Historical Sketch

The Austro-Hungarian defeat in the First World War triggered the fall of the Habsburg monarchy. End 1918, the Habsburg rule over Austria-Hungary collapsed, and the country disintegrated into different national states. The German speaking territories were united into "German-Austria", which was altered into Austria in 1919 as the Treaty of Saint-Germain of 1919 banned any union with Germany (and any reference to it). In 1938, Austria got annexed by the German Reich. After the Second World War, it was restored but remained under Allied occupation until the treaty of 1955, which created the Republic of Austria as fully independent state.

Monetary History Overview

The sudden disintegration of Austria-Hungary triggered the immediate separation of the common monetary area. The successor countries took measures in early 1919 to stop the currency from circulating across the new borders. In (German-) Austria, the banknotes were overprinted during March 1919, thus creating the Austrian Crown as a currency that was now decoupled from the currency of the other successor states. In the post-war economic crisis, the currency depreciated rapidly such that previously unissued banknotes were also overprinted and put into circulation. In 1922, new banknotes in higher denominations had to be produced in the name of the provisional Austro-Hungarian Bank (Austrian Management). In January 1923, the Austrian National Bank began operations, and the former Habsburg state bank went into liquidation. But the reform of the currency took another two years. In January 1925, four zeros were cut from the Crown, and the Austrian Shilling became the new currency. It was pegged to gold in the standard of 1892. The Shilling had to be devalued after the economic crisis of the 1930 but remained stable overall. After the German annexation of Austria in March 1938, the central bank was liquidated within a week, and the German Reichsmark became legal tender. The Austrian currency was demonetized until mid-May. After the restoration of Austria's independence in May 1945, the National Bank was provisionally reconstituted in July, and towards the end of the year the German and Allied paper money was withdrawn and the Austrian Shilling reintroduced. Cash amounts in German notes above a maximum threshold were transformed into a state loan and later liquidated. In December 1947, another currency exchange took place, and the provisional and remaining Allied notes were recalled. Again, cash holdings were partially confiscated as the amount above a threshold were exchanged at a lower rate. The Shilling was devalued several times against the US Dollar until 1953 but remained stable afterwards. In the late 1960s and early 1970, the Shilling even began to appreciate together with other European currencies. In 1973, the exchange rate was floated, and Austria joined the European currency system. It is a founding member of the European Monetary Union and has introduced the European Euro in 1999. The Austrian banknotes and coins were withdrawn in 2002.

Austria joined the International Monetary Fund (IMF) on 27.08.1948.

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