Though its regular own armed forces number less than 40,000 and treaty limitations hamper its defense industry, neutral Austria, with cooperation from Greece, is building a thriving arms export business in Mideastern and other third-world countries.
Sharpshooter's rifles, hunting weapons, and handguns made in Austria are now standard equipment with police and security forces from Miami, Fla. to Saudi Arabia and Argentina.
However, the centerpiece of Austria's unpublicized but thriving arms export trade is a series of jeep-like vehicles, armored cars, and tanks. Many of these are assembled at a plant in this northern Greek seaport. Trucks and tracked vehicles are shipped by sea directly from Thessaloniki to Mideastern and North African ports.
For Greece, a member of NATO though it has kept out of many of the alliance's military activities since Turkey's 1974 invasion of Cyprus, there is a large bonus in this quiet collaboration with neutral Austria: the Greek armed forces, which have relied mainly on US and French armor until now, are buying an undisclosed number of Austria's rugged, hill-climbing medium battle tank, the Kuerassier.
Observers who have witnessed trials of the Kuerassier, say it can climb a slope of nearly 75 degrees -- something none of the 50 US M-60-A3 main battle tanks which Chancellor Bruno Kreisky's government purchased form the United States last year can do.
Austria's biggest arms manufacturer, Steyr Daimler Puch, which operates its Greek subsidiary here as a joint venture, is known around the world for its bicycles, motorcycles, and heavy-duty trucks, as well as for its guns, tanks, and munitions. Its 17,500 employees devote about one-quarter of their production to military supplies.
Some of Austria's biggest third-world arms deals, both publicized and otherwise:
* Nearly 400,000 rifle cartridges to Syria in 1977. Israeli supporters raised an outcry in Vienna newspapers and the parliament, forcing resignation of the then Austrian Defense Minister, Karl Luetgendorf. (At about the same time, Chancellor Kreisky's government began discussions with Israel about possible purchase of Israel's home-produced Kfir jet fighter. It has made no decision yet.)
* 120 tank destroyers, the Panzerjaeger K (a variant of the Kuerassier tank) to Argentina in 1978. Bolivia purchased 18 Kuerassier. Tunisia bought 45, making the Austrian tank the backbone of that small North African country's armored force.
* Saudi Arabian Defense Minister Prince Sultan recently visited Vienna and placed an order for Austrian handguns for the Saudi armed forces worth nearly $ 70 million.
* Nigeria, black Africa's wealthiest oil state, is installing, with Steyr, a factory for assembly of Kuerassier tanks and other vehicles, ending its reliance on British armor.
Soviet pressure on Austria forced cancellation of a planned major arms export deal with China. The USSR was one of the signatories of the four-power 1955 Austrian State Treaty, guaranteeing the country's neutrality. The treaty specifically forbids joint export deals with West Germany of the sort now under way with Greece at the tank plant here.
Austria justifies its arms exports partly on the need to keep down unemployment at home, and partly to aid its balance of payments. In 1955, the year of the state treaty when the Soviet, United States, British and French occupation ended, its military expenditures were only $34 million. By 1979, these had jumped to $762 million in 1979, according to the Stockholm International Peace Research Institute (SIPRI).
Johann Ellinger, the press chief of Vienna's Defense Ministry, told the West German newsmagazine Der Spiegel: "When a small neutral says yes to building up its Army, it must automatically say yes to arms production. When it says yes to arms production, in the same breath it has to say yes to arms exports."
When news of a major tank sale to Chile broke in the Vienna newspapers in July, Chancellor Kreisky explained that the deal -- which like other Austrian arms sales required approval by the Interior and Foreign Affairs Ministers as well as the Defense Ministry -- was "exclusively for Chile's external defense, not for use in internal troubles."
Therefore, he pointed out, this was not a violation of Austria's neutrality. (After extended debate, however, the Austrian government decided Aug. 22 not to allow the Chilean deal to go through).
This official neutrality has given the country, ironically, an involvement in United Nations peacekeeping forces in the Middle East which has cost several casualties. A 330-man Austrian infantry battalion serves with United Nations forces in Cyprus (UNFICYP). A larger battalion of 530 men keeps watch with the UN observer force (UNDOF) along the Israel-Syria ceasefire line in Syria, including ski patrols on snow-capped Mount Hermon.