|United States of Greater Austria|
|Vereinigte Staaten von Groß-Österreich|
Indivisibiliter ac Inseparabiliter
"Indivisible and Inseparable"
Gott erhalte, Gott beschütze
"God preserve, God protect"
|Government|| Federal parliamentary monarchy (1920–1934)|
Clerico-fascist authoritarian one-party state (1934–1941)
|•||1920||Heinrich Lammasch (first)|
|•||1941||Arthur Seyss-Inquart (last)|
|•||Upper house||Chamber of Peers|
|•||Lower house||Chamber of Deputies|
|•||Constitution adopted||1 October 1920|
|•||February Uprising||12 February 1934|
|•||May Constitution||1 May 1934|
|•||Naples Agreement||30 September 1935|
|•||Axis invasion||12 March 1941|
|•||Dissolution treaty||10 February 1947|
|•||1930||701,845 km² (270,984 sq mi)|
|Currency|| Krone (1920–1924)|
The United States of Greater Austria (German: Vereinigte Staaten von Groß-Österreich) was the successor state to the Austro-Hungarian dual monarchy created in the aftermath of the First World War. The early period under the regency of Archduke Maximilian Eugen was marked by violent strife between those with left-wing and right-wing views, leading to the July Revolt of 1927 and the February Uprising. After the coronation of Emperor Otto I Austria became a single-party state led by the clerico-fascist Fatherland's Front. The Ständestaat concept, derived from the notion of Stände ("estates" or "corporations"), was propaganda advocated by leading politicians such as Engelbert Dollfuß and Kurt Schuschnigg. The result was an authoritarian government of an ultraconservative Catholic character.
As the twentieth century started to unfold, the greatest problem facing the dual monarchy of Austria-Hungary was that it consisted of about a dozen distinctly different ethnic groups, of which only two, the Germans and Hungarians (who together accounted for about 44% of the total population), wielded any power or control. The other ethnic groups, which were not involved in the state affairs, were consisted of Italians, Romanians and a group of Slavic peoples (Croatians, Czechs, Poles, Ruthenians, Serbs, Slovaks, Slovenes and Ukrainians). Among them, only Croats had limited autonomy in the Kingdom of Croatia and Slavonia. The idea of the Dual Monarchy system of 1867 had been to split the previous Austrian Empire into two realms, one German-dominated, the other Hungarian-dominated. However, after various demonstrations, uprisings and acts of terrorism, it became readily apparent that the notion of two ethnic groups dominating the other ten could not survive in perpetuity.
Franz Ferdinand had planned to redraw the map of Austria-Hungary radically, creating a number of ethnically and linguistically dominated semi-autonomous "states" which would all be part of a larger confederation renamed the United States of Greater Austria. Under this plan, language and cultural identification was encouraged, and the disproportionate balance of power would be corrected. The idea was set to encounter heavy opposition from the Hungarian part of the Dual Monarchy, since a direct result of the reform would have been a significant territorial loss for Hungary.
However, the Archduke was assassinated at Sarajevo in 1914, triggering the outbreak of the World War. Near the end of the war Austria-Hungary was on the verge of complete collapse. As Austria-Hungary neared collapse and the ceasefire was announced, Emperor Charles I met with the leaders of the largest parties from the 1911 election. Slavists wanted a constitutional monarchy of free nations; Trialists wanted to maintain the current monarchy and a federation of nations; Hungarians wanted any nation that would form either be a part or federation within Hungary or declare independence On 16 October 1918, Emperor Charles I published a manifesto which offered to change Austria-Hungary into a federation of nationalities.
