Austria - Money

Austria has pursued moderate, stable, long-term fiscal and monetary policies . Throughout the decade, the money supply was constantly growing, as well as Austria's exports, imports, government revenue and spending, gross domestic product, and income. The Austrian currency, the schilling, is strong and convertible. Once called the alpine dollar, the Austrian schilling has become one of the most stable currencies in the world. The Austrian schilling depreciated against the dollar in 1996 and 1997 but was stable against most European currencies. With the decision on the European Monetary Union in place, fluctuations of the schilling against the currencies of the other 10 European Monetary Union participants were minimal during the remainder of 1998. The dollar continued to strengthen against the schilling during the first half of 1998 and 1999 parallel to its rise against the Euro.

In 1999, Austria adopted the euro, the common currency of the European Union, at a fixed conversion rate of ATS13.76 to Euro1. At the same time, Austria surrendered its sovereign power to formulate monetary policy to the European Central Bank (ECB), in line with other EU member states participating in the European Monetary Union. Austria's central bank, the Österreichische National Bank (ANB), is a full participant in the European System of Central Banks. The government successfully met all convergence criteria due to austerity measures implemented in 1996-97 and is pursuing a policy of further reducing the fiscal deficit and the public debt. The ECB's focus on maintaining price stability in formulating exchange rate and monetary policies is viewed by the ANB as a continuation of the hard schilling policy the ANB pursued since 1981. By fixing the Austrian schilling to the German mark, the government successfully kept inflation under control and promoted stable economic growth.