AUSTRIA IN THE FIRST COLD WAR, 1945-55 COLD WAR HISTORY SERIES General Editor: Saki Dockrill. Senior Lecturer in War Studies, King's College, London

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Gunter Bischof AUSTRIA IN THE FIRST COLD WAR, 1945-55 The Leverage of the Weak

Donette Murray KENNEDY, MACMILLAN AND NUCLEAR WEAPONS

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Customer Services Department, Macmillan Distrihution Ltd Houndmills. Basingstoke. Hampshire RG2 I 6XS. England Austria in the First Cold War, 1945-55

The Leverage of the Weak

Gunter Bischof Associate Professor of History Universiry of New Orfea11s First published in Great Britain 1999 by MACMILLAN PRESS LTD Houndmills, Basingstoke. Hampshire RG2 I 6XS and London Companies and representatives throughout the world

A catalogue record for this hook is available from the British Library. ISBN 978-1-349-40570-1 ISBN 978-0-230-37231-3 ( eBook) DOI 10.1057/9780230372313

First published in the United States of America 1999 by ST. MARTIN'S PRESS, INC., Scholarly and Reference Division, 175 Fifth Avenue, New York, N.Y. 10010 ISBN 978-0-312-22020-4 Library of Congress Cataloging-in-Publication Data Bischof. Giintcr, 1953- Austria in the first Cold War, 1945-55 : the leverage of the weak I Giintcr Bischof. p. cm. - (Cold War history J Includes bibliographical references and index. ISBN 978-0-312-22020-4 (cloth) I. Austria-Foreign relations-1945-1955. ~ Cold war. 3. Austria-Politics and government-1945- 4. National security• -Austria-History-20th century. 5. Security. International. 6. Wori<.l politics-1945- I. Title. II. Series. DB99. l.B57 1999 327.436'009'045-dc2 I 98-49492 CIP © Giinter Bischof 1999 Softcover reprint of the hardcover 1st edition 1999 978-0-333-72547-4 All rights reserved. No reproduction, copy or transmission of this publication 111ay be 111ade without wrillen per111ission.

No paragraph of this publication 111ay be reproduced. copied or transmitted save with written per111ission or in accordance with the provisions of the Copyright. Designs and Patents Act 1988. or under the tcr111s of any licence permitting li111ited copying issued by the Copyright Licensing Agency. 90 Tottenham Court Road. London WI P OLP.

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This book is printed on paper suitable for recycling and made from fully 111anagcd and sustained forest sources. 10 9 8 7 6 5 4 3 2 08 07 06 05 04 03 02 01 ()() 99 To Melanie This page intentionally left blank Contents

List 11{ Ta hies IX

Pre{ace and Acknowledgements x

List o{Ahhreviations XVI

Introduction

The Austrians' Role and Allied Planning during the Second World War 7 No Indigestion: The Anschluss 7 Perpetrators and Victims: Austrians in the Second World War 13 Between Responsibility and Rehabilitation: Allied Planning for Postwar Austria 20

2 The Anglo-Soviet Cold War over Austria, 1945/6 30 The Rape of Austria: Liberation Soviet-style 30 The Looting of Austria: The Soviets and Austrian Reparations 36 The Showdown: British Containment of Soviet Action 43

3 The Creation of Austrian Foreign Policy, 1945/6 52 The Agenda: Inventing a Usable Past 52 The Campaign: Selling a Usable Past 60 Whither Austria? Between East and West 67

4 Austrian Economic Malaise: Soviet-American Cold War over Austria, I 946/7 78 The Take: Soviet Economic Pressure and the Origins of the Cold War in Austria 78 The Dilemma: Austrian Economic Problems 88 The Response: Washington and Austrian Economic Recovery 93

5 In the Shadow of Germany: the Militarization of the Cold War in Austria, I 948-52 104 A Treaty: Austrian Treaty Negotiations in the Shadow of Germany 105

