Austria 783



added his gratuitous and completely distorted public reference to his
"protest" against U.S. Air Force overflights. There are many other
evi-
dences of this newfound era of Soviet-Austrian cordiality: The steady
stream of two-way visits, four Soviet Ministers since May and the pend-
ing visits-invitations already accepted-of President Schaerf and De-
fense Minister Graf to Moscow. There was further Schaerf's statement in
May that Austrian neutrality is "absolute" and a "fundamental
rejection
of any military alliance, jealous protection of political independence,
avoidance of a one-sided stand in foreign power conflicts", to which
he
added that at no time since conclusion of the State Treaty have the Sovi-
ets tried to influence Austria's attitude. Perhaps the most recent and
startling example is Vice Chancellor Pittermann's statement to David
Wainhouse that the Austrian people (which I do not believe) are begin-
ning to say that the Soviet has given Austria ten million dollars (through
the recent dubious oil deal) whereas the United States is taking away
five million dollars for the persecutee Jewish claimants. (Airgram G-120
of September 12).1 There is likewise Raab's expected early visit to
Prague to see President Siroky, his decline of Siroky's earlier invitation
being thereby reversed, almost solely because the Russians had asked
him to, and for the purpose, to quote Raab's words, "of breaking down
the iron curtain". To a growing belief that Russians are human, decent
responsible people with whom one can do business, there is added the
constant pressure especially with falling exports-of Austrian indus-
trialists who have glowing illusions of exports to the East, whether it be
to China or to Russia and the European satellites. And Raab himself re-
portedly said regarding a possible Soviet credit: if Nasser could accept
help from both East and West, Austria could do the same. (My Airgram
G-1 of July 3.)2
    Along with this new discovery of Soviet respectability there is a cer-
tain fear and timidity of the consequences of offending the Russians. A
very active and able Soviet ambassador is busily cultivating both the
stick and the carrot theory; while flattering Raab in particular as the true
statesman of Europe, he makes clear to others the dangers of too close
association with the West. As set forth in my Airgram G-53 of August 7
and in Airgram G-96 of August 29,3 there is a disturbing tendency on
the part of Austrian officials to think of Austria's position vis-a-vis



    1 G-120 from Vienna reported a conversation between Wainhouse and Pittermann
of September 10 in which several subjects were discussed, among them compensation
of
persecutees under Article 26 of the Austrian State Treaty. (Ibid., 763.00/9-1258)
    2 G-1 from Vienna reported a discussion between Matthews and Kreisky
in which
the major topic was the Soviet offer to extend financial credit to Austria.
(Ibid.,
863.10/7-358)
    3Neither printed. (Ibid., 863.10/8-758 and 863.10/8-2958)