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Hapsburg Cities

Present-day travelling times.
Journeys East are often subjectively experienced as being longer than they really are. Source: Statistische Mitteilungen der Stadt Wien [Statistical Information of the City of Vienna], 1/2000

"Hapsburg Cities," are what tour organizers advertise, especially with U.S. tourists, when they are selling short vacations in the three former centers of the Hapsburg monarchy: Vienna, Prague and Budapest. More than eighty years after the disintegration of the Austro-Hungarian Empire, its historic artifacts, long since flooding the film industry, still provide fascinating enough publicity to bring in profits to the tourist industry. All three cities have highly successful international tourism records.

Even when the Cold War was not quite over in the 1980s, one historic metropolis axis - Vienna-Budapest - seemed strong enough to support a joint "world-exhibition" in 1995 despite ideological differences and the last confrontation between the U.S. administration of Reagan and the soviet-communist block. This project ultimately failed with the majority of Viennese citizens because of the end of the Cold War in 1989 and the fact that nationalist questions were returned by the populists to the top of the agenda in municipal decision processes (Motto: Migration and 'the foreigner question').

At the same time, against the background of the emerging expansion of the European Union, the Vienna-Budapest axis has been confronted by unexpected basic socio-economic conditions and development strands which not only suggest that they will cooperate but also that they will compete with each other.

By 1997, businesses with company headquarters in Vienna had definitely profited from the opening to the East and had invested strongly in Hungary, in Budapest in particular. In contrast to business with the then14 states of the EU, a clear export surplus here also led to a balance of trade surplus. Restructuring in the Eastern European transformation economies was an unconditional prerequisite for EU membership, but because of the economic problems that followed in its wake, the boom eased up considerably in subsequent years. (Walter Langer/Ingo Schmorance: EU-Osterweiterung aus Wiener Sicht [EU Expansion to the East from the Viennese Point of View] in: Wirtschaftspolitische Blätter [Economic-political Pages], 1-2/1999, p.77).

Development in the bank sector proceeded completely differently. The bank-scene centered in Vienna (Bank Austria, Creditanstalt, Erste Bank, or Raiffeisen Bank) was able substantially to improve profit balances through profits in the newly established Middle and Eastern-European network of branches, and Austrian insurance companies also set off in search of their historical roots and tried to join in this development. In this connection one should not overlook the historical continuity in the banking sector, in the monarchy before 1918 as well as in the time between the wars; and in the National Socialist period, Vienna operating under the Nazi looting policy was the center of a Middle and South Eastern European banking network. In the meantime two years after the enlargement of the EU in 2004, it is clear that the Austrian economy altogether has strongly profited in various areas (foreign trade, industry, investment policy) from the membership of the Czech Republic and Hungary in the European Union (cf. Study of the Viennese Institute for International Comparative Economics [Wiener Institut für Internationale Wirtschaftsvergleiche, The New EU Member States and Austria: Economic from the year 2005). And a relocation of Austrian direct investments is emerging in the direction of new speculative markets in South Eastern Europe (Rumania, Bulgaria, Croatia), as investments in Rumania of the OMV or the Erste Bank show.

While the traditional "connections to the east" still went on existing after 1918 despite the world economic crisis, things changed under the National-Socialist regime which set about abusing and undermining existing networks in the economic area - this became particularly clear in the crushing of the middle European concerns of Jewish owners situated in Vienna. After 1945 the Communist regimes rapidly took up a policy of focusing on their own nations, and through their state nationalization policies cut the traditional business, sales and service channels. In the "West," no later than 1948/49, the USA again put into effect a radical policy of economic war against the Communist block which reversed Austria's traditional Eastward orientation for decades in the direction of integration with the West. Only in the detente politics of the 1960s and 1970s did there develop again a modest amount of business with the East, and only after 1989 could at least a temporary reorientation take place.

Despite crises and growing unemployment, the economic and above all the social structures in the neighboring states, Hungary, Slovakia and the Czech Republic, are functioning - even if under great burdens for many people, and so there has been little immigration to Vienna from these countries, limited as it also is by the transitional arrangement for employee freedom of movement. On the other hand the burden of traffic has increased so that political decisions on trade are necessary in the European Union.