Vil Vlll Contents

No Treaty: The Communist Threat and the Militarization of Austria l l l A Short Treaty') The Ice Age of the First Cold War 123

6 After Stalin's Death: "Peaceful Coexistence" and the Conclusion of the Austrian Treaty, 1953-5 130 Peaceful Coexistence') The Western Response to Stalin's Death 131 No Coexistence: The Berlin CFM Meeting and the Demise of Austrian Treaty Diplomacy 137 The Leverage of the Weak: The Culmination of Austro-Soviet Bilateral Treaty Diplomacy and the Conclusion of the Austrian Treaty 142

Conclusion 150

Notes 157

Select Bih/iogmphY 216

Index 233 List of Tables

1 Austrian "reparations" to the Soviet Union, 1945-64 87 2 Number of machine tools before, during and after the war 88 3 Official daily rations for normal consumers, 1945-8 89 4 Number of displaced persons/refugees in Austria, 1945-55 92 5 Some basic economic indicators, 1947-9 93 6 The "Westernization" of Austria's trade structure after the Second World War 97 7 American financial aid to Austria, 1945-55 102 8 Per-capita distribution of Marshall Aid among ERP-recipient countries 102

Map 1 Austria, 1945-55: Zones of Allied Occupation 50

IX Preface and Acknowledgements

[0/ur i'iew of' the past that tt·as actually experienced is influenced by the past as it came to he remembered. reconstructed, and sometimes, f(1r ideo• logical purposes. im·ented. One r!f' the duties of' a historian is to separate the past as it 11·asfiw11 all the superimpositions of' imagination. 1

During the 1986 presidential campaign Austria's image was rocked by a great debate over conservative candidate Kurt Waldheim's selective memory of his sol• diering record in the Second World War. Austrians elected Waldheim their presi• dent but their cherished image of having been Hitler's '"first victim" was ruined. Waldheim's pained professions of just having '"done his duty" rang hollow in the face of revelations about his military service in the Balkans. one of the most cruel theatres of the war where the German Wehrmacht routinely committed war crimes against civilians. Not a war criminal himself, he was "'guilty by association" with a criminal organization.2 Waldheim's memory lapses came to stand as a symbol for Austria's own highly selective memory about its wartime record. While official versions of the past still stressed the myths of Austria as victim and a nation resisting the Nazis, historians increasingly revealed the complicity of many Austrians in Nazi war crimes. After the jolting debates over Waldheim. the acceptance of a complex mix of Austrian victims and perpetrators during the war has produced a more jagged but accurate version of the historical truth. In Peter Henisch 's revealing novel on the Waldheim fiasco. Stein's Paranoia, the fictional character Clarissa used the apt image that only slight tectonic shifts easily revealed these hidden layers of the Austrian past barely buried under the surface.3 Meanwhile the Swiss and the Swedes are going through similar tectonic shifts that reveal deeper layers of complicity among these neutral countries in helping the Nazis store away their ill-gotten gains.4 Again. dearly embraced national mythologies make way for a complex past peopled with real people - both bystanders and perpetrators. The hibernating record of the Second World War at last is coming to light among these neutral European nations with their carefully cultivated false notions of innocence. These debates about Austria's amnesia concerning its Second World War past were usually devoid of the historical context. It is little known that the wily founding fathers of the Second Austrian Republic im·ented a version of history that would liberate them from the burdens of the past. They abided by Winston Churchill's famous dictum ''history will be kind to me for I intend to write it".' It shielded them from paying for the role numerous Austrian perpetrators played in the Hitlcritc war of aggression and extermination. unloading it all on Germany. The first postwar Austrian Government. the provisional regime headed by the crafty old Chancellor Karl Renner. used the Allied Moscow Declaration to formulate

