Currency

   After rocky fiscal experiments with paper money throughout most of the 19th century, the Habsburg Empire moved to the gold standard in 1892. The long-circulating gulden was replaced by crowns and heller, with 100 heller equal to 1 crown. Various names for smaller units of the gulden were used colloquially into the 1930s. The imperial crown inflated wildly at the end of World War I. To bring some order into its desolate economy, the First Austrian Republic introduced another monetary unit, the schilling, made up of 100 groschen. Though Austrian material conditions improved very little, the new coinage took hold and solidified very quickly. The Anschluss of 1938 brought the German Reichsmark into Austria at a very unfavorable rate for the schilling. But Austria’s fiscal independence was short lived; on 17 March 1938, the Nazi regime transferred all the gold and currency reserves in the Austrian National Bank to Germany’s national bank in Berlin.

   With World War II over, Austria quickly restored the schilling as its official medium of exchange in 1945. The Reichsmark and the Allied military schilling disappeared very fast. By 1947, in an effort to curb inflation, Austrian authorities sharply reduced the exchange rate for the schilling, a step that annoyed the powers of the occupation but had the desired fiscal effect. Nevertheless, even when the currency rose considerably in value, the government kept very tight controls on the amount of money in circulation. By 1959, the schilling was completely backed either in gold or foreign hard currencies. It continued to rise in value in relationship to the dollar and other hard currencies, weathering various waves of inflation from the 1960s to the end of the 20th century.

   The nationalist Freedom Party of Austria raised great objections to abandoning the schilling for the euro in 1997. By 1999, however, Austria, as a member of the European Union, had adopted the euro as its legal tender, though not yet in cash transactions. As of 2002, the euro was the currency to be used in all areas of Austrian economic life.