Glossary -- Austria

Bretton Woods system

Established in 1944, the system aimed at stabilizing exchange rates by fixing the price of gold at US$35 per troy ounce. Other currencies were linked to the system according to their exchange rates with the United States dollar. The system was replaced by one of floating exchange rates in the early 1970s. See also European Monetary System (EMS).

d'Hondt method

Also known as the highest-average method of determining the allocation of seats to political parties after an election. The d'Hondt method was devised by a Belgian, Victor d'Hondt, to be used in electoral systems based on proportional representation. In addition to Belgium, the method has been adopted by Austria, Finland, Portugal, and Switzerland. Under this method, voters do not choose a candidate but vote for a party, each of which has a published list of candidates. The party winning the most votes in a constituency is awarded the area's first seat, which goes to the candidate at the top of the winning party's list. The total vote of this party is then divided by two, and the amount is then compared with the totals of the other parties. The party with the greatest number of votes at this point receives the next seat to be awarded. Each time a party wins a seat, its total is divided by the number of seats it has won plus one. The process continues until all the seats in a constituency are awarded. The d'Hondt method slightly favors large parties.

European Community (EC)

See European Union (EU).

European Economic Area (EEA)

An economic area encompassing all the members of the European Union (EU--q.v.) and the European Free Trade Association (EFTA--q.v.), with the exception of Switzerland. Created in May 1992, the EEA went into effect on January 1, 1994. The EEA is a single market for the free movement of labor, services, capital (with some restrictions on investments), and most products. EFTA members have agreed to accept EU regulations in many areas, including company law, education, environmental protection, mergers, and social policy.

European Economic Community (EEC)

See European Union (EU).

European Free Trade Association (EFTA)

Founded in 1960, EFTA aims at supporting free trade among its members and increasing the liberalization of trade on a global basis, particularly within Western Europe. In 1993 the organization's member states were Austria, Finland, Iceland, Liechtenstein, Norway, Sweden, and Switzerland.

European Monetary System (EMS)

Established in 1979 by the European Economic Community (EEC-- q.v.), the EMS was created to stabilize currency values because the Bretton Woods system (q.v.) proved not fully satisfactory.

European Monetary Union (EMU)

The EMU is a plan for a single European central bank and for a single European currency to replace national banks and currencies for those European states that qualify.

European Union (EU)

Until November 1993, the EU was known as the European Community (EC). The EU comprises three communities: the European Coal and Steel Community (ECSC), the European Economic Community (EEC), and the European Atomic Energy Community (EURATOM). Each community is a legally distinct body, but since 1967 they have shared common governing institutions. The EU forms more than a framework for free trade and economic cooperation: the signatories to the treaties governing the communities have agreed in principle to integrate their economies and ultimately to form a political union. Belgium, France, Italy, Luxembourg, the Netherlands, and the Federal Republic of Germany (West Germany) were charter members of the EU; Britain, Denmark, and Ireland joined on January 1, 1973; Greece became a member on January 1, 1981; and Portugal and Spain entered on January 1, 1986.

exchange rate mechanism (ERM)

Mechanism established in 1979 to regulate currency exchange rates in the European Monetary System (EMS--q.v.). Member currencies are permitted to fluctuate in value only within a narrow margin (the so-called snake).

gross domestic product (GDP)

The total value of goods and services produced by the domestic economy during a given period, usually one year. Obtained by adding the value contributed by each sector of the economy in the form of profits, compensation to employees, and depreciation (consumption of capital). Most GDP figures in this book are based on GDP at factor cost. Real GDP is the value of GDP when inflation has been taken into account.

gross national product (GNP)

Obtained by adding the gross domestic product (GDP-- q.v.) and the income received from abroad by residents, less payments remitted abroad to nonresidents. Real GNP is the value of GNP when inflation has been taken into account.

Hare system

Also known as the single transferable vote formula. The Hare system was developed in the nineteenth century by Thomas Hare, a British political reformer, to create constituencies with multiple representatives in electoral systems based on seeking proportional representation. Ballots are used on which a voter may rank his or her choices in order of preference. Any candidate who has received enough first-preference votes to meet a quota wins a seat. Votes above this quota are transferred to the candidates with second- preference votes, and each of those who meet the quota is awarded a seat. The process continues until all seats in a constituency are filled.

Organisation for Economic Co- operation and Development (OECD)

Established in 1961 to replace the Organisation for European Economic Co-operation (OEEC), the OECD is an international organization composed of the industrialized market economy countries (twenty-four full members as of 1993). The OECD seeks to promote economic and social welfare in member countries, as well as in developing countries, by providing a forum in which to establish and coordinate policies.

Organisation for European Economic Co-operation (OEEC)

See Organisation for Economic Co-operation Development (OECD).

schilling (S)

National currency. Consists of 100 groschen. In relation to the United States dollar, the annual average exchange rate was S13.2 in 1989, S11.4 in 1990, S11.7 in 1991, S11.0 in 1992, and S11.4 in 1993.

Western European Union (WEU)

Founded in 1948 to facilitate West European cooperation in economic, social, cultural, and defense matters. Reactivated in 1984 to concentrate on the defense and disarmament concerns of its members, the WEU is headed by a council consisting of its members' ministers of foreign affairs and defense. The council meets twice a year; lower-level WEU entities meet with greater frequency. In late 1993, WEU members consisted of Belgium, Britain, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal, and Spain.

Austria - TABLE OF CONTENTS