x Preface and Acknowledgements XI

the legal "occupation doctrine" of Austria as v1ct1m. It was designed to shield Austria from paying costly reparations to countries destroyed by the Nazi aggres• sors and restitutions to Jews. "Austria as victim" would also retrieve the gold stolen by the Nazis. The occupation doctrine was constructed to give the country a short occupation and a quick peace treaty. It was destined to extricate the painful memory of the war from the complicity in a hideous race war against legions of innocent people. The international debate about Waldheim and Austria's Second World War record was even more devoid of the larger context of postwar international politics, namely the Cold War in Austria. The Allied powers liberated Austria at the end of the war. As part of the dismemberment of the Third Reich they reconstituted it as an independent country. But Austrians had fought on the side of Germany throughout the war. Therefore the four major powers occupied Austria and initially subjected it to a quadripartite regime of total control over the country's future. Similar to Germany, denazification and re-education became crucial tasks, yet were soon abandoned for more important geopolitical reasons. As in divided Germany, East and West soon clashed over what kind of "democracy" to impose without tearing the country apart. The Western powers unenthusiastically bought into the Austrians' interpretation of their Second World War past to save the country both from the perceived Soviet imposition of "people's democracy" and/or home-made communist subversion. To make the postwar anti-communist coalition government politically stable and the country economically viable the Western powers came to accept Austria's benign version of the past. Since Austria was in a sensitive geostrategic location, it became more important for the Western powers to secure Austria for the West than to destabilize it by purging its Nazis. The Soviet Union never considered Austria a necessary part of its postwar security sphere. Stalin's Kremlin made the Austrians pay a heavy price for their contribution to the Nazi spoliation of the Soviet Union. The Soviets interpreted the Moscow Declaration in their own way and squeezed a maximum of repara• tions out of their Austrian zone. They ignored Austrian professions of innocence and readily used denazification as a political football, frequently reminding the Austrian Government of its tepid purge to hold up progress on the Austrian treaty. The Kremlin policies towards Austria ran parallel to their German policies, and Stalin held Austria hostage to the resolution of the German question. Only after the dictator's death, and the failure of Soviet German policy, did the new leader• ship in the Kremlin separate Austria from the German question and allow Austria to become independent but neutral. Meanwhile the Americans made a huge investment in postwar Austria to save it from communism and integrate it into the West. Austrian politicians inces• santly harangued Washington with exaggerated tales of the "communist threat". The Americans were receptive to it and poured as much money into Austria as the Soviets took out in reparations. US aid first fed the starving Austrians and then helped reconstruct the Austrian economy with Marshall aid. In the Xll Prefi1ce and AcknoH'ledgements

"remilitarization" of the Cold War during the Korean War, Washington also secretly remilitarized the Austrian "Alpine fortress". The Americans re-armed Western Austria, trained and equipped its post-treaty Army so it could contain the domestic threat of subversion and hopefully join NATO. The West thus went along with Austria's priority list, in which political and economic integration into the West came before moral integration and a thorough purge of Austria's Nazi detritus and the many "brown" fellow-travellers. During its occupation decade the iron curtain - that powerful Cold War symbol dividing Europe with a Chinese Wall - cut right through Austria. Ever since it came into existence as a state after the First World War, Austria was shaped by international politics in its explosive strategic location where the Germanic world rubbed against the Slavic one. The entire geology of these various domestic and international tectonic layers constituting the historical context of the Waldheim debate and the postwar trajectory of Austria's role in the international arena needs to be laid open. The Austrians did not dare to tackle thorough denazification because it would have threatened to revive the dreaded prewar civil war among the rival political camps. Western democratization campaigns were shallow and did not insist on thorough denazification. They feared it would spark political destabilization and thereby open the floodgates for communist subversion and takeover. The Soviets were opp011unistic Marxists and shallow anti-fascists and played a cynical game of using denazification in Austria as fodder in their Cold War propaganda battle with the West. A remarkable group of Austrian postwar leaders quickly fathomed this game of superpower politics and ideological antagonism between two empires on missions of "manifest destiny". They shrewdly used the leverage gained from these East• West tensions to manoeuvre between the superpowers and their respective empires. The founding fathers of the Second Austrian Republic were realists and gained their country's independence, not a mean feat considering what happened to their old friends and neighbours to the East. Unlike their counterpai1s in West Germany, they failed as moral leaders and refused to remind their citizenry of Austrians' complicity in Hitler's war. "Waldheimer's disease'', indeed, is a pathology afflicting an entire nation and contributing to Austria not adequately acknowledging to this day its many debts to Jews and other minorities hounded by Hitler's Austrian minions, let alone repaying them. The Austrians share the blame with the Western powers who looked away while the Austrians covered up their past, and let them off the hook early. Those who facilely excuse these failings by the Austrian founding fathers as the prudent pursuit of national interest6 usually forget that the best scholars on real• ism and statecraft, such as Hans Morgenthau and Reinhold Niehbuhr, emphasise the interplay of national interest with upholding moral standards.7

