LONDON – Finally, the Swiss banks are off the hook on the Holocaust. Their offerof a $b1.25 settlement with Holocaust survivors and their heirs has been accepted by an American court. Yet, as the judge observed, the banks fought all the way. At the outset the banks said there were only 8,000 accounts with links to Holocaust victims. The truer figure turned out to be over 50,000.

Fifty-five years after the liberation of the concentration camps Germany still stands out head and shoulders above the other countries that collaborated with Hitler as the one that made the earliest and swiftest attempt at restitution. And 55 years later it is still Austria, Hitler’s birthplace, that has done the least to square the past. It still half believes- or at least it gives the appearance that half the country believes- that Austria was Hitler’s victim rather than his willing ally.

One case now on its way to the courts for lack of political progress graphically points up all that is wrong with Austria’s attitude to the past – the refusal of the government to restore Austria’s second largest private bank to its rightful owner. In March 1938 the National Socialists stormed into the house of banker Alphonse Thorsch, threw him out, and confiscated his house and bank and all his precious paintings, furniture, jewels and carpets.

Since then the family has fought through three generations to regain what was stolen. As cabinet papers have revealed, earlier post war governments decided in favour of “dragging this matter out”.

Now that the Freedom Party, led by the Jorg Haider, has entered government the political way seems blocked once again. Not only has Haider exhibited pronounced political sympathy towards the Nazi past he also has a personal stake in fighting restitution, as much of his own wealth is derived from the compulsory knock-down sale of Jewish property to his parents.

What is clear from a new book, “Guilty Victim”, written by Hella Pick, the former distinguished diplomatic editor of the London “Guardian”, is that this prevarication is still deeply embedded in the Austrian soul. She argues persuasively that one of the central themes running through Austrian history is the “big lie”, the ” National Luge”, “the self-deception that has prompted so many Austrians to assert that the country could not be held responsible for the Nazi persecution of Austrian Jews because Austria itself became Hitler’s first victim.”

Only as late as 1991 was this discarded as official doctrine. Still today it lives on, if no longer a sacred text, as a practice.

Since Haider’s rise to power earlier this year the European Union has decided to crack the whip. Austria is now formally a semi-outcast from the central deliberations of the European Union. Yet this begs the question why didn’t the European heavyweights act earlier? Both Britain and France were co-conspirators with the U.S. and the Soviet Union in signing the 1943 Moscow Declaration which incorporated the idea that Austria had been Hitler’s “first victim”.

Indeed, they repeated the decision to incorporate the victim-hood concept in the writing of Austria’s State Treaty in 1955, when the allies finally withdrew from Austria. In fact they went even further, yielding to Austria’s last minute demand to scrap the Moscow’s Declaration injunction that Austria had to be held responsible for its part in the Second World War alongside Germany.

If it hadn’t been for the furor kicked up by the Kurt Waldheim affair in which the former Secretary-General of the United Nations, in the course of his successful campaign for the Austrian presidency, was exposed as having participated in what was probably a war-crime, Austria would perhaps have never begun its slow journey to confront its past.

It was Chancellor Franz Vranitzsky who realised that the Waldheim crisis should be used to prize open the collective amnesia of Austria’s part in the Nazi era. In 1991 he made his path-breaking statement to parliament in which for the first time Austria’s guilt was publicly acknowledged, admitting that many Austrians had supported Hitler and been instrumental in Nazi crimes. It was tantamount to changing the official doctrine of Austria as a victim state.

Nine years later where is Austria? Two years ago Austria began to return the artwork looted by the Nazis. This autumn a Holocaust memorial will be unveiled in Vienna. There is the on-going, government-financed, International Commission of Experts charged with producing a definitive, closely documented, account of Nazi crimes in Austria. Simon Wiesenthal, the world famous Nazi hunter, once reviled at home, has been heaped with honours. Even the conservative hierarchy of the Catholic Church, which stood aloof for so long, has now urged believers to come to terms with their recent history.

Yet Haider startling electoral success, gaining 27% of the vote in the 1999 federal election, reminds us that all is still not well in Austria and there is still too much of an undercurrent of dragging things out, as the Thorsch bank issue reminds us. Moreover, much of the looted art has still not been returned to its rightful owners. Nazi slave labourers have still not been compensated and one could go on…The pressure from the European Union has to continue. It is too early to talk of lifting diplomatic sanctions. Pressure and outside scrutiny is the only thing that has ever produced results in Austria and, wish it as one may, it is too early to call a halt.

I can be reached by phone +44 385 351172 and e-mail: JonatPower@aol.com