Description
This paper will explore the multifarious and complex impacts on Austria of the League of Nations’ programme for financial reconstruction of the country. The League’s programme was designed to reshape Austria’s financial, fiscal and bureaucratic structures with a view to stabilising its post-First World War currency and enabling the country to obtain international loans. The scheme saw the installation in Vienna in late 1922 of a League-appointed Commissioner-General who had substantial powers over Austria’s budget and thus government spending.
The League’s programme has often been regarded as a great success for international financial diplomacy, both at the time and since, and, in the short term, the League’s work saw the establishment of confidence in the Austrian currency, the provision of international loans, the end of hyperinflation and the attainment of a balanced budget. This paper will explore the ways in which the programme also worked in some respects to undermine and destabilise Austria, through the creation of depressive economic conditions and resultant high levels of bankruptcies and unemployment, and through the exacerbation of political conflicts within the new Republic –conflicts between political groups and between the central government and regional governments.
