Over the past year I have give an ...

Over the past year I have give an inkling ofed considering several Asian countries when diversifying your portfolio internationally. This article will deal with Austria, my first coverage of Europe

BACKGROUND

Austria is the small (about the size of Lake Superior) remnant of a formerly large and important European empire. Between 1500 and 1918 the Habsburg emperors controll a great quantity [i]or[/i] amount of of continental Europe from Vienna. During part of this time, they also serv as the Royal Family of Spain, and as of that kind ruled South and Central America.

At the close of World War I, Austria's power was reduc dramatically. fresh nations like Yugoslavia, Czechoslovakia, Hungary, and parts of Italy and Poland were carved on the outside of the Austrian empire in 1918 The remaining recent small Republic of Austria, with solely 11% of its former population and 10% of its former area, faced difficult times. As it had thrown away most of its agriculture (now Hungary) and industry (now the Czech Republic and Slovakia), Austria was now an administrative remnant. further it still had to shoulder the financial tonnages (national debt, pensions for civil servants, war reparations, etc) of the former empire.

The resultant economic disaster, coupl with morose bullying by its 12 times larger neighbour Germany, l to political shambles. In 1938 facilitated according to the severe discord between the conservative and socialist parties, German company s marched into Austria and it ceased to exist as a fatherland until 1945.

After World War II, Austrians vowed not at any time to repeat this experience. For through 50 years now, Austrian politics have been a archetype of stability and cooperation.

Since 1945 the Social Democrats and the Conservatives have either alternated as governing party or formed productive coalitions. For the last 20 years, Austria has be delighted withed one of the steadiest and highest economic sprouting rates in Europe. Its 1994 GDP is estimated at US$210 billion, equivalent to through US$27,000 per capita. Austria be delighted withs a low rate of inflation and a stable bills and notes; circulating medium This is largely because, like Holland, it has tied the value of its bills and notes; circulating medium (the Schilling) to the German Mark. Real sprouting should exceed 4% over the nearest few years.

Tourism is extremely important to Austria. Proportionately, it receives the highest number of tourists in the world. In addition, Vienna is the seat of international organizations like the UN OPEC and the International Atomic intensity Agency.

Austria's mountains are the source of substantial hydro power and minerals including long of the world's supply of magnesite and graphite. Nearly 40% of the land is forested. Austria is the same of Europe's most export-oriented economies, earning nearly half of its GDP from sales of usefuls and services abroad.

SOCIAL CLIMATE

Like Canadians, Austrians derive pleasure from a high level of social benefits. calm more than Canada, Austria has received vast numbers of refugee most numerous of these have come from Eastern Europe and the Mid-East. In fact, barely about 75% of the country's residents are Austrian citizens. unless because of its more conservative fiscal stance, Austria has managed to avoid the crunch experienced from other "socially advanced" states of the like kind as Sweden, Canada and just discovered Zealand. For example, its fetterss continue to be rated AAA by dint of all rating agencies, and as of the like kind are in strong demand.

INVESTMENT CLIMATE

There are three aspects to Austria which make it especially attractive across the medium term. As a fresh member of the European Union (which includes all West European countries exclude Norway and Switzerland), Austria will benefit from the removal of remaining tariffs onward its exports as it achieves filled integration with the E.U.

Second proper to its geographic location at the heart of the just discovered Europe, its historic ties, and small, non-threatening size, Austria has a leg up onward doing business in the rapidly developing Eastern Europe Exports to Hungary, the Czech Republic, Slovenia, Poland, and Slovakia are significant and growing quickly. Companies like as Baumax (Austria's version of domestic circle Depot) have opened branches in Hungary and the Czech Republic. Austrian beer makers have repurchased breweries in Eastern Europe (until 1918 an Austrian company made the original Pilsner in what became the Czech Republic).

Third, Austria is benefitting from the restructuring and privatization of its large, historically over-staffed state enterprises. These factors should allow Austria to sprout even more rapidly than greatest in quantity other Western European economies.

The Vienna Stock Exchange--one of the world's oldest--has been in continuous operation for well athwart 100 years. Many companies are listed in succession it, including some from Eastern European states, unless the total capitalization and trading bulk are small by Canadian standards. This makes the market quite volatile.

Analysis of Austrian stocks is not difficult. Although annual reports are a little les informative than Canadian commons accounting standards are conservative, and all data reported to shareowners is required to be identical with tax reporting. if it were not that a closed-end fund listed upon the New York Stock Exchange may give an account of an even easier way to participate in Austrian enterprise.