German and Swiss cities also performed especially well in the quality of living rankings, with Zurich, Munich, Duesseldorf, Frankfurt, Geneva and Bern in the top 10.
The Austrian capital, with its ornate buildings, public parks and extensive bicycle network recently reduced the cost of its annual public transport ticket to 1 euro a day.
Serious crime is rare and the city of around 1.7 million inhabitants regularly tops global quality of life surveys.
But Mercer warned that top-ranking European cities could not take their position for granted in the survey, which assessed more than 200 cities.
“They are not immune to any decrease of living standards should this (economic) turmoil persist,” Mercer’s senior researcher Slagin Parakatil said on the company’s website.
Mercer, which also ranked cities according to personal safety, gave Athens a poor score because of clashes between demonstrators and police and political instability.
“In 2011 Athens is ranked in Europe among the lowest in the personal safety ranking,” Parakatil said.
Oslo also fell to 24th place in the separate safety survey because of Anders Breivik’s mass killings in July. It would usually be in the top 15, Mercer said.
Baghdad’s political turmoil, poor security enforcement and attacks on local people and foreigners made it the worst place to live in 2011, both in terms of life quality and safety, Mercer said.
Political and economic unrest in Africa and the Middle East also pushed down scores in those regions.
“Many countries such as Libya, Egypt, Tunisia and Yemen have seen their quality of living levels drop considerably,” Parakatil said.
“Political and economic reconstruction in these countries, combined with funding to serve basic human needs, will undoubtedly boost the region.”
He said that while the outlook is uncertain for most of the world because of economic and political turmoil, cities in Asia-Pacific look set to benefit thanks to political stability and solid growth.
Auckland, Sydney, Wellington, Melbourne and Perth made it into the top 20 for quality of life in 2011 while Singapore was the highest-ranking Asian city in 25th place.
