The loss of supremacy in Germany forced the Habsburg monarchy to come to an understanding with the Magyars. F. F. Graf Beust, Foreign Minister since October 1866 and soon afterwards also Prime Minister, brought about the settlement with Hungary, which was decided on February 8, 1867 in Vienna (Treaty of June 12). Restored on February 27th, respectively, and on June 8th, Franz Joseph and Elisabeth were crowned King and Queen of Hungary. The result was the dual monarchy, a real union of the two independent states Austria and Hungary (Austria-Hungary); Croatia (Croatian-Hungarian compensation, 1868) and Transylvania fell back to Hungary. Transleithanien (Hungary with its neighboring countries) and Zisleithanien (the German-Slavic crown lands) received a constitution that sought to mediate between centralism and federalism (December constitution, December 21, 1867). Both states were organized as constitutional monarchies under the common head of state, three common ministries were responsible for foreign policy, military affairs and finances.
According to dentistrymyth, Transleithanien developed independently, Zisleithanien became more and more involved in the struggle of nationalities. Initially, the Austrian Germans – numerically, economically and culturally leading – still claimed political leadership. The German-Liberal constitutional party gained a majority in both houses of the Reichsrat; The citizens’ ministry relied on it from 1867 to 1870 and achieved the repeal of the Concordat of 1855, the introduction of liberal school and marriage laws, the improvement of the financial situation and the introduction of general conscription. The Czechs opposed this German-centralistic system, who in August 1868 presented declarations to the Bohemian and Moravian state parliaments calling for statehood for the countries of the Bohemian crown.
Foreign policy tried to keep the southern German states independent; despite attempts by France to form alliances, Austria remained neutral in the Franco-Prussian War of 1870/71. – In the interior, Emperor Franz Joseph tried in vain to find a compromise with the Czechs and Poles after the dismissal of the mayor’s ministry (1870). The cabinet under Prime Minister K. S. Graf Hohenwart failed with its federalist program due to resistance from both the German liberals and the Hungarians. The Czechs opposed the following ministry under A. Fürst Auersperg, who invoked Bohemian constitutional law with their 18 fundamental articles (1871).
The three emperor relationship (1872/73) initiated by Foreign Minister G. Graf Andrássy, who was drawing closer and closer to the German Reich, was soon shaken by the Russian-Austrian conflict on the Balkans.
Here Austria, which after being ousted from Germany and Italy turned to the Balkan countries, encountered Russian Pan-Slavism (“South Slavic question”). At the Berlin Congress (1878) Austria obtained approval for the occupation of the Turkish provinces of Bosnia and Herzegovina, and after an agreement with the Porte (1879) also of the Sanjak Novi Pazar, in which only a few garrisons were established.
Interior Minister E. Graf Taaffe achieved the return of the Czechs to the Reichsrat. Taaffe, since 1879 also Prime Minister, accommodated the non-German-speaking groups: he issued ordinances on the bilingualism of the authorities for Bohemia and Moravia (1880), for the Slovene regions (1882) and for Austrian Silesia (1882); a Czech university was established in Prague in 1882. The national movements became more and more radical: in Bohemia the young Czechs moved ahead of the conservative old Czechs, and the German national movement opposed the traditional liberalism of the Germans in the 1880s. After several changes, the old German constitutional party was absorbed into the United German Left in 1888 and formed the strongest parliamentary group in the Reichsrat in 1891, but the agreement was short-lived. Taaffe was forced to resign in October 1893; he had not succeeded in easing the tension; only economic policy was successful: railways were nationalized, high protective tariffs promoted industry and agriculture, the state budget was stable; Social policy legislation was implemented (Sunday rest, maximum working hours, accident and health insurance).
Around 1880, after the electoral census was relaxed, new parties began to form. The conservatives were replaced by the Christian Social Party (CP), which was based on the petty bourgeoisie and later on the peasants, under the leadership of K. Lueger. The Social Democrats, which V. Adler unified at the party congress in Hainfeld (December 30, 1888– January 1, 1889), organized the workforce; In 1911 they split up into a German and a Czech party. The liberals fanned out into radicals (Pan-Germans under G. von Schönerer and Karl Hermann Wolf [* 1862, † 1941]) and moderates, whereby the situation in the Sudetenland was decisive. In the Reichsrat elected for the first time in 1907 according to the general, equal and direct suffrage (of men), the Christian Socials had 98, the Social Democrats 87 and the German Nationals 79 members.
