Economic Cooperation between Austria and Central and Eastern Europe in the Context of European Integration

The study analyzes the impact of integration in the West and of the political and economic upheaval in the East on Austria, especially on Vienna. The new trade relations in Europe that result from the rapid inclusion of the Central and Eastern European countries into the European integration process are evaluated. In this context the EU's association agreements and EFTA's free trade agreements with most countries of Central and Eastern Europe are of great importance. The inclusion of Central and Eastern Europe into the European integration process is compared with NAFTA. An analysis of direct investment in the East provides estimates of total foreign capital invested in this region. The attractiveness of the Central and Eastern European countries for foreign capital is assessed. The policy instruments available in Austria and in the EU for stimulating direct investment in Eastern Europe are evaluated. Austria's economic cooperation with the countries of Central and Eastern Europe is investigated on the basis of two surveys with explicit regard to the situation of manufacturing in Vienna. The transition to a market economy in Central and Eastern Europe has opened many opportunities to Vienna's economy. Austria's accession to the EU eliminated many barriers that stood in the way of closer economic cooperation between Austria and its neighbors in the East. It enhanced Vienna's attractiveness as the center of an area which encompasses large parts of Austria, of Hungary, and of the Czech and Slovak Republics and has an impact on areas even farther away.