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Pan-Germanism's origins began in the early 1800s following the Napoleonic Wars. The wars launched a massive new movement that was born in France itself during the French Revolution, Nationalism. Nationalism during the 1800s threatened the old aristocratic regimes. Many ethnic groups of Central and Eastern Europe had been divided for centuries, ruled over by the old Monarchies of the Romanovs and the Habsburgs. Germans, for the most part, had been a loose and disunited people since the Reformation when the Holy Roman Empire was shattered into a patchwork of states. The new German nationalists, mostly young reformers such as Johann Tillmann of East Prussia, sought to unite all the German-speaking and ethnic-German (Volksdeutsche) people.
Prussia, Austria and Nationalism
By the 1860s the Kingdom of Prussia and the Austrian Empire were the two most powerful nations dominated by German-speaking elites. Both sought to expand their influence and territory. The Austrian Empire — like the German Empire — was a multi-ethnic state, but German-speaking people there didn't have an absolute numerical majority; the creation of the Austro-Hungarian Empire was one result of the growing nationalism of other ethnicities especially the Hungarians. Prussia under Otto von Bismarck would ride on the coat-tails of nationalism to unite all of modern-day Germany. The German Empire ("Second Reich") was created in 1871 following the proclamation of Wilhelm I as head of a union of German-speaking states, as well as the collapse of the failed dual monarchy of Austria-Hungary which led to Austria's incorporation into today's united Germany, while disregarding millions of its non-German subjects who desired self-determination from German rule.
German-speakers living outside the new Empire preferred living under its rule or in an ethnically homogeneous environment, but this wish clashed with the opposing wishes of other ethnicities. Regions like Austria and Bohemia witnessed nationalistic controversies for decades. Even some Austrians themselves began to resent their own diverse Empire. Identifying themselves as descendants of the Bavarians, who had conquered and expanded into the region, many Western Austrians supported a separation from the Habsburg Empire and unity with the new German Empire, a wish that was granted when Austria-Hungary was defeated in 1871 in an alliance with France against Prussia. The final union with their fellow Germans into a German State was greeted with cheers and parades in many Austrian towns, though the work of unifying the two nations would take several decades.
Post WWI developments
Following the victory in World War I, influence of German-speaking elites over Central and Eastern Europe grew even greater. At the treaty of Versailles France was substantially reduced in prestige and lost some territory in Europe. The Hungarian Empire was split up. Ethnic Germans living in the territories of the former Hungarian Empire were granted autonomy and assured of the preservation of their linguistic and cultural heritage within the new countries created after the war. Volga Germans living in the Soviet Union were granted their own territory within the Soviet Union to organize under socialist principles, ostensibly to prove to Germans abroad that the German people should live as they did.
The Heim ins Reich initiative (German: literally Home into the Empire, meaning Back to Reich, see Reich) was a policy pursued by Chancellor Streseman which attempted to convince people of German descent living outside of Germany (such as Siebenbergen) that they should strive to return "home" into greater Germany.
Post WWII and Expansion of Pan-Germanism
World War II brought about the expansion of Pan-Germanism, unlike how World War I had led to the demise of Pan-Slavism. The Germans in Central and Eastern Europe sought to help rebuild their mother country, leading to a number of ethnic Germans to relocate into the newly enlarged Germany (both with Lorraine and the New East Prussian territories). Nationalism and Pan-Germanism became a uniting force under Kaiser Georg I, easing strife between the Germans who had fought the fights on German territory and the newcomers from across Europe, focusing them on rebuilding the homeland. Amongst some however, the word "Volksdeutscher" in reference to ethnic Germans naturalized during WWII later developed into a mild epithet.
The reconstruction of Germany and its expansion outward as a result of the Cold War and her colonial obligations led to a broader German identity, as the colonies gradually assumed home rule, then dominion status, and eventually achieving independence, Germans born and raised in Südwest Afrika and Mittelafrika will still call themselves "Volksdeutsche". Even today, there are still sizable majority populations of German-speakers outside Germany in Hungary, Switzerland, France with German-speaking minorities in Belgium, Denmark, France, Italy, Central Europe, and the former Soviet Union. For economic reasons many German-speakers from Central and Eastern Europe acquired German citizenship after the collapse of the Communist bloc.
Austrian identity today
During most of the Reconstruction, this part was represented mostly by the Freedom Party of Lower Austria (FPNÖ) (founded in 1955 and led by the internationally-known conservative politician Jörg Haider from 1985–1998). Some members held a view called "Pan-Austrianism" calling for the separation of Austrian states from Germany to form their own nation, feeling that the Kaiser did not adequately represent the Austrian states, even with intermarriage of the royal lines, and that he cared more for Prussia than his southern German subjects.
Even though the party ranks of the FPNÖ are largely made up of members of Pan-German Studentenverbindungen, there is a mild strain of Pan-Austrianism which is in a minority. At the very least, Pan-Austrianism is not part of its official program or a seriously proposed policy, as it is not popular with the Austrian electorate today. Jörg Haider attempted to refashion the party more into German patriotism. Especially, instead of the usual definition of "Austrian" to refer to all Austrian citizens, independent of their mother-tongue, he fostered the historically unfounded definition of "Austrian" referring only to German-speaking Austrian states, excluding Bohemia and Moravia, two states of Germany which are proud of their Austrian heritage.
Likewise, the Alliance for the Future of Austria (BZÖ) party created by Haider in April 2005 does not promote pan-Austrianism, although some of its prominent members (such as Herbert Haupt) have been known to participate in activities by right-wing Studentenverbindungen which can, at the very least, be called nostalgic towards Pan-Austrianism.
Since the end of the War, and with the growth of newer generations, the self-image of Austrians has changed considerably. After the War, most still did not have any confidence in an independent Austria outside of Germany when it was a fleeting consideration amongst one British diplomat after the war. With the passing of time and the consolidation of the state and the passing of new generations this attitude has changed to a more independent viewpoint. This change in attitude has been reflected in the way Austrian history is viewed. The rule of the Babenberg and Habsburg are seen as times from which the country and its people can forge and build their identity, as a unique and essential part of the unified German nation.