Germanic tribes were not the first peoples to occupy the eastern Alpine-Danubian region, but the history and culture of these tribes, particularly the Bavarians and Swabians, are the foundation of Austria's modern identity. Austria thus shares in the broader history and culture of the Germanic peoples of Europe. The territories that constitute modern Austria were, for most of their history, constituent parts of the German nation and were linked to one another only insofar as they were all feudal possessions of one of the leading dynasties in Europe, the Habsburgs.

When the Habsburg Empire collapsed in 1918 at the end of World War I, its territories that were controlled by non-German ethnic groups accomplished their own independent nation-states. The German-speaking lands of the empire sought to become part of the new German republic, but European fears of an enlarged Germany forced them to form an independent Austrian state. The new nation's economic weakness and deficiency of national consciousness contributed to political instability and polarization throughout the 1920s and 1930s and facilitated the annexation of Austria by Nazi Germany in 1938.

This new Austrian cultural, political, and international identity laid the foundation for a stable democracy, a strong economy tied to the West, and neutrality between communist and democratic Europe. At the same time, it discouraged close examination of the role played individually and collectively by Austrians in Nazi aggression and war crimes. Revelations about the wartime record of Kurt Waldheim during the presidential election in 1985 thus initiated a painful reassessment of Austria's Nazi past. Moreover, the end of the Cold War has undercut Austria's self-appointed mission as a bridge between East and West. A redefinition of Austrian nationalism and its international role thus seems likely in the 1990s.