Holy Roman Empire

No matter what the British thought, the Vienna Peace Conference was held as scheduled. Without any surprises, England, France, and Austria all became mediating countries.

With the arrival of the negotiating delegations, Vienna became ever more bustling. Representatives from Prussia and Russia buzzed around like diligent bees, flitting from embassy to embassy, producing hot news every day that the public eagerly discussed.

The British supported the Berlin Government, the French were somewhat hesitant, barely siding with the Prusso Federation, though their support was limited.

Austria, as the host, had yet to declare its stance and was now the main target of both parties’ struggles. Whoever won the support of the Vienna Government would gain an advantage in the negotiations.

Setting aside valuable meeting minutes, Franz asked, "Have we roughly figured out the bottom lines of both Prussia and Russia?"

It was not clear when it began, but everyone in diplomatic negotiations learned to make outrageous initial demands, not considering feasibility in the slightest.

Take the current situation, for example: the Russians demanded that the Berlin Government cede East and West Prussia, Pomerania, Poznan region, and the Schleswig-Holstein Duchies, and also demanded war reparations amounting to approximately 960 million Divine Shields.

Among these, the Schleswig-Holstein Duchies were to be returned to the Danish people, and although Franz was not sure if the Russians had an agreement with the Danish, he knew that "money" was the root of the problem.

The war had ended, but the troubles of the Tsarist Government had just begun. In the years to come, the Russians would have to embark on a long journey of debt repayment.

Up to now in the war, the Russians had accumulated a tremendous amount of debt. Just the debt to Austria alone amounted to 670 million Divine Shields.

Currently, the Russians had to pay nearly 4 million Divine Shields in principal and interest to Austria every month, and it would take decades to fully repay the debt, with the final total exceeding 1.4 billion Divine Shields.

With an annual revenue of only around 100 million Divine Shields, just the debt to Austria took away nearly half, which was clearly unsustainable for Russian finances.

According to Franz’s knowledge, aside from Austria, the Tsarist Government’s foreign debt in other countries also amounted to no less than 200 million Divine Shields, mainly from the Nordic Federation and the United States of America.

The Nordic Federation’s loan was secured by Finland, and the United States was one of the few diplomatic achievements of the Tsarist Government.

There was no choice, as individuals fear solitude, and nations, being made of individuals, naturally inherit this trait. It was not surprising for two countries isolated by the world to band together.

During the Civil War, the Tsarist Government supported the Northern government, and now naturally expected something in return. Not that the Americans were particularly righteous, but the United States was also compelled to do so.

Facing the united pressure from the four countries including the UK, France, Austria, and Spain, European countries kept their distance from them, and except for the equally unwelcome Russians, they could not find better partners.

Although the United States, after the division, was not as wealthy as in the original timeline, they still managed to sell tens of millions worth of war bonds for the Russians.

This was only external debt, and in addition, the Tsarist Government owed a large amount of domestic debt, the specifics of which Franz could not know, but it was an astronomical sum anyway.

The compensation for injured and deceased soldiers post-war, the settlement of veterans, and the economic reconstruction of areas affected by the war represented another huge expense.

In this regard, the Tsarist Government was not much better off than the Berlin Government; both were on the verge of bankruptcy every minute.

Times had changed, and most of this debt was secured by territories; failure to pay meant ceding land, so fiscal bankruptcy was not a viable option anymore.

Leaving other regions aside, the Finland region absolutely could not be abandoned; otherwise, the strategic security of St. Petersburg would become an issue. Continue your story on empire

From an economic standpoint, the Schleswig-Holstein Duchies were more valuable than the icy wasteland of Finland. Using these two duchies to offset the debt might even bring in some extra pocket money.

In passing, he wanted to strengthen the Danes and complicate the internal relations of the Nordic Federation, eliminating any potential threats from the north.

Franz understood the Tsarist Government’s desire to extricate itself from the fiscal crisis, but the conditions they proposed were unacceptable.

Setting aside whether the Germany Region would be divided, the problem was that the Berlin Government was also broke. How could they pay the war reparations after such a slaughter?

If the Russians’ terms were acceptable, given they were the victors, a lion’s big mouth was nothing unusual. However, Franz barely glanced at the conditions proposed by the Berlin Government before he lost interest in reading further.

The first condition was for the Russian Army to immediately withdraw from the territory of the Prusso Federation; the rest was no longer important, as this point was non-negotiable.

Foreign Minister Weisenberg replied, "We can preliminarily confirm that the Russians aim to annex land and demand war reparations.

Besides taking back their original territories, they also want to swallow up the already occupied East Prussia and Poznan region, which is not a big problem.

The key issue is the war reparations. The Tsarist Government is genuinely out of money and wants to seize this opportunity to recoup and fill the financial gap.

From the current situation, if the Berlin Government provides enough reparations, the Russians might accept without annexing territory.

The situation in Prussia is a bit complicated. The Berlin Government is neither able to pay the war reparations nor does it want to lose East and West Prussia; only the cession of the Poznan region is considered."

