12. Editorial Note

On December 13, Austria’s Cabinet refused to guarantee the proposed Soviet loan to Lower Austria. Two days later, Chancellor Raab publicly endorsed the loan, but on December 20, the Socialists within the Austrian Cabinet again defeated the Federal guarantee.

Those in favor of the loan claimed that it would promote the development of Lower Austria, demonstrate Austria’s absolute neutrality, and keep the Soviets from dumping inflationary schilling accounts on Austria. Those in opposition to the loan countered that it would affront the Western world, spur the economic drive of the Soviet Union, and condone the secrecy and nongovernmental channels in which it was negotiated by the provincial government of Lower Austria. Opponents further argued that the Soviet Union possessed too few schillings to ruin the Austrian economy.

The Soviet news agency, TASS, reported on December 24 that Lower Austria had approached the Soviet Union for a loan of 500 million schillings the previous October. Lower Austria had requested a Federal guarantee for 800 million schillings. TASS announced that if the guarantee came through the loan was still available. (Despatch 749 from Vienna, March 6, 1956; Department of State, Central Files, 863.10/3–656)