Introduction

In the overall context of Austria's economic relations with the Central European, East Central and South-East European socialist countries, the Soviet zone of occupation of Germany, and, from 1949 onwards, the German Democratic Republic (GDR) is a special case. This is true in the sense that Austrian–East German economic relations were not rooted in the specific economic links which had for centuries existed between Austria and the other Länder of the Habsburg Monarchy – links which, despite rather strong tendencies towards economic nationalism in the ‘successor states’ during the inter-war period, had never been completely severed.

Apart from that, Austrian–East German economic relations were shaped by four basic determinants. Firstly, both partners were relatively well-developed industrial countries. From this follows the fact that the ‘objective’ opportunities for co-operation on a technologically advanced level were very high; at least they were higher than the potential for co-operation between these two industrial countries on the one hand and the less industrialized or agrarian CMEA countries (with the exception of Czechoslovakia) on the other. Secondly, it was impossible to make the most of these opportunites because bilateral economic relations were impeded by ‘systemic conditions’: that is by the fact that a centrally planned and administered economy of the Soviet type established contacts with a (Keynesian) market economy. The inflexibilities inherent in centrally planned systems, especially the specific methods by which these economies organize their external relations (above all the foreign trade monopoly of the state and the inconvertibility of the currency), were somewhat obstructive to economic co-operation reaching beyond national boundaries.