The entrance of Jörg Haider's populist FPÖ to the governing coalition at the beginning of 2000, triggered off the Europe-wide ostracism of Austria. These events shook the four pillars on which the Austrian national identity has rested since 1945, namely: the negative assessment of the 'Anschluss', neutrality, social partnership and ethnic homogeneity. When these identification points of reference started vanishing, it turned out that many of Austrian national myths are similarly ambiguous as, for instance, that one on 'small Austria' always harmed by its bullying neighbors. In this manner there was erased the memory of the eager participation of the Austrians in the Great German nation-state of the Third Reich, as well as of the division of their state between the Soviet Union and the Western Allies that lasted from 1945 to 1955. On top of that Austria's 1995 accession into the European Union has not become part of the Austrian popular mind yet. Is it not then a 'country without qualities'? A country where despite the official Anti-Fascism the FPÖ was allowed into the governing coalition just for the sake of perpetuating the hold on power, which the governing elites had enjoyed for the last 30 years? If so Haider's unprecedented entrance into the mainstream of Austria's politics speaks volumes on the weaknesses of Austrian democracy. Therefore it is high time to commence honest discussion on Austrian national myths so that to reconstruct the ideological foundations of this democracy. However, it is not only a problem of 'small Austria' but also of established democracies of Western Europe, where previously marginal populist parties with neo-Fascist, anti-immigration, xenophobic and ethnonationalist programs are increasingly allowed into the mainstream of politics.