At the end of a study that has consumed ten years of my scholarly life it is with much pleasure and great humility about my own limitations as a historian of Prej(1ce and Acknowledgements Xlll

international history that I acknowledge the huge debts I have accumulated. My dissertation advisers at Harvard University, out of which this book has grown, have been much admired intellectual leaders in their respective fields of study for a long time. Their imprints are all over this book. Ernest May has encouraged me to cast my net wide and pick from a grab-bag of methodologies when doing inter• national history. Domestic factors, public opinion, and lessons drawn by policy makers from history are as important as understanding the multiplicity of inter• national actors in the Cold War, especially when figuring out a complex quadri• partite occupation regime. It goes without saying that in his approach deep immersion in the archives, political cultures and languages of these actors is mandatory (unfortunately I could not live up to his awesome linguistic standards). Charles Maier has shown me that memory matters greatly and some pasts may be "unmasterable''. His example also showed me that it behooves the international historian to incorporate political economy in his approach. They both prodded a shy graduate student from the deepest Austrian provinces into tackling a subject that in the beginning was beyond his grasp, and encouraged him to complete it. Thomas Schwartz. a fellow graduate student with the same intellectual pedi• gree, now a leading Cold War scholar in his own right, has provided me with the most thorough reading in how to revise my dissertation and suggested apply• ing his "moral integration" approach to it. Many other Harvard graduate students have sharpened my ideas, among them Fitz Brundage, Chris Jackson, Ben Kaplan, Jennifer Laurendeau, Adrian Jones, Avie! Roshwald, Mark Spaulding, Jack Trumpbour and Bob Wampler. I first encountered Saki Dockrill in London busily pouring over files in the PRO. She has been a friend ever since, and her admirable scholarship on British and American foreign policy has inspired me. We have often compared notes on Germany and Austria in the scholarly panels and conferences which we have organized together. Her invitation to publish this book in her new Cold War Series with Macmillan greatly honoured me and gave me the much-needed push to complete it. At Macmillan Annabelle Buckley has been instrumental in com• missioning the book. Valery Rose did a superb job of copy-editing the typescript. Marianne Dirnhammer took good care of me while I was a guest professor at the University of Salzburg in the spring of 1998, where I was able to finalise my work on the typescript. Numerous scholars and colleagues have given me sound advice and become friends. Draft chapters were read and returned thick with comments for revisions by Siegfried Beer, Evan Burr Bukey, Hermann Freudenberger, Ernst Hanisch, Martin Kofler, Joseph Logsdon, Jonathan Petropoulos, Dieter Stiefel, Kurt Tweraser and Kathryn Weathersby. In Austria Thomas Albrich, Thomas Angerer, Siegfried Beer, Klaus Eisterer, Michael Gehler, Oliver Rathkolb and Reinhold Wagnleitner have been generous in sharing ideas, writings and documents with me. Erwin Schmid! provided the map for this book. Gerald Stourzh 's pace• setting scholarship on the Austrian treaty has been a constant guide. In Germany XIV Prej(1ce and Ack11mrlcdgcmc11ts

