The Federal State of Austria (Austrian German: Bundesstaat Österreich ; colloquially known as the Ständestaat, "Corporate State") was a continuation of the First Austrian Republic between 1934 and 1938 when it was a one-party state led by the clerico-fascist Fatherland Front. The Ständestaat concept, derived from the notion of Stände ("estates" or "corporations"), was propaganda advocated by leading regime politicians such as Engelbert Dollfuss and Kurt Schuschnigg. The result was an authoritarian government based on a mix of conservative Catholic and Italian Fascist influences.
In the 1890s, the founding members of the conservative-clerical Christian Social Party (CS) like Karl von Vogelsang and the Vienna mayor Karl Lueger had already developed anti-liberal views, though primarily from an economic perspective considering the pauperization of the proletariat and the lower middle class. Strongly referring to the doctrine of Catholic social teaching, the CS agitated against the Austrian labour movement led by the Social Democratic Party of Austria. The CS also spread antisemitic prejudices, albeit never as virulent as the Nazis eventually became.
During the Great Depression in the First Austrian Republic of the early 1930s, the CS on the basis of the Quadragesimo anno encyclical issued by Pope Pius XI in 1931 pursued the idea of overcoming the ongoing class struggle by the implementation of a corporative form of government modelled on Italian fascism and Portugal's Estado Novo. The CS politician Engelbert Dollfuss, appointed Chancellor of Austria in 1932, on 4 March 1933 saw an opportunity in the resignation of Social Democrat Karl Renner as president of the Austrian Nationalrat, after irregularities occurred during a voting process. Dollfuss called the incident a "self-elimination" (Selbstausschaltung) of the parliament and had the following meeting on 15 March forcibly prorogued by the forces of the Vienna police department. His party fellow, President Wilhelm Miklas, with regard to Adolf Hitler's victory in the German elections of 5 March 1933 did not take any action to restore democracy.
Chancellor Dollfuss then governed by emergency decree, including the ban of the Communist Party on 26 May 1933, the Social Democratic Republikanischer Schutzbund paramilitary organization on 30 May and the Austrian branch of the Nazi Party on 19 June. Instead on 20 May 1933 he had established the Fatherland's Front as a unity party of "an autonomous, Christian, German, corporative Federal State of Austria". On 12 February 1934 the government's attempts to enforce the ban of the Schutzbund at the Hotel Schiff in Linz sparked the Austrian Civil War. The revolt was suppressed with support by the Bundesheer and right-wing Heimwehr troops under Ernst Rüdiger Starhemberg, ending with the ban of the Social Democratic Party and the trade unions. The path to dictatorship completed on 1 May 1934, when the Constitution was recast into a severely authoritarian document by a rump National Council.
Dollfuss continued to rule by emergency measures until his assassination during the Nazi July Putsch on 25 July 1934. Although the coup initially had the encouragement of Hitler, it was quickly suppressed and his education minister, Kurt Schuschnigg, succeeded him. Hitler officially denied any involvement in the coup d'état. Nevertheless, he continued to destabilize the Austrian government system by secretly supporting Nazi sympathizers like Arthur Seyss-Inquart and Edmund Glaise-Horstenau. In turn Austria under Schuschnigg sought the backing by its southern neighbour, the fascist Italian dictator Benito Mussolini. Tables turned after the Second Italo-Abyssinian War in 1935/36, when Mussolini, internationally isolated, approached Hitler. Though Schuschnigg tried to improve relations with Nazi Germany by amnestying several Austrian Nazis and accepting them in the Fatherland's Front, he had no chance to prevail against the "axis" of Berlin and Rome proclaimed by Mussolini on 1 November 1936.
According to the Hossbach Memorandum, Hitler in November 1937 declared his plans for an Austrian campaign in a meeting with Wehrmacht commanders. Under the mediation of the German ambassador Franz von Papen, Schuschnigg on 12 February 1938 traveled to Hitler's Berghof residence in Berchtesgaden, only to be confronted with an ultimatum to readmit the Nazi Party and to appoint Seyss-Inquart and Glaise-Horstenau ministers of the Austrian cabinet. Schuschnigg, impressed by the presence of OKW chief General Wilhelm Keitel, gave in and on 16 February Seyss-Inquart became head of the strategically important Austrian interior ministry.
After the British ambassador to Berlin, Nevile Henderson on 3 March 1938 had stated that the German claims to Austria were justified, Schuschnigg started a last attempt to retain Austrian autonomy by scheduling a nationwide referendum on 13 March. As part of his effort to ensure victory, he released the Social Democratic leaders from prison and gained their support in return for dismantling the one-party state and legalizing the socialist trade unions. Hitler reacted with the mobilization of Wehrmacht troops at the Austrian border and demanded the appointment of Seyss-Inquart as Austrian chancellor. On 11 March Austrian Nazis stormed the Federal Chancellery and forced Schuschnigg to resign. Seyss-Inquart was sworn in as his successor by Miklas and the next day Wehrmacht troops crossed the border meeting no resistance.
Hitler had originally intended to retain Austria as a puppet state headed by Seyss-Inquart. However, the enthusiastic support for Hitler led him to change his stance and support a full Anschluss between Austria and Nazi Germany. On 13 March Seyss-Inquart formally decreed the Anschluss, though President Miklas avoided signing the law by resigning immediately. Seyss-Inquart then took over most of Miklas' duties and signed the Anschluss bill into law. Two days later in his speech at the Vienna Heldenplatz, Hitler proclaimed the "accession of my homeland to the German Reich" (see Austria in the time of National Socialism).