The Hungarians have a firm place in the public consciousness, also in Vienna, as "favorite" neighbors, but negative historic prejudices against the Czechs (and with them the Slovaks) were revived in recent years. This process suggests that the latent nationality conflicts of the turn of the last century have been maintained - above all by the Cold War. As in the fairytale "Sleeping Beauty," an unreflective continuation of ideas about the "neighbors" is setting in again in the public consciousness.

Viewed from the economic standpoint, it is however different, since Vienna and Budapest are clearly in stronger competition with each other than Vienna and Prague. While Prague probably bets these days partly on limitless 'internationalization' and mainly tends to the West, Budapest is supposed to be developing itself into a 'gateway' to the Southeast, that is, as a bridgehead for firms in this area, offering perfect infrastructure, high quality of life, so to speak, as service, knowledge and management turntable in the direction of Southern Europe. Vienna sees itself as the East-West transaction center but the Northern half of this objective on the European map has already been occupied clearly by Prague and also by Berlin. Not only in the mental processes but also in transport policies were the mistakes of the monarchy repeated, and Czech territory has receded into the far distance: Thus there is a motorway connection only as far as Brünn, but going on to Vienna there are more than 135 kilometers on slow federal roads, the direct international train connection, Vienna-Prag through Gmünd, was given up with the result that the "high speed trains," Vienna-Prague via Brno, take about as much time as the fastest steam locomotive in 1917, the "310"-engine of the imperial court train with 100km per hour speed (http://www.imperialtrain.com, 10/2001 and 02/2006).

By and large, Vienna, compared with the period before 1928 but also before 1945, has lost in significance through the Cold War, not only in the pan-European railway network but also in the road network - what is left is above all the West-East route. By contrast Vienna has been altogether able to enlarge its hold over air travel. Increasingly on the basis of the streams of traffic, the regional metropolitan network Bratislava-Brno-Krakow is becoming a competitor for the Euro-region Vienna-Prague-Budapest.

The distance to Prague will also increase further since with the EU-integration of Slovakia and that of Bratislava, only 65 kilometers East of Vienna and reachable in an hour's drive, a regional center has grown up that is small but economically interesting for the Viennese area also. Viewed historically, Bratislava is a regional town like St.Polten or Wiener Neustadt in the environs of Vienna; it has not only assumed an important role as terminus and refinery location of a big petroleum pipeline from Russia (like Vienna-Schwechat with the "Western" refinery and pipeline-pendant)but it also plays an important role in transportation technology with its airport that was recently acquired with the Kosovice airport by the Vienna airport and it contributes to the appreciation in value of the Vienna-Bratislava area of speculation.

The competition between metropolitan centers will finally be decided through "soft factors" - that is, education and training especially regarding the media of the digital revolution (here corresponding infra-structure measures are absolutely necessary), and also quality of life (leisure-time, educational and cultural offerings). Here Prague, for example, a city in which up to 50,000 young U.S. citizens live, definitely has precedence in international acceptance.

It becomes clear in sober comparison that Vienna after 1989 did experience a mild second Gründerzeit with growth in population through immigration and new construction as well as the development of a new leisure axis along the Danube and the building of a new second city on the Danube flatlands North of the city (the first being the UNO-city of the late 1970s and early 1980s). Prague on the other hand has big problems in the area of population and housing. But then again Vienna for a long time could not cope with the integration of immigrants through qualitative measures and open political discussion. Anti-foreigner battles are a modern form of the nationality conflicts of the turn of the century 1900 - less radical perhaps but nevertheless from the present-day point of view aggressively pursued. These battles signal the socio-political explosiveness of the topic.

Despite numerous political declarations of intention, numerous city and country agreements, and their own regional bureaus these three metropolises are only just beginning seriously to interact. While scholars of culture and historians enthuse in numerous publications about the intellectual and economic significance of this three-metropolis area, social interaction is only slowly beginning (e.g. in the area of education). This process on the level of "human capital" will no doubt take two generations but then will surely come to full fruition, though the major migrations of the 1800s will certainly not occur again.

Oliver Rathkolb

Station: Hapsburg Cities
(Last update: 03/2006)

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