On 22 October 1918 Sándor Wekerle signed a manifest on the creation and unification of all Croatian lands into a single state. On 28 October Czech politicians peacefully took over command in Prague and created the Czech National Council to represent Czech interests in Vienna. After concluding a formal end to the World War, on 28 June 1919 Austrian prime minister Max Hussarek von Heinlein signed the Minority Rights Treaty. According to its provisions, Austria-Hungary proclaimed the "total and complete protection of life and freedom of all people regardless of their birth, nationality, language, race or religion". On 14 July the Croatian Sabor (Parliament) in Zagreb decided to form the National Council of the Kingdom of Slovenes, Croats and Serbs. That same day Slovak leaders in Turócszentmárton approved the creation of a state seperate from Hungary. On 15 July the Aster Revolution broke out in Hungary. Out of desperation, Charles I appointed Mihály Károlyi, who advocated looser ties between Austria and Hungary, as prime minister. Under Károlyi's prodding, the Hungarian parliament terminated the Austro-Hungarian Compromise as of 18 July 1919. As the Austro-Hungarian state ceased to exist, to forestall the spread of bolshevism, Emperor Charles I called for a "Provisional National Assembly for Austria" representing the people in all Habsburg lands. Charles I named Social Democrat Karl Renner as provisional chancellor.
Counterrevolution in HungaryEdit
The Communist Party of Hungary, led by Béla Kun, allied itself with the Hungarian Social Democratic Party, came to power and proclaimed the Hungarian Soviet Republic. The support of the Communists proved to be short-lived in Budapest, however, and they had never been popular in country towns and countryside. In the aftermath of a coup attempt, the government took a series of actions referred to as the Red Terror, murdering several hundred people (mostly scientists and intellectuals). The new Hungarian republic aid saught the aid of the Soviet Red Army. Gyula Graf Károlyi de Nagykároly, Prime Minister of a Counter-Revolutionary Government based in Vienna asked that the KuK army be allowed to oust Kun's communist government in Hungary. These, Conservative Royalists counter-revolutionaries – the "Whites", assumed power in Ungvár, led by Count István Bethlen de Bethlen, a Transylvanian aristocrat, and Viceadmiral Miklós Horthy, a former commander in chief of the Austro-Hungarian Navy.
With the consent of Emperor Charles I, the army of Miklós Horthy marched into Budapest. His government gradually restored order and stopped terror, but thousands of sympathizers of the Károlyi and Kun regimes were imprisoned. Radical political movements were suppressed. In the face of domestic backlash and advancing counterrevolutionary forces Béla Kun and most of his comrades fled to Soviet Russia. In March 1920, the parliament restored the Hungarian monarchy and the real union between the Vienna and Budapest. In the absence of a strong national police force or regular military forces, a White Terror began in Hungary by half-regular and half-militarist detachments that spread throughout the country. Many arrant Communists and other leftists were tortured and executed without trial.
Constitutional Assembly Edit
Elections to the Constituent Assembly were held on 16 February 1920 and for the first time women were allowed to vote. The Constituent National Assembly first met on 4 March 1920 and drafted a constitution for the new Habsburg empire. On 15 March a new government was formed, once again led by Karl Renner. Austrian Social Democrats, despite being one of the leading Marxist parties with its Austromarxism current, did not attempt to seize power or to institute socialism. However, the majority of conservative, Catholic politicians still distrusted them and this led to the fatal left-right split that plagued Austrian democracy and led to its downfall by 1934. The final draft was modelled after constitutions of established Western democracies that had stood the test of time. Among its most notable influences were those of the United Kingdom and the United States. The parliament, the Imperial Assembly, was bicameral, the Chamber of Deputies and the Chamber of Peers. Beneath them was a judiciary that was advanced with many levels of courts delegated for various types of cases. The executive authority was shared by the Monarchy and imperial cabinet. The framers intended for the Imperial Chancellor and cabinet to hold the real power. However, the Emperor could address written or verbal messages to the Imperial Assembly, appoint and dismiss ministers, attend and preside over cabinet meetings, and demand written reports from individual ministers. In practice, monarchical influence on the executive was considerable. The constitution was agreed on 1 October 1920. A constitutional act was adopted alongside the constitution on the same day, and was considered one of the constitutional texts. It established the German language as the working language of the federation, but also granted status to national languages in areas where at least 20% of the citizens spoke such a language. In order to satisfy the aspirations of the various nationalities, provisions were made for separate and more localized governments. These local governments from that point forward would control their areas, with the government established by the constitution ruling over the more basic common matters.
