Glossary -- Austria
- Bretton Woods system
- Established in 1944, the system aimed at stabilizing exchange
rates by fixing the price of gold at US$35 per troy ounce. Other
currencies were linked to the system according to their exchange
rates with the United States dollar. The system was replaced by one
of floating exchange rates in the early 1970s. See also
European Monetary System (EMS).
- d'Hondt method
- Also known as the highest-average method of determining the
allocation of seats to political parties after an election. The
d'Hondt method was devised by a Belgian, Victor d'Hondt, to be used
in electoral systems based on proportional representation. In
addition to Belgium, the method has been adopted by Austria,
Finland, Portugal, and Switzerland. Under this method, voters do
not choose a candidate but vote for a party, each of which has a
published list of candidates. The party winning the most votes in
a constituency is awarded the area's first seat, which goes to the
candidate at the top of the winning party's list. The total vote of
this party is then divided by two, and the amount is then compared
with the totals of the other parties. The party with the greatest
number of votes at this point receives the next seat to be awarded.
Each time a party wins a seat, its total is divided by the number
of seats it has won plus one. The process continues until all the
seats in a constituency are awarded. The d'Hondt method slightly
favors large parties.
- European Community (EC)
- See European Union (EU).
- European Economic Area (EEA)
- An economic area encompassing all the members of the European
Union (EU--q.v.) and the European Free Trade Association
(EFTA--q.v.), with the exception of Switzerland. Created
in May 1992, the EEA went into effect on January 1, 1994. The EEA
is a single market for the free movement of labor, services,
capital (with some restrictions on investments), and most products.
EFTA members have agreed to accept EU regulations in many areas,
including company law, education, environmental protection,
mergers, and social policy.
- European Economic Community (EEC)
- See European Union (EU).
- European Free Trade Association (EFTA)
- Founded in 1960, EFTA aims at supporting free trade among its
members and increasing the liberalization of trade on a global
basis, particularly within Western Europe. In 1993 the
organization's member states were Austria, Finland, Iceland,
Liechtenstein, Norway, Sweden, and Switzerland.
- European Monetary System (EMS)
- Established in 1979 by the European Economic Community (EEC--
q.v.), the EMS was created to stabilize currency values
because the Bretton Woods system (q.v.) proved not fully
- European Monetary Union (EMU)
- The EMU is a plan for a single European central bank and for a
single European currency to replace national banks and currencies
for those European states that qualify.
- European Union (EU)
- Until November 1993, the EU was known as the European Community
(EC). The EU comprises three communities: the European Coal and
Steel Community (ECSC), the European Economic Community (EEC), and
the European Atomic Energy Community (EURATOM). Each community is
a legally distinct body, but since 1967 they have shared common
governing institutions. The EU forms more than a framework for free
trade and economic cooperation: the signatories to the treaties
governing the communities have agreed in principle to integrate
their economies and ultimately to form a political union. Belgium,
France, Italy, Luxembourg, the Netherlands, and the Federal
Republic of Germany (West Germany) were charter members of the EU;
Britain, Denmark, and Ireland joined on January 1, 1973; Greece
became a member on January 1, 1981; and Portugal and Spain entered
on January 1, 1986.
- exchange rate mechanism (ERM)
- Mechanism established in 1979 to regulate currency exchange
rates in the European Monetary System (EMS--q.v.). Member
currencies are permitted to fluctuate in value only within a narrow
margin (the so-called snake).
- gross domestic product (GDP)
- The total value of goods and services produced by the domestic
economy during a given period, usually one year. Obtained by adding
the value contributed by each sector of the economy in the form of
profits, compensation to employees, and depreciation (consumption
of capital). Most GDP figures in this book are based on GDP at
factor cost. Real GDP is the value of GDP when inflation has been
taken into account.
- gross national product (GNP)
- Obtained by adding the gross domestic product (GDP--
q.v.) and the income received from abroad by residents,
less payments remitted abroad to nonresidents. Real GNP is the
value of GNP when inflation has been taken into account.
- Hare system
- Also known as the single transferable vote formula. The Hare
system was developed in the nineteenth century by Thomas Hare, a
British political reformer, to create constituencies with multiple
representatives in electoral systems based on seeking proportional
representation. Ballots are used on which a voter may rank his or
her choices in order of preference. Any candidate who has received
enough first-preference votes to meet a quota wins a seat. Votes
above this quota are transferred to the candidates with second-
preference votes, and each of those who meet the quota is awarded
a seat. The process continues until all seats in a constituency are
- Organisation for Economic Co-
operation and Development (OECD)
- Established in 1961 to replace the Organisation for European
Economic Co-operation (OEEC), the OECD is an international
organization composed of the industrialized market economy
countries (twenty-four full members as of 1993). The OECD seeks to
promote economic and social welfare in member countries, as well as
in developing countries, by providing a forum in which to establish
and coordinate policies.
- Organisation for European Economic
- See Organisation for Economic Co-operation Development
- schilling (S)
- National currency. Consists of 100 groschen. In relation to the
United States dollar, the annual average exchange rate was S13.2 in
1989, S11.4 in 1990, S11.7 in 1991, S11.0 in 1992, and S11.4 in
- Western European Union (WEU)
- Founded in 1948 to facilitate West European cooperation in
economic, social, cultural, and defense matters. Reactivated in
1984 to concentrate on the defense and disarmament concerns of its
members, the WEU is headed by a council consisting of its members'
ministers of foreign affairs and defense. The council meets twice
a year; lower-level WEU entities meet with greater frequency. In
late 1993, WEU members consisted of Belgium, Britain, France,
Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal, and