Friedrich Hebbel, the great Austrian dramatist of the 19th century, described his country as "the small world in which the great world holds rehearsal." If that's the case, we're in trouble.

A year ago, the far-right Freedom Party, led by Jorg Haider, shocked Europe when it joined the Austrian government as an equal coalition partner. A Porsche-driving pseudo-populist firebrand, Haider built his party into a major political force by scapegoating immigrants and trawling the sewers of ethnic prejudice for votes. Shocking levels of anti-Semitism persist today in Austria, where, according to a survey published by the newsweekly Gor, 50 percent of the population believe that Jews were responsible for their own persecution, and 37 percent say they are "not sure" they could shake hands with a Jew. Catering shamelessly to this constituency, the Freedom Party emerged as the top vote-getter among the Austrian working class and people under 30, in what proved to be the strongest showing of a right-wing extremist movement in Western Europe since World War II.

But the Haider juggernaut encountered significant resistance as soon as the

"I declare hunting season on thsose who are hunting us," says Jorg Haider. GERT EGGENBEGERZU/AFP

conservative People's Party of Austria broke its pre-election promise and formed a controversial alliance with the Freedom Party. The European Union immediately imposed diplomatic sanctions. And more than 100,000 demonstrators gathered in Vienna on February 20, 2000 to protest the new regime.

Yet all this just gave Haider more fuel. Resigning as head of the Freedom Party, he passed the baton to Susanne Riess-Passer, Austria's vice-chancellor, otherwise known as "the king's cobra." Haider remained the party's behind-the-scenes boss, while ruling as governor in the southern province of Carinthia. Taking aim at his critics, he declared that any political figure who supported E.U. sanctions against Austria should be prosecuted for "political treason," and he launched more than 100 libel suits against journalists, artists and academics as part of a far-ranging effort to intimidate and muzzle dissenting voices. Gerhard Botz, a leading Austrian historian of the Nazi era, accused Haider of endangering freedom of speech by attempting to "criminalize" his critics.

Haider's defamation suits often ended up with judges who were viewed as friendly to the Freedom Party. For legal representation in these cases, Haider turned to the former law firm of his Freedom Party confidant, Dieter Boehmdorfer, the current justice minister who formerly served as Haider's personal attorney.

Boehmdorfer's performance as Austria's attorney general has been so odious that he alone among cabinet officials was singled out for condemnation in a report by three "wise men" from the European Union who were asked to assess the impact of the diplomatic boycott against Austria. But the trio of experts concluded that such measures had become counterproductive by encouraging just the kind of xenophobic and reactionary sentiment they were designed to punish. Based on their recommendation, the sanctions were lifted in September.

Haider gloated at the European Union's tactical blunder, while Boehmdorfer issued veiled threats against Freedom Party detractors. "Even the freedom of the press has its limits," the justice minister declared.

Vowing to stop "biased" reporting, Haider's minions in the government set up a regulatory body to monitor the "objectivity" of the country's national broadcast media. Austrian state television and radio were deluged with complaints from Freedom Party stalwarts. "There has always been a degree of interference, but of late it has reached an unprecedented dimension," Daniella Spera, Austrian TV's main news anchor, disclosed in October. "Top politicians are calling so regularly it is nearly impossible to work."

Numerous print media professionals also complained of personal attempts at intimidation by government officials. In November, the Austrian journalists' association warned that press freedom was at risk after the Freedom Party launched a vicious verbal attack against the Austrian Press Agency over a dispatch that ruffled Haider's feathers. "You can't blame the reporter when the facts do not please you," responded Astrid Zimmerman, head of the Austrian journalists' trade union.

The art and culture scene was also subjected to an array of repressive policies, including the termination of state subsidies for numerous cultural workers and progressive social programs. The Independent Women's Forum in Vienna, for example, saw 80 percent of its budget dry up overnight. Many of the victims of the funding cuts--from community radio stations to independent theater groups--had one thing in common: their opposition to the government.

