Austria-Hungary's best course of action regarding Bosnia-Herzegovina?

When it comes to the Bosnian crisis in 1908, I have seen 2 different perspectives on the annexation:

1) It was a bad move that worsened A-H's relationship with everyone else.
2) It was a necessary move to secure A-H's Adriatic coast and avoid a Greater Serbia.

So with that in mind, what could A-H have done with B-H to have the best possible outcome for the empire? Maintaining the status quo, which let A-H station troops in B-H while making the territory de jure Ottoman, doesn't seem to be a good solution though.
 
When it comes to the Bosnian crisis in 1908, I have seen 2 different perspectives on the annexation:

1) It was a bad move that worsened A-H's relationship with everyone else.
2) It was a necessary move to secure A-H's Adriatic coast and avoid a Greater Serbia.

So with that in mind, what could A-H have done with B-H to have the best possible outcome for the empire? Maintaining the status quo, which let A-H station troops in B-H while making the territory de jure Ottoman, doesn't seem to be a good solution though.

Returning the territory to Constantinople as part of forming a broader, reliable Russian containment front alongside Germany (Italy can't be trusted as far as she can be thrown) and containing Balkan nationalism was a viable option. Work with the Turks to construct a model of semi-autonomy that's acceptable to the international community and use it as a template/trial balloon for similar restructuring of the Hapsburg empire
 
A-H should have annexed the south-western part as a hinterland to the narrow Dalmatian coastlands (and to prevent total political meltdown in Croatia). The rest of Bosnia-Herzegovina should not have been annexed under any circumstances. A-H should have given it (back) to the Ottoman Empire; then abandoned all imperial schemes and meddling in the Balkans and focused on internal issues.
 
Returning the territory to Constantinople as part of forming a broader, reliable Russian containment front alongside Germany (Italy can't be trusted as far as she can be thrown) and containing Balkan nationalism was a viable option. Work with the Turks to construct a model of semi-autonomy that's acceptable to the international community and use it as a template/trial balloon for similar restructuring of the Hapsburg empire

A-H should have annexed the south-western part as a hinterland to the narrow Dalmatian coastlands (and to prevent total political meltdown in Croatia). The rest of Bosnia-Herzegovina should not have been annexed under any circumstances. A-H should have given it (back) to the Ottoman Empire; then abandoned all imperial schemes and meddling in the Balkans and focused on internal issues.

However, was there someone important in the A-H's government that actually believed they should give B-H back to the Ottoman Empire? And with such development, would the Ottoman Empire join the Central Powers while Italy leaned toward France and Russia sooner? I think that would butterfly away the Italo-Turkish War and the Balkan Wars. Bulgaria also wouldn't be able to declare itself a kingdom and grudgingly relied more on Russia.
 
Austria should just maintain the pre 1908 status quo. This leaves Novi Pazar under Austrian occupation which is probably a help vs OTL for the Ottomans as its hard to defend.

If the Balkan wars happen and end with the same result, then you can annex if politics forces Austria to do that or better do the Halagaz smart long term strategy above. Austria's 1878 borders were Congress of Vienna, (except for Italy of course), no Great power is going to dispute those in the east. Pushing beyond those is power politics beyond Austria's league.

Question though, were the B+H areas really hostile to Austrian occupation, seems the Muslim people might prefer Austrian to Serbian governorship, as well as Croatian part?
 
For the Austrians I would think establishing an independent Grand Duchy of Bosnia-Herzegovina would be the smart route.

They're not technically annexing the place, but it remains firmly in the Austrian orbit.
 
However, was there someone important in the A-H's government that actually believed they should give B-H back to the Ottoman Empire? And with such development, would the Ottoman Empire join the Central Powers while Italy leaned toward France and Russia sooner? I think that would butterfly away the Italo-Turkish War and the Balkan Wars. Bulgaria also wouldn't be able to declare itself a kingdom and grudgingly relied more on Russia.

