[2] On 3 April, at the beginning of the Vienna Offensive, the Austrian politician Karl Renner, then living in southern Lower Austria, established contact with the Soviets.

Seven days later Renner's cabinet took office, declared the independence of Austria from Nazi Germany and called for the creation of a democratic state along the lines of the First Austrian Republic.

[4] The British were particularly hostile;[4] even American President Harry Truman, who believed that Renner was a trustworthy politician rather than a token front for the Kremlin, denied him recognition.

Repression against civilians harmed the Red Army's reputation to such an extent that on 28 September 1945 Moscow issued an order forbidding violent interrogations.

[13] Red Army morale fell as soldiers prepared to be sent home; replacement of combat units with Ivan Konev's permanent occupation force only marginally reduced 'misbehaviour'.

[20][2] Until the end of July 1945 none of the Western allies had first-hand intelligence from Eastern Austria (likewise, Renner's cabinet knew practically nothing about conditions in the West).

[35] Coincidentally with the Second Control Agreement, the Soviets changed their economic policy from outright plunder to running expropriated Austrian businesses for a profit.

[36] It controlled not more than 5% of Austrian economic output but possessed a substantial, or even monopolistic, share in the glass, steel, oil, and transportation industries.

[37] The USIA was weakly integrated with the rest of the Austrian economy; its products were primarily shipped to the East, its profits de facto confiscated and its taxes left unpaid by the Soviets.

The "thirty-second decision" of the Council of Foreign Ministers to grant South Tyrol to Italy (4 September 1945) disregarded popular opinion in Austria and the possible effects of a forced repatriation of 200,000 German-speaking Tyroleans.

[48] The food shortages were aggravated by the withdrawal of UNRRA aid, spiraling inflation, and the demoralizing failure of State Treaty talks.

[55] Direct aid and subsidies helped Austria to survive the hunger of 1947 while simultaneously depressing food prices and discouraging local farmers, thereby delaying the rebirth of Austrian agriculture.

Naturally, the administrators of the Marshall Plan channeled available financial aid into heavy industry controlled by the American and British forces.

[64] Marshall Plan aid gradually removed many of the causes of popular unrest that shook the country in 1947,[65] but Austria remained dependent on food imports.

[66] According to Michael J. Hogan, "in the most profound sense, it involved the transfer of attitudes, habits and values as well, indeed a whole way of life that Marshall planners associated with progress in the marketplace of politics and social relationships as much as they did with industry and agriculture.

"[67] The program, as intended by American lawmakers,[68] targeted improvement in factory-level productivity, labor-management relations, free trade unions and introduction of modern business practices.

[69] The Economic Cooperation Administration, which operated until December 1951, distributed around $300 million in technical assistance and attempted steering the Austrian social partnership (political parties, labor unions, business associations, and government) in favor of productivity and growth instead of redistribution and consumption.

They set up and filled emergency food dumps, and prepared to airlift supplies to Vienna[81] while the government created a backup base in Salzburg.

[85] Austrian communists appealed to Stalin to partition their country along the German model, but in February 1948 Andrei Zhdanov vetoed the idea:[3] Austria had more value as a bargaining chip than as another unstable client state.

The continuing talks on Austrian independence stalled in 1948 but progressed to a "near breakthrough" in 1949: the Soviets lifted most of their objections, and the Americans suspected foul play.

The government and the unions deadlocked in negotiations, and gave the communists the opportunity to organize the 1950 Austrian general strikes which became the gravest threat since the 1947 food riots.

[89] The communists stormed and took over ÖGB offices and disrupted railroad traffic but failed to recruit sufficient public support and had to admit defeat.

[82] Despite the strain of the Korean War, by the end of 1952 the American "Stockpile A" (A for Austria) in France and Germany amassed 227 thousand tons of materiel earmarked for Austrian armed forces.

[76] Chancellor Julius Raab, elected in April 1953, removed pro-Western foreign minister Gruber and steered Austria to a more neutral policy.

[94] Raab carefully probed the Soviets about resuming the talks on independence,[95] but until February 1955 it remained contingent on a solution to the larger German problem.

[97] In January 1955, Soviet diplomats Andrey Gromyko, Vladimir Semenov and Georgy Pushkin secretly advised Vyacheslav Molotov to unlink the Austrian and German issues, expecting that the new talks on Austria would delay ratification of the Paris Agreement.

[98][page needed][99] In March 1955, Molotov clarified his plan through a series of consultations with ambassador Norbert Bischoff: Austria was no longer hostage to the German issue.

By this time Paris Agreements were ratified by France and Germany, although the British and Americans suspected a trap[100] of the same sort that Hitler had set for Schuschnigg in 1938.

[105][f] Austrians agreed to pay for the "German assets" and oil fields left by the Soviets, mostly in kind;[g][107] "the real prize was to be neutrality on the Swiss model.

[105] But it proceeded as had been agreed in Moscow and on 15 May 1955 Antoine Pinay, Harold Macmillan, Molotov, John Foster Dulles, and Figl signed the Austrian State Treaty in Vienna.