AHQ: (Trying to) resolve Austria’s Problems

[VadisDeProfundis]

After the settlement of the Schleswig Holstein Question, in the Austro Prussian War, the Austrian Empire, having suffered two major military defeats in less than a decade, had to reform itself. Hungarian nobles were pushing though the idea of an “Ausgleich”, which is what actually happened. Some would say that it happened because of the Empress’s hungarophilia, others might say that it was a genuinely good choice. In any case, my question is this: after the Austro Prussian War, what were the options for Austria? What would be a better way to pacify the Empire?

 

[FillyofDelphi]

After the settlement of the Schleswig Holstein Question, in the Austro Prussian War, the Austrian Empire, having suffered two major military defeats in less than a decade, had to reform itself. Hungarian nobles were pushing though the idea of an “Ausgleich”, which is what actually happened. Some would say that it happened because of the Empress’s hungarophilia, others might say that it was a genuinely good choice. In any case, my question is this: after the Austro Prussian War, what were the options for Austria? What would be a better way to pacify the Empire?

While some people say the answer would be a more forceful pursuit of the Vienna Autocracy that Franz Joseph pushed between 48' and 66',the fact was the Imperial government was bleeding red ink and couldn't secure further international loans to pay routine expenses and invest in much-needed material reforms without loosening control in a way that placated her creditors' fears of potentially violent revolt and offloaded the expenses (and thus control) of many areas to the localities, especially after losing the lucrative net taxpaying province of Venetia. Fundimentally, that meant that she had three options: What she actually did, Federalism which would have involved siding with the liberal intelligencia and financial class over the regional nobility by restoring something like the April Laws: a hard sell given these were the folks who'd brought about 48', or going back even further and distributing power back to the old Diets of the Estates, which would placate the provinces but hamstring economic development.