In early 2000, the conservative People’s Party of Austria (ÖVP) entered into a coalition with the Freedom Party (FPÖ) to form a government. At that time, Austria was already one of then 15 EU members. The EU did not like the new government because the FPÖ was lead by a man named Jörg Haider (who did not become a member of the government). Wikipedia describes this (accurately) as follows:
In an attempt to pressure Schüssel’s democratically elected government into submission, the heads of the governments of the other 14 EU members decided to cease cooperation with the Austrian government, as it was felt in many countries that the cordon sanitaire against coalitions with parties considered as right-wing extremists, which had mostly held in Western Europe since 1945, had been breached. Because nothing in the legal framework of the European Union supported an official measure, informal (and officially non-existent) “sanctions” were imposed by mutual consent. For several months, other national leaders (most of all France’s president Jacques Chirac, Germany’s chancellor Gerhard Schröder, and leading Belgian politicians) ostracized the members of the Schüssel government, refusing basic social interaction and keeping unavoidable contacts to the legally required minimum. (However, the very same European Union politicians had not even considered such measures against Italy earlier in 1994, or afterwards in 2001, when the highly controversial Silvio Berlusconi established his governments with right-wing Alleanza Nazionale and the outspokenly anti-European Lega Nord.)
EU-law did not provide a way out of the impasse which followed because the “sanctions” imposed on Austria were not founded in the EU-Charter. The Austrian Chancellor would attend EU-conferences where he was not greeted by handshake and isolated during discussions.
Fortunately, Austria had a Chancellor one of whose major strengths was to stay cool under pressure. Not only did he react to all of this matter-of-factly but he even came up with a solution out of this diplomatic impasse: he suggested that the EU should send a Group of Wisemen to Austria to issue a report on the situation in Austria. In that report, the wisemen concluded that Austria was a democracy and that it had a state of law. This allowed the EU to withdraw sanctions against Austria which sanctions were not founded in the EU-Charter. Careful as the EU is, they stated that they would continue “to monitor the situation in Austria carefully”.
From then on, the new government had become a government which no longer had anything to lose, domestically or internationally. This encouraged the government to embark on implementing a series of important reforms (above all a pension reform) which triggered a brief “Golden Age” for the Austrian economy. The German Chancellor Gerhard Schröder had been one of the fiercest critics of the new Austrian government. A few years later when the German economy was in deep trouble for lack of reforms, he could read a coverstory in Der Spiegel which was titled “Are Austrians perhaps the better Germans?”