Experiences of a Small Country’s Short Stay in The Eu: The Case of Austria

Membership in the European Union goes far beyond any previous integration step Austria had experienced after World War II. As an EFTA member, Austria has only participated in a free-trade area since the sixties. The abolition of import tariffs for manufactured goods led to welfare improving trade with EFTA member-countries and welfare decreasing trade with the EC countries. The free-trade agreements between EFTA countries and the EC in 1972 enlarged the free-trade area of the mid-seventies when all tariffs between both integration associations were abolished. Since then, the European Community has moved from one ambitious integration target to another — from the Single Market project in 1993 to the EMU with a single currency in 1999 and to Eastern European enlargement. EU membership implies not only integration in a borderless market with common competition rules, but also participation in many harmonised or co-ordinated policy areas (CAP, common commercial policy, regional policy, competition policy etc.). The EFTA has instead stagnated on the free-trade area status. It is no wonder that most of its members were eager to become EU members. After the fourth EU enlargement involving Austria, Finland and Sweden in 1995, EFTA shrank to only four members, two of which are mini-states (Island and Liechtenstein) and one of which has refused not just for the first time to enter the EU (Norway) with Switzerland even refusing to sign the EEA treaty in 1993.