Austria found itself as the center piece of World War I (WWI) when their Archduke was assassinated by a Serb nationalist in Sarajevo (in modern day Bosnia & Herzegovina). This war expanded across most of the continent and ended in Austrian defeat and the loss of their long standing royal family in addition to their union with Hungary.
At first, democratic rule in Austria was unstable and led to discontent and the eventual takeover of Austria by Germany in 1938, which some internal groups were pushing for and supporting of their native son, Adolf Hitler, who was himself Austrian. Other groups however, particularly in the Tirol region fought this and actually supported the Yugoslavs independence movement from Austria. Soon after this, World War II (WWII) began as both Germany and Austria were in economic shambles.
WWII became an "ethnic cleansing" in Austria as the Nazi party killed Jews simply for being Jewish. Well over 50,000 Austrian Jews were killed in the Holocaust during the war. This seems to have been the end of a long and inconsistent relation between the two groups, which historically went from working together to uprisings and massacres. At the end of the day, Austria again found itself on the losing side of the war, catapulting them to independence as a democratic country.
The new Austria declared itself neutral, they buried their past, and focused on economic growth and stability from the late 1940s until 1986 when a presidential candidate was accused of war crimes as a Nazi soldier. This led to the country digging up its past so it could move forward with its future and, a big part of this involved addressing the Holocaust.
Today, Austria is a modernized country and a leader within the European Union (EU) and the world. They work successfully with past enemies and their former occupied countries through communication and their continuing neutrality.