Gunther Mai, Wolfgang Krieger and Berndt Ostendorf helped along the way, as did Robert Knight in Great Britain. Needless to say, in spite of such sterling advice, mistakes remain and not all interpretational differences could be ironed out; they arc mine alone. Without a host of highly professional archivists on two continents this study could never have been written: Sally Marks, Kathy Nicastro. Dane Hartcrove, Robert Wolfe, Edwin Reese and William Maloney in the National Archives: Liz Saftly and Dennis Bilger in the Truman Library; David Haight in the Eisenhower Library; Nancy Bressler in Princeton's Seeley G. Mudd Library: Michaela Follner, Horst Brettner-Messler, Christiane Thomas. Manfred Fink and Lorenz Mikoletzky in the Austrian State Archives in Vienna: Stefan Liltgenau at the Kreisky Foundation. and Ernst Bezemck with the Fig! Papers at the Lower Austrian State Archives in Vienna; not to forget the many unnamed archivists in Kew's Public Record Office, Paris' Quai d'Orsay French Foreign Ministry and the Chateau de Vincennes' French Army Archives, Bonn's German Foreign Office Archives and the Adenauer Papers, and the archivists of the Roosevelt Library in Hyde Park and of King's College, London. The kind actors "present at the creation" of this history are listed in the bibliog• raphy at the end of this book. I am very grateful for their time and explanations. If I mention one of them by name it is Michael Cull is in London. who as a junior diplomat was crucial in the making of the Austrian treaty and who has extended many kindnesses to me. Sir John Cheetham read many hours from his Vienna diary into my tape recorder and permitted me to quote from them, as did Piers Dixon from his father's diary. Mrs Mary Edwards kindly gave me permission to quote from the unpublished John Selby-Bigge memoirs. Gottfried Heinl shared xeroxes of some letters from the Raab correspondence with me. Copyright mater• ial from the Public Record Office, Kew, appears by permission of Her Majesty's Stationery Office. Many institutions and individuals have financially supported my archival research, or been gracious in hosting a tired researcher collapsing in their apart• ments at the end of long days in the archives. Harvard's Center for European Studies has funded my European archival research with a fellowship from the Krupp Foundation Fund; the Charles Warren Center's Kohn Family Fund sup• ported my visits to American archives. The particular generosity of the Truman Library Institute and its former Director, Benedict K. Zobrist. is gratefully acknowledged here for both a research stipend and a "dissertation year fellow• ship" in 1988/9. Support from the University of New Orleans' Research Office and the College of Liberal Arts' Travel Fund has allowed for further stays in Washington archives. My Austrian home state of Vorarlberg has generously financed an archival stay in Vienna, and the Austrian Cultural Institute in New York has supported me with travel funds. Ron Bee probably docs not care to remember how many times I crashed on his floor in Washington. My brother Burkhard Bischof in Vienna, and Josef Leidenfrost and his wife Elisabeth Fiorioli, Preface and Ack11owledgemen1s xv rightly wondered over the years how many more documents I would want to see before finishing lhis book. The Murrays in Kew, lhe Danspeckgrubers in Princeton, the Spauldings in Oberwinter, Mrs Helms in Independence and the Jurys in Abilene adopted me like a son into their families. The University of New Orleans (UNO) has supported my work since I joined its faculty in the autumn of I 989. My chairs in the History Department, Gerald Bodet, Arnold Hirsch and Joe Caldwell, have vigorously nurtured my career. Joe Logsdon and Steve Ambrose have been mentors ever since l studied with them at the University of New Orleans (UNO) in 1979/80. No administralor has been more supportive than Dean Robert Dupont of Metro Col lege. UNO. ln spite of the budget cullers in Baton Rouge he has always found funds to send me to schol• arly conferences and keep me happy. Dean of Liberal Arts Philip Coulter and Provost Lew Paradise granted a sabbatical leave in the fall of 1997 which gave me the time needed to prepare the final draft of this manuscript. The UNO and Gordon Mueller have developed a model trans-Atlantic partnership with my alma maier, the University of Innsbruck, which first brought me to New Orleans. This book is dedicated to my wonderful partner in life, Melanie Boulet. My parents and many brothers and sisters in Auslria have forgiven her for keeping me in America. Her cheerful personality has made Ji ving in Louisiana a great adven• ture. Her steady contributions in keeping this project alive cannot be told here. Our recent move to the languid bayou country has created an oasis of tTanquiJJity fostering both our many writing projects, onJy interrupted by three li vely kids. Andrea. Marcus and AJexander have put up with their Papi silting in his office writing rather dian catching frogs, crawfish and crabs with lhem. Jon Boulet has helped with computer problem~ and built an awesome bookshelf to hold my col• lections from many years - no more excuses could be made nor to finish this book. Alas, l have not always followed tile sage advice of the Cajun philosopher Jimmy Boulet lo ~ay things simply and in few words. The daily joys of all their presences in my life easily makes up for the books not w1iHcn. Giinter Bischof List of Abbreviations

