Domestic Tranquillity under the Grand Coalition

The pattern of political cooperation established during the occupation years and the economic reconstruction that took place through the Marshall Plan laid the foundation for eleven years of political tranquillity and economic prosperity. In 1957 the government informally established the Parity Commission for Prices and Wages. This commission soon far exceeded its intended function of setting prices and wages and effectively established the country's basic economic policy. By bringing together the representatives of the major economic interest groups--the social partners--and requiring unanimous decisions, the commission became a powerful stabilizing force in Austrian society.

The effort of the SPÖ to broaden its electoral base helped resolve long-standing questions about the status and role of the Roman Catholic Church. The party realized that its inheritance of liberal anticlericalism and Marxist hostility toward religion stood in the way of attracting supporters who were devout Roman Catholics. As the SPÖ moved away from Marxist rhetoric, party leaders began to bridge the gulf between the SPÖ and Roman Catholics. In this eased atmosphere, the coalition partners were able to put the divisive issue of the 1934 concordat behind them. A new agreement with the Vatican was signed in 1960.

The overall effect of the ÖVP-SPÖ grand coalition and the social partnership represented by the Parity Commission, which brought together major economic groups, was to limit parliament's power. Most major economic and social decisions were made outside parliamentary channels and simply ratified by the Nationalrat, usually unanimously. Because no major policy differences were at stake, elections mainly served to determine the proportion of the patronage positions that would be accorded to the coalition partners. As the country progressed from the trauma of World War II and the occupation, members of both major parties began to express dissatisfaction with the coalition and the toleration of mismanagement and abuse of public office that the system appeared to condone. In the 1966 electoral campaign, ÖVP leader Klaus called for an end to the grand coalition. After winning an absolute majority, however, the ÖVP proposed terms for continuing the coalition, which Kreisky and other SPÖ leaders unsuccessfully urged their party to accept. Despite the breakup of the coalition, the Klaus government introduced no significant breaks with past policy. The ÖVP's four years in office were thus a coda to the grand coalition before the long period of SPÖ domination under Kreisky began in 1970.