Privatization

   Austria came away from its occupation after World War II with one of the most heavily nationalized and in-bred economies of noncommunist Europe. Not until the 1980s did the Vienna stock exchange become a useful provider of investment capital. State-owned banks lent to state-owned or state-dominated companies. In the 1980s, however, balance sheets of state-run industries grew alarmingly passive because of fiscal mismanagement, outright corruption, a redundant workforce, and competition abroad. Serious recession added to the dismal economic atmosphere, and privatization became an attractive alternative.

   Though recovery was underway by 1984 and 1985, the finances of nationalized Austrian heavy industries remained catastrophic. By the beginning of 1986, Austria’s major political parties had agreed on a partial privatization of nationalized industries. The Second Republic gradually began selling off its equities in these enterprises, at first as a way of raising revenue to keep them afloat. In the mid-1990s, the Austrian Industrial Management Corporation (ÖIAG), initially created to manage the country’s nationalized industries, transformed itself into a management agency to market government holdings in various enterprises. By 2000, the last state-owned bank was privatized. The venerable government tobacco monopoly went private in 2001; private television stations were allowed to enter the communications market in the same year.

   An especially emblematic case was the traditional postal service. In 1996, it was renamed the Austrian Postal and Telecommunications Corporation (Post & Telekom Austria AG), with its governance now conducted under private law. For the next 10 years, its many subsidiary enterprises were sold off, often in the face of protesting workers. In 2000, Austria Telekom shares were listed on the New York Stock Exchange. In 2006, the state divested itself of 49 percent of its equity in the postal service.