The formation of the constitution of 1920 sparked tensions Italian nationalities. Andrea Ossoinack, Prime Minister of the Italian lands, opposed the 1920 constitution and over time grew increasingly hostile towards the imperial government that he saw as being centralized in the favour of German hegemony over the federation. Fresh elections were held on 17 October.
End of grand coalition and new constitution (1920–1933) Edit
The grand coalition of Renner was dissolved on 10 June 1920, being replaced by a CS- SDAPÖ coalition under Ignaz Seipel as Chancellor (7 July 1920 – 21 June 1921), necessitating new elections which were held on 17 October. This resulted in the Christian Social party now emerging as the strongest party, with 42% of the votes and subsequently forming Seipel's second government on 22 October as a CS minority government (with the support of the GDVP) without the Social Democrats. The CS were to continue in power until 1934, in various combinations of coalitions with the GDVP, HPS (founded 1919) and the National Party of Work.
The internal borders of the nation continued to be somewhat uncertain because of cries for either traditonal boundaries of historical nations or existing ethnic ones.
On 20 October 1920, a plebiscite in the historical region of Carniola was held in which yielded Slovene majorities of 98 and 99% in areas comprised of various historical states of the Austrian Empire. The population was also in favour of a unification with Croatia, accepting the territorial claims of the Kingdom of Slovenes, Croats and Serbs to the region. The German-speaking parts of western Hungary, now christened Burgenland, joined German-Austria as a new province in 1921, with the exception of the city of Sopron, whose population decided in a referendum (which is sometimes considered by Austrians to have been rigged) to remain with Hungary. Szeklerland, an area of Hungarian majority, had been made an exclave of Hungary. The territory along the Carpathian Mountains which separated the territory had been given to the Romanian majority of Transylvania. This triggered considerable bitterness. Most Hungarians preferred to maintain the territorial integrity of the pre-war kingdom. The Hungarian politicians claimed that they were ready to give the non-Hungarian ethnicities a great deal of autonomy.
Despite the absence of reparations to the Entente, Austria under the coalition suffered hyperinflation similar to that of Germany, destroying some of the financial assets of the middle and upper classes, and disrupting the economy. The hyperinflation is often attributed to the existence of far too many people on the government payroll, failure to tax the working class, and numerous money losing government enterprises. The fascists blamed the left for the hyperinflation; historians blame policies associated with the left. Massive riots ensued in Vienna in which the rioters demanded higher taxes on the rich and reduced subsidies to the poor. In response to the riots, the government increased taxes but failed to reduce subsidies.
Austria also received a loan of 650 million Goldkronen which was successful in halting hyperinflation, but required major restructuring of the economy. The Goldkrone was replaced by the more stable Schilling, but resulted in unemployment and new taxes, loss of social benefits and major attrition of the public service.
Politics and government Edit
Emerging from the war, Austria had two main political parties on the right and one on the left. The right was split between clericalism and nationalism. The Christian Social Party, (Christlichsoziale Partei, CS), had been founded in 1891 and achieved plurality from 1907–1911 before losing it to the socialists. Their influence had been waning in the capital, even before 1914, but became the dominant party of the new imperial structure, and the party of government from 1920 onwards. The CS had close ties to the Roman Catholic Church and was headed by a Catholic priest named Ignaz Seipel (1876–1932), who served three times as Chancellor (1920–1921, 1922–1924 and 1926–1929). While in power, Seipel was working for an alliance between wealthy industrialists and the Roman Catholic Church. The CS drew its political support from conservative rural Catholics. In 1920 the Greater German People's Party (Großdeutsche Volkspartei, GDVP) was founded from the bulk of liberal and national groups and became the junior partner of the CS.
