Conflict and bitterness between the various nationalities of the empire came to a head on June 28, 1914, when a pistol shot echoed round the world from SARAJEVO, now in Yugoslavia. The shot, fired by a Serbian nationalist, killed the heir to the Hapsburg throne, Archduke Franz Ferdinand. Austro-Hungarian forces invaded Serbia; other European nations took sides in the conflict, and started the First World War.
Hapsburg power did not survive the upheaval. By the treaty of Saint Germain-en-Laye in 1919, seven-eighths of the Hapsburgs' Austro-Hungarian Empire was parceled up among its neighbours. One-eighth, the German-speaking rump, became the republic of Austria. The republic was a disaster.
Economically, it teetered on the brink of bankruptcy, and chronic unemployment led to political unrest. Faction-fighting between socialists and conservatives led to outright civil war in 1934 and a brief right-wing dictatorship under Engelbert Dollfuss. Nazi sympathisers assassinated him after only a few months, however, and in 1938 Adolf Hitler himself an Austrian by birth - sent in German troops to occupy and annex the country.
Liberated by the Allies in 1945, Austria was allowed to set up its own government again in 1955, after guaranteeing that the country would be strictly neutral - an undertaking which remains in force today.
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