THE PHYSICAL AND TERRITORIAL BOUNDARIES of Austria may not have changed since the end of the Second World War and the founding of the Second Republic, but Austria's geopolitical significance, its demographic makeup, and its citizens’ understanding of Austrian nationhood have all changed significantly over the last few decades. Austria's internal social and political fabric is altering too, with a move away from the old consensus-based social partnership model towards a pattern of non-interventionist free-market capitalism, modern technologies, international cooperation, and global financial interventions. Rudolf Burger posited that the entry of Austria into the European Union in 1995 brought to near completion Austria's status as a modern European nation. Furthermore, it canceled out both the “Ausschlußtrauma” and the “Anschlußtrauma” that characterized its relationship with Germany (exclusion from the German Reich formed in 1871, and annexation by Hitler's Germany in 1938). According to Burger, only Austria's obligation to remain militarily neutral stands in its way of obtaining full sovereignty as a nation.

The shock occasioned by the meteoric rise in popularity and election success of the extreme right-wing party the Freiheitliche Partei Österreichs (Liberal Party of Austria, FPÖ) in 1999 produced a huge wave of political self-reflection in Austria, both among the general population and in the books, interviews, essays, and works of literature of many of Austria's most high-profile writers and intellectuals. Most of these have been active in countering the nationalism propounded by some FPÖ politicians and likeminded Austrians. This nationalism is at best merely anti-immigrationist and at worst inherently racist, and it is a tendency that has been further fueled by the fear of increased migration to Austria from the EU's most recently added members. The European Union was so concerned about the FPÖ becoming a partner in the new ruling coalition of February 2000 that it placed diplomatic sanctions on Austria and commissioned a report on its government. Although a clean bill of health was finally returned, this was only based on an inspection of the theoretical position — the protection of minorities in law — and not on a detailed investigation of the realities of Austria's policies regarding ethnic minorities (Minderheitenpolitik).