SECTION IV. POLITICAL ENVIRONMENT A. Nature of Bilateral Relationship with the U.S. Austria's bilateral relationship with the United States is excellent. Austria's political leaders and people recognize and appreciate the essential role played by U.S. economic assistance through the Marshall Plan after World War II, and the role played by the United States in promoting the conclusion of the Austrian State Treaty. Austria maintains an embassy in the United States at 3524 International Court, NW, Washington, DC 20008 (Tel. 202-895-6700). Consulates general are located in New York, Chicago and Los Angeles, with honorary consulates in Atlanta, Boston, Buffalo, Cleveland, Denver, Detroit, Honolulu, Houston, Miami, New Orleans, Newark, Philadelphia, San Francisco, San Juan, Seattle and St. Paul. B. Major Political Issues Affecting the Business Climate The 1955 Austrian State Treaty ended the four-power occupation and recognized Austria as an independent and sovereign state. Austria shapes its foreign policy on the basis of neutrality, redefined in the context of participation in the European Union's evolving security architecture. Austrian leaders also emphasize the unique role the country plays as a link between East and West and as a moderator between the industrialized and developing countries. Austria is active in the United Nations and in UN peacekeeping efforts. It attaches great importance to participation in the Organization for Economic Cooperation and Development and other international economic organizations and has played an active role in the Conference on Security and Cooperation in Europe. Vienna is headquarters of the International Atomic Energy Agency and the UN Industrial Development Organization. Other international organizations based in Vienna include the Organization for Petroleum Exporting Countries and its Fund for International Development, and the International Institute for Applied Systems Analysis. Austrians maintain a constant exchange of business representatives, political leaders, students, cultural groups and tourists with the countries of Central and Eastern Europe. As a result, Austrian companies are very active in investing and trading with the countries of Central and Eastern Europe. In addition, the Austrian Government and various Austrian organizations provide assistance and training to support constructive changes underway in the region. C. Synopsis of Political System, Schedule for Elections and Orientation of Political Parties Austria is a parliamentary democracy. The Chancellor is the Head of Government and the President is the Head of State. The Federal Assembly (parliament) is composed of two houses -- the National Council (Nationalrat), or the lower house, and the Federal Council (Bundesrat), or upper house. Virtually all legislative authority is concentrated in the National Council. Its 183 members are elected for a maximum four year term from nine electoral districts, according to a complicated system of proportional representation. The National Council may dissolve itself by a simple majority vote or it may be dissolved by the president on the recommendation of the chancellor. The Federal Council consists of 63 members elected by the legislatures of the nine provinces for four to six year terms. Seats are allocated on the basis of population, with each province guaranteed at least three. The Federal Council is restricted to reviewing legislation passed by the National Council, and has only delaying, not absolute veto, powers. The highest courts of Austria's independent judiciary are the Constitutional Court, which has jurisdiction over constitutional matters; the Administrative Court, which handles bureaucratic disputes; and the Supreme Court, for civil and criminal cases. Cases in the Administrative and Supreme Courts can be appealed to the Constitutional Court. Justices of the three courts are appointed by the president for specific terms. Austria's nine Laender (provinces) are headed by governors elected by the provincial legislatures. Although most authority, including police, rests with the federal government, the provinces have considerable responsibility for welfare matters and supervision of local administration. Strong provincial and local loyalties are based on tradition and history. Principal officials: Federal President Thomas Klestil Federal Chancellor Franz Vranitzky Vice Chancellor Gerhard Busek Foreign Minister Alois Mock Ambassador to the United States Helmut Tuerk Ambassador to the United Nations Ernst Sucharipa Austria has enjoyed political stability since World War II. The two major parties, the People's Party and the Social Democrats, have the support of the majority of the electorate. Three opposition parties -- the Freedom Party, the Liberal Forum and the Greens -- together poll about 25-30 percent of the vote. Extremist parties have had virtually no influence on government policy and usually receive less than one percent of the vote. The Social Democratic Party traditionally draws its constituency and much of its strength from the urban and industrialized areas. In the past, the party advocated heavy state involvement in Austria's key industries, the extension of social security benefits and a full- employment policy. In the mid-1980s, the party began to advocate free market-oriented economic policies and balancing the federal budget. The People's Party's traditional constituency has been among farmers, big and small businesses and lay Catholic groups. Its center of strength is rural Austria. In economic matters, the party advocates conservative financial policies and privatization of much of Austria's nationalized industry. The Freedom Party attracts those who desire no association with the two major parties. Recently, the party's mixture of populism and anti- establishment themes have won increased support. Nationally, it attracts approximately 15-20 percent of the vote. The Liberal Forum split from the FPO in February 1993. The effect this will have in national politics is not yet clear. The Greens poll 4-7 percent of the electorate.