ACA Allied Commission for Austria ALCO Allied Council AR Archives of the Republic (in Austrian State Archives) ATC Austrian Treaty Commission CAD Civil Affairs Division (US War Department) CAS Conte111poran· Austrian Studies ccs Combined Chiefs of Staff CE Central European Division (US State Department) CEEC Committee for European Economic Cooperation CFM Council of Foreign Ministers CIA Central Intelligence Agency COM ECON Council for Mutual Economic Assistance CP Clark Papers CV Carte/I Ver/){/nd BKA-AA Austrian Foreign Office in the Federal Chancellery DBPO Documents on British Potier Oi·erseas DDEL Dwight David Eisenhower Library DDSG Danube Shipping Company EAC European Advisory Commission EDC European Defense Community ERP European Recovery Program (Marshall Plan) EUR Division of European Affairs (US State Department) EXCO Executive Council (in the Allied Council) FDRL Franklin Delano Roosevelt Library FO Foreign Office FORD Foreign Office Research Department (British) FRPS Foreign Research and Press Service (British) FRUS Foreign Relations of' the United Slates GA Division of German and Austrian Economic Affairs (US State Department) GARIOA Government Appropriations for Relief in Occupied Areas HSTL Harry S. Truman Library JCS Joint Chiefs of Staff KP Kreisky Papers KPO Kommunistische Partei Osterrcich KZ Concentration Camp LE Office of the Legal Adviser (US State Department) LF Lot Files (in State Department Records) MAE French Foreign Ministry

XVI lisr ofAbbreviations xvii

MAP Mi liuary Assistance Program MSA Mutual Assistance Program NA National Archives (Washington. DC) NS National Sozialismus NSC National Security Council NSDAP National SoL.ialistische Deutsche Arbeiter Partei OEEC Organization for European Economic Cooperation OM GUS Office of Miljtary Government United States (Gemiany) OVP Austrian People"s Party oss Office of Strategic Services PA-AA Political Archives of the German Foreign Ministry PPS Policy Planning Staff (US State Department) PREM Operational Papers of the Prime Ministers (British) PRO Public Record Office PWE Political Warfare Executive (British) R&A Research and Analysis Branch (OSS) RG Record Group SACEUR Supreme Allied Commander Europe. European Theatre SACMED Supreme Allied Commander. Mediterranean SANACC State-Army-Navy-Air Force Coordinating Committee (American) SD Sicherheits Dienst SPO Austrian Socialist Pruty SS Schllltzstaffel SWNCC State- War-Navy Coordinating Committee (American) UN United Nations UNRRA United Nations Relief and Rehabilitation Administration USACA United States Element, AIJied Commission for Austria USFA United States Forces Austria USIA Administration or Soviet Property in Austria