"Austria doesn't have a very big tradition of dissenting, democratic structures, and I'm very concerned about the consequences," says Konrad Becker, head of Public Netbase, a community Internet service that provides online facilities for more than 1,200 cultural and political projects. Netbase had its funding slashed last April.

Hubsi Kramar, a stand-up comedian, also has been targeted for retribution by the Freedom Party. Kramar dressed in Nazi regalia as part of an anti-Haider parody; he was subsequently arrested and charged with violating the law against displaying fascist symbols. Yet no one gets arrested at annual meetings of Waffen-SS veterans in Austria, where Nazi medallions are worn in earnest.

Haider has spoken at such events on several occasions, always to an appreciative audience. German television clips have showed him praising the "decency" of the notoriously brutal Waffen-SS. Although he caught a lot of flack for this, Haider did not recant. Late last year, he caused another stir when he addressed a mountaintop reunion of SS members and other Hitler soldiers. Haider described the Third Reich veterans as "good citizens who had sacrificed their youth."

The Freedom Party's aggressive cultural strategy is the brainchild of Andreas Molzer, Haider's adviser on cultural affairs. Until recently, this Rasputin-like figure was the publisher of Zur Zeit, a virulently racist Vienna newsweekly, which rages about "the dogma of the 6 million murdered Jews" and celebrates the "epoch-making economic and political successes of the great social revolutionary," a reference to Adolf Hitler.

Emboldened by the fact that few Austrian politicians would condemn openly racist, xenophobic and anti-Semitic material in the media, Haider went for the jugular. He called for a ban on all anti-government demonstrations and backed new laws to allow increased police surveillance and eavesdropping on private citizens.

But it appears that Haider, in his zeal to strangle dissent, may have gotten carried away. In October, several top Freedom Party officials, including Haider and Boehmdorfer, were accused of paying police for confidential files on their political rivals and critics. The bribery charges were triggered by the publication of a devastating book by Josef Kleindienst, a disillusioned Haider acolyte and former head of a police union affiliated with the Freedom Party. Titled I Confess, the book detailed how sympathetic police officers were bribed to provide information about Haider's foes. "Of course, it was clear we were breaking the law," Kleindienst acknowledged, "but it was more important to help the party fight its enemies."

More than 80 police officers were implicated in what became known as "the spy affair." Eleven police working with a senior intelligence unit were suspended from active duty pending the outcome of an inquiry by state prosecutors. Boehmdorfer quickly proclaimed that Haider was "above suspicion," a comment that raised concerns of political meddling in the judiciary; this February, Haider's lawyer announced that investigations into his role in the police spying scandal had been dropped.

But several officials remain under scrutiny, including Hilmar Kabas, the erstwhile leader of the Freedom Party's Vienna branch. Kabas reportedly ran an extensive spy network that purloined data from police computers on a regular basis. He resigned his party post in January amid disclosures that he spent an evening in a Vienna brothel (courtesy of the Austrian taxpayers).

All this was not good news for a political party that had campaigned loudly against government corruption and "criminal foreigners." Nor did the government's harsh spending cuts and ambitious privatization program go over well after the Freedom Party had promised to fight for the "little man." Recent setbacks in two regional elections confirmed that the party is suffering a popularity slump. But the charismatic Haider has a long record of rebounding from adversity.

Tens of thousands of protesters gathered once again in Vienna last month--just as they have been doing on a weekly basis throughout the Freedom Party's turbulent first year in power. "The fundamental concerns have not changed," says Max Koch, head of SOS Mitmensch, one of the groups coordinating the demonstrations. "Attitudes toward foreigners, Thatcherite changes in social spending and the work force, regressive policies regarding women, the year has not been a good one for Austria." True to form, Haider lashed out at the opposition. "You have to understand, our enemies have declared war on us," he told a recent gathering of Freedom Party faithful. "I declare hunting season on those who are hunting us."

Martin A. Lee is the author of Acid Dreams and The Beast Reawakens, a book about neofascism.