818 Foreign Relations, 1958-1960, Volume IX



U.S. Policy Toward Austria (NSC 5603, dated April 7, 1956) in the light
of operating experience. They further believe there is no need for the
National Security Council to review the policy at this time and that there
are no developments of such significance as to warrant sending a report
to the National Security Council.
    2. The national parliamentary elections of May 1959 produced ap-
proximate equality between the Socialists and People's Parties as a re-
sult of gains by the former and losses by the latter. The new coalition
government under People's Party Chancellor Raab reflects this balance.
Another result of the election was that the Communists were eliminated
from representation in Parliament.
    3. So far there has been no basic change in Austria's policy of mili-
tary neutrality with its strong pro-Western overtones. Austrian interna-
tional conduct since 1955 has in practice been viewed by the Austrians in
terms of its consistency with a broader application of neutrality extend-
ing to many political questions. The Austrians have attempted since
1955 to balance acts favoring the West by scrupulous correctness and
adherence to their obligations to the Soviet Bloc, and by some actions
which have been widely interpreted as favoring the Bloc. Over the last
year or two the number and scope of actions favoring the Bloc have in-
creased somewhat. This tendency may flow from what the Austrian
Government may consider to be the growth of Soviet power vis-a-vis
the United States and from the increasingly active efforts of the USSR to
appear reasonable and in favor of peaceful co-existence. Austria may
also have been influenced by the fact that other powers, including the
United States, have been expanding their relations with the USSR and
the Bloc. An additional factor may be the desire of some pressure groups
in Austria to create an atmosphere more favorable to building up trade
with the East, which these groups see as offering attractive potential ex-
port possibilities at a time of sharpening competition and as a hedge
against possible future economic declines in the West.
    4. Two large rallies were held in Vienna in 1959. Partly as a result
of Soviet pressure, the Austrian Government in March 1958 agreed to
permit the Communist-dominated World Youth Festival to be held in
Vienna. It took place in July-August 1959; attendance was about 14,000.
The Communist organizers were handicapped by the boycott of the
Austrian press, the minimal official recognition, the relative unrespon-
siveness of the Austrian public, and the counter-activities of Austrian
and other Western youth organizations. Partly to counter-balance this
Festival, the Austrian Government allowed the Sudeten Germans to
hold a rally, which took place in May and was attended by about
300,000.