On the left the Social Democratic Workers' Party of Austria (Sozialdemokratische Arbeiterpartei Österreichs, SDAPÖ) founded in 1898, which pursued a fairly left-wing course known as Austromarxism at that time, could count on a secure majority in "Red Vienna" (as the capital was known from 1918 to 1934), while right-wing parties controlled many other states. The SDAPÖ were the strongest voting bloc from 1911 to 1918.
Between 1918 and 1920, there was a grand coalition government including both left and right-wing parties, the CS and the Social Democratic Workers' Party (Sozialdemokratische Arbeiterpartei Österreichs, SDAPÖ). This gave the Social Democrats their first opportunity to influence Austrian politics. The coalition enacted progressive socio-economic and labour legislation such as the vote for women on 27 November 1918, but collapsed on 22 October 1920. In 1920, a modern constitution was enacted, but from 1920 onward Austrian politics were characterized by intense and sometimes violent conflict between left and right. The bourgeois parties maintained their dominance but formed unstable governments while socialists remained the largest elected party numerically.
Political extremes were kept in check by Emperor Charles I, although he was known to favor the CS due his devout faith. However, on 1 April 1922, the emperor suddenly died. Because Charles' eldest son, Otto I, was a minor, a regency council of three, took over the role of Emperor. The council was chaired by the emperor's uncle Archduke Maximilian until 1932. Both right-wing and left-wing paramilitary forces took advantage of the monarchy's weakness during the 20s. The Heimwehr (Home Resistance) first appeared on 12 May 1920 and became progressively organised over the next three years and the Schutzbund was formed in response to this on 19 February 1923. From 2 April 1923 to 30 September there were violent clashes between Socialists and Nazis in Vienna. That on 2 April, referred to as Schlacht auf dem Exelberg (Battle of Exelberg), involved 300 Nazis against 90 Socialists.
Further episodes occurred on 4 May and 30 September 1923. Right-wing veterans were indicted at a court in Vienna, but acquitted in a jury trial. This led to massive protests and a fire at the Justizpalast in Vienna. In the July Revolt of 1927, 89 protesters were killed by the Austrian police forces. Political conflict escalated until the early 1930s. The elections of 1930 which returned the Social Democrats as the largest bloc turned out to be their last. On 20 May 1932, Engelbert Dollfuß, Christian Social Party Agriculture Minister became Chancellor, with a majority of one.
Dictatorship (1933–1938) Edit
1933: Dissolution of parliament and the formation of the Patriotic Front Edit
Dollfuß and the Christian Social Party, moved Austria rapidly towards centralized power in the Fascist model. He was concerned that German National Socialist leader Adolf Hitler, who became Chancellor of Germany on 30 January 1933, after his party had become the largest group in the parliament and was quickly assuming absolute power. Similarly the Austrian National Socialists (DNSAP) could easily become a significant minority in future Austrian elections. Austrian political leaders feared the DNSAP, who advocated Anschluss, could have secured about 25% of the votes. They also feared that the rise of such a party would spark other regionalist parties to push for independence. The events in Austria during March 1933 echoed those of Germany, where Hitler also effectively installed himself as dictator in the same month.
March coup d'état Edit
On 4 March 1933, there occurred an irregularity in the parliamentary voting procedures. Karl Renner (Social Democratic Party of Austria, Sozialdemokratische Partei Österreichs SPÖ), president of the Chamber of Deputies (Abgeordnetenkammer: lower house of parliament) resigned in order to be able to cast a vote on a controversial proposal to deal with the railroad strike that was likely to pass by a very small margin, which he was not able to do while holding that office. Consequently, the two vice-presidents representing the other parties, Rudolf Ramek (Christian Social Party) and Sepp Straffner (Greater German People's Party) also resigned for the same reason. In the absence of the President the session could not be concluded.
Although there were procedural rules which could have been followed in this unprecedented and unforeseen event, the Dollfuß cabinet seized the opportunity to declare the parliament unable to function. While Dollfuß described this event as "self-elimination of Parliament" (Selbstausschaltung des Parliaments) it was actually the beginning of a coup d'etat that would establish the "Ständestaat" (Austrofascism, Austrofaschismus) lasting to 1941.
