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Yes, Austria is a member of the Schengen Area.

The full list of the 26 current (as of 2012) members of the Schengen area is:

Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and Switzerland.

Bulgaria and Romania are due to join Schengen in 2013.

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