil production. Additionally, they imposed high occupation costs on the Austrian government, which further strained the country's economy.

The Soviet Union's economic policies in Austria had a significant negative impact. By 1955, many of the companies under Soviet control were close to bankruptcy due to a lack of investment and general neglect. The USIA, in particular, faced bankruptcy, and the cost of occupation became a burden for the Soviets. Ultimately, the Soviets withdrew from Austria in 1955, along with the Western Allies, after Austria promised to remain neutral in the Cold War.

In conclusion, the Soviet Union's economic exploitation of Austria during the Allied occupation had far-reaching consequences and contributed to the country's difficult economic situation in the post-war period.

The Administration for Soviet Property in Austria (USIA)

The Administration for Soviet Property in Austria, or USIA, was formed in June 1946 in the Soviet zone of Allied-occupied Austria and operated until the withdrawal of Soviet troops in 1955. It was a de facto state corporation that controlled over 400 expropriated Austrian factories and transportation and trading companies. USIA assets included formerly independent Austrian companies, factories once owned by German corporations, and former SS enterprises.

USIA was exempt from Austrian tariffs and taxation and could easily trade with Eastern Europe despite the Iron Curtain and Western trade embargoes. The extraterritorial corporation attempted to be self-sufficient and was weakly integrated with the rest of the Austrian economy. At its peak in 1951, the conglomerate employed around 60,000 people, or 10% of Austrian industrial labour.

USIA was initially managed by Red Army staff, but after 1949, they were replaced by trained industrial managers. The organisation was governed by a chief executive with three assistants for political, personnel, and commercial matters. The number of employees varied from 22,000 in 1946 to a peak of 60,000 in 1951 and down to 36,000 in 1955. A disproportionately high number of USIA staff were Austrian Communists, especially after the 1950 Austrian general strikes, when Communists were fired en masse from non-USIA businesses.

USIA accounted for only 5% of Austrian national output and 30% of the Soviet zone's output but possessed a significant or even monopolistic share in some industries: 60% in glass making, 43% in leather, and 40% in iron and steel. The USIA's assets were sold to the Austrian government for 150 million US dollars in 1955, and all written documentation of USIA disappeared.

The Austrian State Treaty

The basis for the treaty was the Moscow Declaration of 1943, in which the Allies agreed that Austria would be regarded as the first victim of Nazi aggression and treated as a liberated and independent country after the war. The treaty also provided for Soviet oilfield concessions and property rights of oil refineries in Eastern Austria, and the transfer of the assets of the Danube Shipping Company to the USSR.

The Austrian situation was unique in postwar Europe. In 1938, Austria had been the only nation to be annexed in its entirety by Nazi Germany, raising questions about the extent of the country's collaboration with the Nazis. At the Potsdam Conference in 1945, the Allies agreed to jointly occupy Austria in the postwar period, dividing the country and its capital, Vienna, into four zones, as they planned to do with Germany and Berlin. The Soviets demanded reparations from Austria, but this request was dropped due to the country's nonbelligerent status.

Negotiations over the final status of Austria began in 1947, but the breakdown of the wartime "Grand Alliance" and the emergence of the Cold War led to the Austrian occupation lasting far longer than anticipated. The principle sticking point during the 1947 negotiations was the issue of German assets and how much compensation the Soviet Union was entitled to take. The Soviet occupation forces had seized control of factories, railroads, oil, and shipping concerns, all of which had been under Nazi control at some point, and only offered to sell them back to the struggling Austrian provisional government at exorbitant prices.

The climate for negotiations improved with the death of Joseph Stalin in 1953 and the warming of relations known as the Khrushchev Thaw. Negotiations with the Soviet foreign minister, Molotov, secured the breakthrough in February 1955, and the Austrian State Treaty was signed on May 15, 1955, ending seventeen years of occupation by foreign troops. As promised, the newly independent nation declared and maintained its neutrality for the remainder of the Cold War.

The Soviet Union's political influence in Austria

Austria was never part of the Soviet Union, but it was occupied by the USSR from 1945 to 1955, along with the UK, the US, and France. During this time, the country was divided into four zones, with the Soviets occupying the east.

Secondly, the Soviets engaged in systematic sexual violence against women, repression against civilians, and plunder, which harmed the Red Army's reputation. This led to Moscow issuing an order forbidding violent interrogations in September 1945.

Thirdly, the Soviets expropriated and controlled hundreds of Austrian and formerly German-owned businesses through the Administration for Soviet Property in Austria (USIA), a conglomerate that employed around 60,000 people at its peak in 1951. The USIA controlled significant shares in industries like glass, leather, and iron and steel. It also managed the oil fields in Lower Austria.

Fourthly, the Soviets influenced the outcome of the 1945 elections by arresting two vocal anti-communists, the British and American troops having not yet arrived in Vienna. The election was a blow for the Communist Party of Austria, which received just over 5% of the vote.

Finally, the Soviets agreed to the Austrian State Treaty in 1955, which granted full independence to Austria on the condition of perpetual neutrality in the Cold War. The last occupation troops left in October 1955.

The Soviet Union's military presence in Austria

The Soviet Union's military occupation of Austria was marked by several key events and policies:

• Establishment of a Provisional Government: The Soviets installed a provisional federal government under the socialist politician Karl Renner, who had previously welcomed the annexation of Austria by Nazi Germany. Renner's cabinet included Austrian Communists in crucial positions, such as the Secretary of State of the Interior and the Secretary of State for Education. However, the Western Allies suspected the establishment of a puppet state and refused to recognize Renner's government.
• Reestablishment of Local Administrations: Soviet officers re-established district administrations and appointed local mayors, often following the advice of locals.
• Arrests and Interrogations: The Red Army and the NKVD (Soviet secret police) conducted arrests and interrogations of former Red Army men, Wehrmacht soldiers, and civilians. By May 23, 1945, they had arrested 268 former Red Army men, 1,208 Wehrmacht men, and 1,655 civilians.
• Combatting Desertion and Plunder: Throughout 1945 and 1946, Soviet commanders struggled to contain desertion and plunder by their troops. Austrian police records for 1946 indicate that "men in Soviet uniform," usually drunk, accounted for more than 90% of registered crimes.
• Sexual Violence: The Red Army engaged in systematic sexual violence against women, beginning in the first days and weeks after the Soviet victory. This harmed the Red Army's reputation, and on September 28, 1945, Moscow issued an order forbidding violent interrogations.
• Oil Fields and Industrial Expropriation: The Soviets assumed control over Austrian oil fields and expropriated hundreds of businesses, particularly in their occupation zone. These assets were amalgamated into the USIA (Administration for Soviet Property in Austria), a conglomerate of over 400 enterprises. The USIA controlled substantial shares of the glass, steel, oil, and transportation industries.
• Food and Supply Issues: During the occupation, food shortages and supply issues plagued both the Austrian population and the occupying forces. The Soviets demanded that local governments feed and clothe their troops, placing a significant burden on the war-ravaged country.
• Propaganda and Relations with Civilians: The Soviets issued propaganda directives to their troops, instructing them to respect Austrian traditions, families, and private property. However, tensions and conflicts between Soviet soldiers and Austrian civilians persisted.
• Withdrawal and Independence: In 1955, the Soviet Union withdrew its troops from Austria and recognized the country's independence. This followed negotiations and agreements, such as the Austrian State Treaty, which included Austria's promise of perpetual neutrality.

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