I'm not certain on the first part, but the second would certainly be the case if the new Kaiserbund starts developing into an alliance directed against Russia and Russian meddling in southern and eastern Europe. That has the added advantage of decreasing British interest in the rise of the continental alliance blocs, to the point where she'll be less likely to tie herself to the French-Russian Entente, with her main concern being preventing one group from overshadowing the other by playing her traditional diplomatic broker and "balancing" role. This assumes Vienna manages to convince the Germans to tone down competition with the U.K and a recognition on the part of both powers that the naval-colonial race is over, which is likely under a wide variety of butterflies.
 
Returning the territory to Constantinople as part of forming a broader, reliable Russian containment front alongside Germany (Italy can't be trusted as far as she can be thrown) and containing Balkan nationalism was a viable option. Work with the Turks to construct a model of semi-autonomy that's acceptable to the international community and use it as a template/trial balloon for similar restructuring of the Hapsburg empire
I like that idea because it would preserve some stability but its weakness would seem to be that it opens the potential for yet more instability as well. In order for the Ottoman empire to retain control in the territory, it must also retain control of other significant Balkan territories between Bosnia and Constantinople. Doing so will earn the ire not just of Serbia and Russia but of Greece and Bulgaria as well since both want Turkish land inhabited by a majority population of their countrymen. And that is on top of Romania, which already had an eyes for Transylvania thus rounding out the Balkans against them. As such, Turkey must be strong enough to maintain this hold or else the Habsburgs must intervene and face a potentially major war against a Russian-backed balkan league consisting of countries whose subject peoples make up much of the empire's population, all on behalf of a country that is considered to be a moribund (not to mention oriental and muslim) empire. This would not be popular.
 
For the Austrians I would think establishing an independent Grand Duchy of Bosnia-Herzegovina would be the smart route.

They're not technically annexing the place, but it remains firmly in the Austrian orbit.

Weren't the Austrians afraid that B-H would fall within Serbian hand if they stayed independent? Or you meant that A-H just gave them a name for political sake and still stationed troops there?
 
Austria should have gone ahead with the annexation but:

Given the Ottomans the compensation they paid anyway and

Supported Russian efforts at the Straits.

This would have spared them the crises and hopefully driven a wedge between the Russians and Britain
 
I think the best outcome for Austria would hav been if it managed to make Serbia declare war on them. OTL Serbia was threatening Austria with war during the crisis. If Serbia attacks AUstria (this is still small Serbia) Austria can deal with them.Even if WWI breaks out of it the power balance is better for the CP than in 1914.
 
The damage done to the Austro-Russian relations was not worth the formal annexation and the destruction of the joint policy of keeping the Balkans "on ice" regarding border changes.
The Austrian move was bit like the Russian annexation of Crimea - they had openly expressed their desire to alter the status quo, but a sudden crisis outside of their control made the ruling elite feel like they had to act now.
Combined with personal shehanigans of the diplomats involved only added the insult to injury for Russia, and more or less pushed Russia towards her disastrous new Balkan policy.
 
Question though, were the B+H areas really hostile to Austrian occupation, seems the Muslim people might prefer Austrian to Serbian governorship, as well as Croatian part?

The Muslims were in two minds. Many of them were hostile to Austria, though they certainly didn't like the idea of Serbian rule. A lot of them left their homes in protest over the occupation. Multiple rebellions - Serb and Muslim rebellions - had to be crushed before Bosnia came to (grudgingly) tolerate Austrian rule. And a minority of Muslims was even willing to partner up with Serbia.

And if Muslims were 'in two minds' about Austrian rule, Serbs - at the time, the largest ethnic group in Bosnia-Herzegovina - were extremely opposed to it. In general, B+H was a pretty hostile environment for Austria. They managed to keep the region on ice, for some time, but the ambiguity of the pre-1908 status quo was a big part of that.
 
However, was there someone important in the A-H's government that actually believed they should give B-H back to the Ottoman Empire? And with such development, would the Ottoman Empire join the Central Powers while Italy leaned toward France and Russia sooner? I think that would butterfly away the Italo-Turkish War and the Balkan Wars. Bulgaria also wouldn't be able to declare itself a kingdom and grudgingly relied more on Russia.

I don't think there was.

As for Italy, this would actually make it (marginally) less hostile to Austria than it was in OTL, because of the issue of compensation wouldn't be relevant (or, at least, wouldn't be as strongly pronounced). Bulgaria, on the other hand, would be markedly more pro-Russian.
 
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