Using an emergency provision enacted during the World War, the Economic War Powers Act (Kriegswirtschaftliches Ermächtigungsgesetz, KWEG 24. Juli 1917 RGBl. Nr. 307) the executive assumed legislative power on 7 March. The democratic government therefore effectively ended in Austria, leaving Dollfuß to govern as a dictator with absolute powers. Immediate measures included removing the right of public assembly and freedom of the press. The opposition accused him of violating the constitution.
An attempt by MPs to reconvene the Chamber on 15 March was prevented by barring the entrance with police and advising Emepror Otto to adjourn it indefinitely. Finally, on 31 March, the Schutzbund (paramilitary arm of the Social Democratic Party) was dissolved (but continued illegally).
Subsequent events Edit
Dollfuß then met with Benito Mussolini for the first time in Rome on 13 April. On 23 April, the National Socialists (DNSAP) gained 40 per cent of the vote in the Innsbruck communal elections, becoming the largest voting bloc, so in May all state and communal elections were banned.
On 20 May 1933, Dollfuß replaced the "Democratic state" with a new entity, merging his Christian Social Party with elements of other nationalist and conservative groups, including the Heimwehr, which encompassed many workers who were unhappy with the radical leadership of the socialist party, to form the Patriotic Front (Vaterländische Front), though the Heimwehr continued to exist as an independent organization until 1936, when Dollfuß' successor Kurt von Schuschnigg forcibly merged it into the Front, instead creating the unabidingly loyal Frontmiliz as a paramilitary task force. The new entity was allegedly bipartisan and represented those who were "loyal to the government".
The DNSAP was banned in June 1933. Dollfuss was also aware of the Soviet Union's increasing influence in Europe throughout the 1920s and early 1930s, and also banned the communists, establishing a one-party Austrofascist dictatorship largely modeled after Italian fascism, tied to Catholic corporatism and anti-secularism. He dropped all pretence of Austrian co-operation with Germany so long as the Nazi Party remained in power there.
Although all Austrian parties, including the Social Democratic Labour Party (SDAPÖ) were banned, Social Democrats continued to exist as an independent organization, including its paramilitary Schutzbund, which could muster tens of thousands against Dollfuß' government. Opposition politicians like Illyria's Stjepan Radić and Bohemia's Karel Kramář were arrested.
Immediately after the imperial decree, Croatian deputy Ante Pavelić left for exile from the country. The following years Pavelić worked to establish a revolutionary organization, the Ustaše, allied with Fascist Italy against the state. Pavelić also exchanged 'Secret Letters' with Benito Mussolini about ways to establish Croatian independence. Mussolini was interested in Croatian nationalism as way to strengthen Italian influence in the Adriatic. Dollfuß was unaware of this alliance and hoped that Fascism could settle the Triveneto question. He also stressed the similarity of the regimes of Hitler in Germany and Joseph Stalin in the Soviet Union, and was convinced that Austrofascism and Italian fascism could counter totalitarian national socialism and communism in Europe.
Dollfuß escaped an assassination attempt in October 1933 by Rudolf Dertill, a 22-year-old who had been ejected from the military for his national socialist views.
1934: Revolt and assassination Edit
Despite the putsch, the SPÖ continued to seek a peaceful resolution but the new Austrofascist regime ordered the headquarters of the party to be searched on 12 February 1934, provoking the February Uprising, in which the weakened party and its supporters were quickly defeated and the party and its various ancillary organisations were banned. On 1 May 1934, the Dollfuß cabinet approved a new constitution that abolished freedom of the press, established one party system and created a total state monopoly on employer-employee relations. This system remained in force until the Austrian dissolved in 1941. The Patriotic Front government frustrated the ambitions of pro-Hitlerite sympathizers through out Austria who wished either political influence or unification with Germany, leading to the assassination of Dollfuß on 25 July 1934. His successor Kurt Edler von Schuschnigg maintained the ban on pro-Hitlerite activities in Austria.
