SKOPJE, Macedonia, Nov. 26 (UPI) -- Harry Potter would surely have enrolled. A school for wizardry has just opened in Austria in the forbidding mountains around Klagenfurt. The apprentices will be granted a sorcerer's diploma upon completion of their studies. This is a wise move. Austria may need all the witchcraft it can master in the next few years.
Chancellor's Wolfgang Schoessel's conservative People's Party convincingly won the elections on Sunday with more than 42 percent of all votes cast. In the process, it trounced Jorg Haider's much-decried far right outfit, the misnamed Freedom Party, which lost a staggering two-thirds of all its supporters. Schoessel may now feel that, thus humbled, the Freedom Party may constitute a more reliable and less erratic partner in a future coalition government.
The first signs are not encouraging, though. Haider resigned from the governorship of the province of Carinthia and then retracted his resignation, all in the space of 24 hours. In yet another xenophobic outpouring, he accused the European Union for his political near death experience. This contrasts sharply with Schoessel's staunch pro-European stance. Austria is the most avid proponent of EU enlargement.
Austria is uneasily located at the heart of Europe, flanked by Italy and Germany on the one side and by Slovakia, the Czech Republic, Hungary and Slovenia on the other. It is a natural bridge between prosperous Brussels and impoverished Tirana, between a towering Germany and a cowering Serbia, between the Balkans and the Central Europe. In its former incarnation as the Hapsburg Empire, Austria ruled all these regions.
It still virtually controls the critical Danube route -- the riparian exit for many of the landlocked countries of southeastern Europe. Its neutrality, its EU membership, banking secrecy, business tradition, affluence (average annual income per capita is about $26,000), multilingualism, plurality of cultures and stable currency made it the natural hub for multinationals eyeing the territories of the former Soviet bloc. Novartis Generics, for instance, is a subsidiary of the Swiss pharmaceuticals giant Novartis. But it is headquartered in Austria. It has just concluded the purchase of the Slovenian generic drugs company, Lek.
Vienna hosts many international organizations, such as the Organization for Security and Cooperation in Europe, the International Atomic Energy Agency and OPEC -- the Organization of Petroleum Exporting Countries. It is also the pivot of Europe's organized crime and espionage. Albanian drug dealers mix well with Ukrainian and Moldovan human traffickers and Russian KGB agents turned weapons smugglers.
Austria is schizophrenic -- staid and inertial at home, it is an aggressive risk-taker abroad. For four decades, everything -- from wage increases to the most inconsequential governmental sinecure -- was determined by the two big parties in the infamous "Proporz" system.
A carefully balanced arrangement of partisan monopolies and cartels stifled the economy. Local commercial radio was first introduced only six years ago and a private national television channel only in 2000. The banks set rates and fees in the monthly meetings of the Lombard Club, castigated by the European Union as a pernicious trust. Disgruntled citizens blamed this cozy, bureaucracy-laden, atmosphere of greed and cronyism for the signal failure to cope with the floods that ravaged the country a few months ago.
The Schoessel government pursued privatization, deregulation and budget discipline. This business-friendly attitude sustained the economy in a difficult global recessionary environment. Companies in virtually all sectors of the economy -- from Telekom Austria to Erste Bank -- beat analyst expectations and disclosed robust profit figures, rising equity and declining debts.
Gross domestic product is expected, by the Economist Intelligence Unit, to grow by more than 2 percent next year. Inflation averages less than 2 percent and the budget deficit -- 0.1 percent of GDP last year -- is likely to reach a manageable 1.5 percent. Imports will grow by 1 percent and exports by double that. When in 2004 much postponed tax reforms kick in, the economy is expected to revive.
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