Why people confuse Austria with Australia

President Bush was not the first (and for sure not the last) to confuse Austria with Australia. It seems that it is not so easy to distinguish the seven letters of the word Austria from the similar combination of seven plus two letters within Australia.

I am not sure if this term exits, but I would call Austria a syntactical enclave of Australia.

An enclave a territorial unit (a country, e.g.) enclosed completely within a foreign territory, like the State of the Vatican City or the Republic of San Marino, both completely surrounded by Italy. Syntactics on the other hand deals with the formal relations between signs. The sequence of characters in the word Austria is completely lying within the "boundaries" of the word Australia.
In a way Austria can be considered as a kangaroo word of Australia: A word that carries other words within itself. Per definition the kangaroo word not only contains letters of the other word in the same order but the two words also have the same meaning and etymology. Well, this is definitely not true for Austria and Australia.

The name Australia is derived from the Latin auster (= south). Since ancient Roman times people were looking for the legendary "terra australis incognita" – the "unknown land of the south".

On the other hand we have Austria, which also sounds like a Latin word, but originates from the Old High German word Ostarrichi – the "eastern march", first mentioned in 996. (The High German ôstar means "eastern"). The name was Latinized in 1147 by King Conrad III, who used the term Austria for the first time.
By the way: The German name of Austria is Österreich, still including the etymological connection with the "eastern realm".

It is not only English speaking people who run the risk of confusing Austria with Australia. Here is a list of "vulnerable" languages:

Albanian: Austri - Australi
Bulgarian: Awstrija - Awstralija
Croatian: Austrija - Australija
English: Austria - Australia
Estonian: Austria - Austraalia
Hungarian: Ausztria - Ausztrália
Indonesian: Austria - Australia
Italian: Austria - Australia
Japanese: ōsutoria - ôsutoraria
Latvian: Austrija - Australija
Lithuanian: Austrija - Australija
Malay: Austria - Australia
Polish: Austria - Australia
Portuguese: Áustria - Austrália
Rhaeto-Romanic: Austria - Australia
Romanian: Austria - Australia
Russian: Awstrija - Awstralija
Serbian: Austrija - Australija
Slovenian: Avstrija - Avstralija
Spanish: Austria - Australia
Turkish: Avusturya - Avustralya
Ukrainian: Awstrija - Awstralija
Welsh: Awstria - Awstralia

On the other hand there is no "danger" for Arabs, Scandinavians, Slovaks or Czechs, as you can see in the following list:

Afrikaans: Oostenryk - Australië
Arabic: Nimsā - Ustrāliyā
Armenian: Awstria - Australia
Czech: Rakousko - Austrálie
Chinese: Àodìlì - Àodàlìyà
Danish: Østrig - Australien
Dutch: Oostenrijk - Australië
German: Österreich - Australien
Faroese: Eysturríki - Avstralia
Finnish: Itävalta - Australia
French: Autriche - Australie
Greek: Afst'ria - Avstralía
Icelandic: Austurríki - Ástralía
Irish: An Ostair - An Astráil
Maltese: Awstrija - Awstralja
Norwegian: Österrike - Australien
Slovak: Rakúsko - Austrália
Somali: Osteeriya - Awstraaliya
Swedish: Österrike - Australien
Vietnamese: Áo - Úc

(see also www.geonames.org/AU/other-names-for-australia.html and www.geonames.org/AT/other-names-for-austria.html)