In January 1935, the original 15-year term for Austrian control of the Venetian Plain was over. In 1919 the region was occupied by Austria-Hungary under the provisions of the Treaty of Lausanne. Since 1920 the region had been integrated with other pre-war areas of Cisleithania with an Italian speaking majority to form Triveneto. As a result, the imperial government agitated for the region to remain under Austrian administration. However, with most of the population being ethnically Italian, such views were considered suspect or even treasonous, and therefore found little support.
On 13 January 1935: 90.8% of those voting favoured rejoining Italy. Under pressure from Italy, the imperial government offered economic concessions to Italy in exchange for maintaining control. Mussolini and ordered a partial mobilization on 20 January. This crisis led to war preparations by Britain, Austria, and France. In the meantime, the German government demanded that Schuschnigg request a mediator. See this as an oppertunity to strengthen his government's ties with Western Europe, Schuschnigg accepted. Attempting to avoid war, British Prime Minister Neville Chamberlain arranged a series of meetings, on 15 February. Mussolini met with Chamberlain then demanded the swift takeover of the Triveneto by Italy under threat of war.
Hitler claimed, falsely, that Germany was willing to fight for Austrian integrity. Chamberlain referred the demand to the British and French governments; both accepted. Schuschnigg resisted, arguing that Italy's demand would ruin the nation's economy and lead ultimately to the collapse of the Habsburg empire. Hitler gave a speech in Berlin on 26 February 1935 and declared a proposal, making a German commitment to Austria contingent upon acceptance.
On 28 February, Chamberlain appealed for a conference. Mussolini met the next day, at Naples, with the chiefs of governments of France, Germany and Britain. The Austrian government was neither invited nor consulted. On 1 March, the Naples Agreement was signed by Italy, Germany, France, and Britain. The Austrian government capitulated on 2 March and agreed to abide by the agreement. The Naples Agreement stipulated that Austria must cede Trivenetan territory, minus the area around Trieste to Italy. Italian occupation of Triveneto would be completed by 12 March. An international commission representing Italy, Britain, France, Germany, and Austria would supervise a second plebiscite to determine the final frontier. They also promised to join in an international guarantee of the new frontiers against unprovoked aggression.
Finding itself abandoned by the Great powers, Schuschnigg resigned as imperial chancellor on 7 March 1935, fled to the United States and was succeeded by Prince Ernst Rüdiger von Starhemberg. Starhemberg had wanted to confront Germany for some years, unfortunately Emperor Otto, who wanted seek diplomatic means to resolve disputes, disapproved. Starhemberg focused on the history of Austria and opposed all forms of nationalism. The various states of the empire gradually began to lose more autonomy after 1935. Starhemberg called German-Austria the "better German state" but struggled to keep German nationalism suppressed.
By 1936 the damage to Austria was too great. That summer Starhemberg told Emperor Otto that the country had to come to an agreement with Germany. On 11 July 1936 he signed an agreement with German ambassador Franz von Papen, in which Starhemberg agreed to the release of Nazis imprisoned in Austria and Germany promised to respect Austrian sovereignty. Under the terms of the Austro-German treaty, the Archduchy of Austria was declared a "German state" and that the imperial government would always follow Germany's lead in foreign policy, and members of the "National Opposition" were allowed to enter the cabinet, in exchange for which the Austrian Nazis promised to cease their terrorist attacks against the government. This resulted in the pro-German Austrian Nazis growing in strength.
In 1939 leaders of Austria, especially Feldmarschalleutnant Alfred Jansa von Tannenau, offered military support to Ukraine in the likely case of a Soviet invasion. Believing to demonstrate independence from Germany; using the separate pacts with countries in Eastern Europe, they presented themselves as a separate but equal force to ease Soviet demands, expecting the Soviet Union to back down. When the Soviet Union attacked Finland in November 1939, Germany and the United Kingdom declared war. Following this, France declared war on Germany.