Austria-Hungary’s foreign policy had received a new basis through the conclusion of the dual alliance with the German Empire in 1879. The alliance policy thus initiated was continued; In 1881 the three emperors’ union from 1872 was renewed, but it broke up during the Russian-Bulgarian crisis (1887/88). The double alliance was followed in 1882 by the triple alliance with the German Empire and Italy, an alliance that was dubious from the start due to Italian irredentism, which aimed to unite Trentino, the county of Gorizia, Trieste, Istria, Fiumes and Dalmatia with Italy. The two and three alliances were supplemented by special treaties between the German Empire and Austria-Hungary with Romania (1883) and the Mediterranean Agreement between Great Britain, Italy and Austria-Hungary (1887). K. Graf Badeni (1895–97) to the Czechs (language regulations, repealed in 1899) intensified the nationality dispute, which now dominated all areas of life and threatened the entire state. In 1902, the settlement with Hungary was only renewed through a provisional agreement on the continued existence of the common economic area (adopted by the Austrian House of Representatives in 1903 despite Czech obstruction). The Hungarian Reichstag, however, not only delayed the final conclusion of the settlement, but also prevented, since the Kaiser had rejected the demand for the abolition of the German command language in the Hungarian regiments, the approval of the defense bill; this fight lasted until 1912.
The Austro-Russian antagonism was temporarily alleviated (visit by Emperor Franz Joseph to Saint Petersburg in 1897). But after the defeat by Japan in 1904/05, Russia turned back to a Pan-Slavic Balkan policy. Under the Karađorđević dynasty, which came to the throne in 1903, Serbia gave up its alliance with Austria and, supported by Russian diplomacy, worked towards the separation of the South Slavic territories from the Habsburg monarchy. The annexation of Bosnia and Herzegovina (1908) by Austria exacerbated the opposition to Serbia and triggered a European crisis. In view of the increasing dangers, F. Conrad von Hötzendorf propagated, since 1906 Chief of Staff, launched a preventive war against Serbia and Italy, but the emperor and heir to the throne stuck to the peace policy. In the Balkan Wars (1912/13) v. a. the emphatic warnings of the German government of the Austrian intervention, which Conrad von Hötzendorf and the foreign minister L. Graf Berchtold demanded, in order to prevent an enlargement of Serbia. Only after the assassination of the heir to the throne Franz Ferdinand in Sarajevo (June 28, 1914) did the government abandon its peace policy.
The declaration of war on Serbia on July 28, 1914, which triggered the First World War, was intended to strengthen Austria-Hungary’s influence in the Balkans, but a quick victory was not achieved.
After severe setbacks (loss of Galicia, Carpathian battle), Russian Poland was occupied in 1915. The attempt to establish a Kingdom of Poland under a Habsburg met resistance from the German Empire, with which on November 5, 1916 only a Kingdom of Poland was proclaimed without setting borders. Despite Austria’s offer to cede Trentino and make Trieste a free city, Italy declared war on May 23, 1915, and Romania in June 1916. With German help, large areas of the Balkans could be conquered, the front held against Italy. In addition to the growing economic burden, the internal situation was made more difficult by the peoples’ striving for independence (governments in exile of the Czechs and Poles, formation of the Czech legions). On October 21, 1916 became Prime Minister K. Count Stürgkh murdered. His successor, E. von Koerber, tried to convene the Reichsrat, which had been adjourned in 1914, for internal consolidation, but failed because of the death of Emperor Franz Joseph. The Reichsrat did not meet again until 1917. In the spring of 1918, the Sixtus affair led to an even greater dependence on the German Reich. The separate peace with Russia, Ukraine and Romania in 1918 did not bring relief. After the collapse of the Bulgarian front (September 1918), on October 4, 1918, an offer of peace was made to the USA on the basis of T. W. Wilson’s Fourteen Points. At the end of October 1918 the Italian front collapsed; on November 3, 1918 the armistice was signed.