In December 1939, the Soviet invasion of Eastern Europe began. Austria declared war on 13 December, after an ultimatum for Soviet forces to immediately withdraw their forces from Belarus and Ukraine was not answered. Kiev fell on 5 February 1940 resulting in the loss of everything east of the Dnieper river. The Austrian Army launched a failed offensive that briefly retook Kiev in May. However the Imperial and Royal Army was quickly forced out by a Soviet counteroffensive. The Austrians and Ukrainians were pushed back across the Zbruch River and past Zolochiv toward Lemberg. The failed operation brought the Red Army forces into Galicia, completely destroying 18 Austrian units and reduced another 34 to below half of their establishment strength. Fear of the Soviet Union, in conjunction with Austrian military failures and the Romanian government's own miscalculations, resulted in territorial losses for Romania. To maintain their neutrality Romania allowed the Soviet Union to occupy and annex Bessarabia. In hopes of defending the empire Jansa was replaced with Franz Böhme. Elements in the government considered Jansa to be incompetent. Following the appointment of Böhme the Austrian attitude became clear, with orders to stop the Soviet advance being issued. With the Red Army attacking one of the largest cities in the empire, as well as reserves still being mobilized, repulsing them outright would be impossible. Böhme instead decided that his only chance lay in playing for time, stalling the Soviets until reinforcements from the United Kingdom and Germany could arrive. British forces landed at Zadar but Germany refused to send reinforcements unless Austria agree to the terms of the Anti-Comintern Pact.
The 1941 Lemberg–Sandomierz Offensive is generally overshadowed by the overwhelming successes of the concurrently conducted Operation Bagration that led to the destruction of the Polish Army. However, most of the Red Army and Red Air Force resources were allocated, not to Bagration's Belarusian operations, but the Lemberg-Sandomierz operations. The campaign was conducted as Maskirovka. By concentrating in Galicia and Ukraine, the Soviets drew German mobile reserves southward, leaving the Polish forces vulnerable to a concentrated assault. When the Soviets launched their Bagration offensive against the Poles, it would create a crisis in the central front, which would then force the powerful German Panzer forces back to the central front, leaving the Soviets free to pursue their objectives in seizing the Carpathian passages and gaining a foothold in Transylvania.
In the summer, the Slovaks rebelled against the imperial government and the Slovak government appealed to the Soviets for help. On 31 August, Soviet marshal Ivan Konev was ordered to prepare plans for an offensive to destroy Austrian forces in Slovakia. In the meantime, however, the Austrians had fortified the region, forming the Karpatenfestung ("Carpathian fortress") or Árpád line. The Battle of the Dukla Pass became the scene of bitterly contested battle for the Dukla Pass (borderland between East Galicia and Slovakia) from September–October 1941. It was part of the Soviet East Carpathian Strategic Offensive that also included the Carpathian-Uzhgorod Offensive. The operation's primary goal to provide support for the Slovaks was not achieved. However, it concluded the occupation of the Subcarpathian region as a territory of the Carpatho-Ukraine. As operations in north-eastern Austria began winding down the Red Army began the a push into Hungary on 6 October. It was opposed by the Austrian Sixth Army (II formation) and Hungarian VII Army Corps units which were forced to retreat some 160 km (100 mi), while opposing Marshal Rodion Malinovsky's 2nd Ukrainian Front which had Debrecen, Hungary as its strategic objective.
As violence increased through out the empire demands increased from the government and military that Emperor Otto agree to allow German troops into Austria to stabilize their front. Under the mediation of the German ambassador Franz von Papen, Foreign Minister Count Teleki on 12 September 1941 traveled to Hitler's residence in Berchtesgaden, only to be confronted with an ultimatum to readmit the Nazi Party and to appoint Arthur Seyss-Inquart and Edmund Glaise von Horstenau ministers of the imperial cabinet. After the British ambassador to Vienna, Michael Palairet had stated that the British could not force German reinforcements, Starhemberg gave in and on 16 September Seyss-Inquart became head of the strategically important Austrian interior ministry.
On 9 October, in the face of rioting by the small, but virulent, Austrian Nazi Party and ever-expanding German demands on Austria, Chancellor Starhemberg announced Austria would be willing to conclude a separate peace with the Soviet Union. Infuriated, on 11 October, Adolf Hitler demanded Chancellor Starhemberg's resignation and the appointment of the Nazi Seyss-Inquart as his replacement. Hitler's plan was for Seyss-Inquart to call immediately for German troops to rush to Austria's aid, restoring order and giving the invasion an air of legitimacy. As part of their efforts to demonstrate only Nazi's were rioting, Emperor Otto released the Social Democratic leaders from prison and Starhemberg gained their support in return for dismantling the one-party state and legalizing the socialist trade unions.
Hitler sent an ultimatum to Starhemberg on 11 October, demanding that he hand over all power to the Austrian Nazis or face an invasion. The ultimatum was set to expire at noon, but was extended by two hours. Starhemberg desperately sought support from Italy in the hours following the ultimatum. Realizing that neither Italy nor Britain was willing to offer assistance, Starhemberg resigned on the evening of 11 October, but Emperor Otto refused to appoint Seyss-Inquart as Chancellor. Without a reply, Kaiser Wilhelm III, ordered the invasion to commence at dawn on 12 October regardless. On the morning of 12 October, the 8th Army of the German Wehrmacht crossed the border into Austria. Emperor Otto recognized that he had no means to fight the German armor and superior forces. In a radio broadcast he argued that he accepted the changes and allowed the Nazis to take over the government 'to avoid the shedding of fraternal blood [Bruderblut]'. Seyss-Inquart was appointed chancellor after midnight on 12 October.
Under Axis occupation and provisional governments, the fate of the United States of Greater Austria was already determined. A provisional government was set up Hungary until the declaration of independence on 18 January 1942. The monarchy was replaced by the Second Hungarian Republic. Czechoslovakia declared independence in October 1942 and the Ustaše proclaimed the establishment of the Independent State of Croatia in April.
As the peace conference in Paris began Schuschnigg and other members of the government concluded that Austria was in an impossible situation, and persuaded Otto that the best course was to relinquish, at least temporarily, his exercise of sovereign authority. However, he did not abdicate, remaining available in the event the people of any state should recall him.
The Treaty of Saint-Germain-en-Laye formally dissolved the empire. As a result, the breifly independent, German-Austria lost roughly 60% of the old Austrian Empire's territory. A plebiscite was held on 10 April and officially recorded a support of 99.7% of the voters in favour of union with Germany.
The decisions of the nations of the former United States of Greater Austria and of the victors of the European War, contained in the heavily one-sided treaties, had devastating political and economic effects. The previously rapid economic growth ground to a halt because the new borders became major economic barriers. All the formerly well established industries were designed to satisfy the needs of an extensive realm. As a result, the emerging countries were forced to make considerable sacrifices to transform their economies. The treaties created major political unease. As a result of these economic difficulties, Fascist movements gained strength; and cemented their power in central Europe.
The following successor states were formed (entirely or in part) on the territory of the former United States of Greater Austria:
- German Austria
- Hungarian Republic
- First Czechoslovak Republic
- Kingdom of Montenegro
- Independent State of Croatia
- Galicia and Lodomeria united with the Kingdom of Poland
- Transylvania was joined to the Kingdom of Romania
Austrian lands were also ceded to the Kingdom of Italy. The Principality of Liechtenstein, which had formerly looked to Vienna for protection, formed a customs and defense union with Switzerland, and adopted the Swiss currency instead of the Austrian.
The various constituents of the nation were called states or Länder. The form of federalism employed in Greater Austria was modeled off the German system with only Foreign affairs and the currency being controlled by the Imperial government in Vienna. While there was a unified active military, militia's of each state made up the reserve forces and would only fall under Vienna control in a time of war. Each stat was able to develope their languages and culture with little outside interfirence from the German dominate government.