After pondering, Franz smiled and said, "The situation is a bit better than we expected. It seems the cash-strapped Tsarist Government is the best kind of Tsarist Government, or else they could have swallowed Prussia whole.

As for the thoughts of the Berlin Government, they are not important at this time. As the defeated party, they have little room for choice. The territories already consumed by the Russians are unrealistic to expect back.

Both Prussia and Russia are in poor financial shape. For every day the war continues, they must add hundreds of thousands of Divine Shields to their military expenditures; they simply cannot afford to drag this on.

For the time being, we should not get too involved. The negotiations have just begun, and it’s likely that the Prusso-Russian representatives have not yet entered the fray. It is necessary to let them cool down first.

We can meet privately with the Prussian representatives and suggest they pay off debts to various countries with physical assets. I believe no one would refuse,"

"Paying with ’physical assets’" is the biggest pitfall. Prussia does not produce many resources. Paying debts with "physical assets" would mean industrial and commercial goods are the only things they can offer.

Franz had seen how harmful this stuff can be. At the outbreak of World War II in the original timeline, the industry of the Third German Empire actually surpassed the combined total of England and France.

Before World War I, the German Empire contributed 14.8% to the global industrial output, while the Great Britain Empire accounted for 13.6%, with both nations quite close, and England and France together far surpassing the German Empire.

Durin the World War II period, the situation changed. Initially, the Third German Empire made up 13.2% of the world’s industrial output, the British fell to 9%, and the French were at a mere 4.5%. After annexing Austria and the Czech-Slovak region, the Third German Empire surpassed the combined total of England and France.

(Data for reference only, as different sources may vary)

From the industrial data alone, England and France appeared more like defeated countries. Germany’s share of industrial output decreased because of the rich coal and iron producing Alsace-Lorraine returning to France, and the textile center of Silesia being ceded to the newly independent Poland.

The main reason for all this was "payment in kind." To repay the war reparations, Germany had to provide a large amount of industrial and commercial goods at discounted prices each year.

Capitalists discovered that being middlemen was more profitable than producing goods themselves. Naturally, they prioritized profits first.

Soon, made in Germany goods flooded both the domestic and colonial markets of England and France. The markets the German Army failed to capture on the battlefield were ironically secured through post-war reparations.

It must be said that sometimes this world is truly nonsensical.

As nonsensical as it might be, Franz was very much looking forward to this moment.

"Yes, Your Majesty!" replied Foreign Minister Weisenberg.

…

Prime Minister Felix said, "Recently, the British have been very active, promoting the benefits of establishing the North German Empire everywhere, completely disregarding us and causing a very negative impact.

Especially in the Kingdom of Hanover, many newspapers are advocating North German nationalism. They are stirring up people’s hearts under the guise of religious beliefs, attempting to split the Empire.

…"

What was to come would still come; establishing a North German Empire of such magnitude wasn’t a decision a few people at the top could make on a whim.

If they couldn’t get the support of the people, then the North German Empire would be no different from the current "Comedic Empire"—in name a country, but in reality, the Central Government couldn’t govern anyone.

If the structure of the system remained as loose as it now, it would be more appropriate to call it a Sub-State Alliance rather than an Empire.

That is not what the British or George I want. If they can’t increase the centripetal force among the people, the empire will only have value as a buffer zone for the major powers.

After some thought, Franz said, "We could create some small trouble for them, but we must be mindful of the extent—can’t scare them off.

It would be best to draw everyone out; it’s a good opportunity to filter who our friends are and who our enemies are.

If the British want a North German Empire, let’s give them a North German Empire, but it must meet our requirements.

The Kingdom of Prussia is an excellent pawn; no matter how much it is weakened, its power is still above Hanover’s.

A central government that is weak while regional powers are strong has always been the way to disaster.

Once they get through the post-war decline, the unrestful Junker aristocracy will stir the Berlin Government to challenge Hanover, and then there will be a spectacle to see.

Perhaps we won’t need to wait that long, as the Kingdom of Prussia is currently in urgent need of money to save itself. I don’t believe these active supporters will still want to establish the North German Empire when it’s time for them to pay up."

Deep down, Franz had already made a decision to let the Russians impose an exorbitant indemnity on the Kingdom of Prussia.

It didn’t matter whether Prussia could pay it back; at worst, they could pay it off over one hundred years, or even two hundred if necessary.

When needed, the Berlin Government’s debts could be transferred to the head of the North German Central Government.

There was a precedent for this; after the Prusso Federation was established, the Berlin Government wanted to thoroughly integrate Prusso-Poland, directly unifying the military and civil administrations, making the Polish Government’s debts fall on the Central Government.

Theoretically, now that the Kingdom of Poland had fallen, the Berlin Government had the opportunity to refuse to honor the previous Kingdom of Poland’s debts, allowing the Russians who occupied Poland to take responsibility.

But this is a world where the strong prey on the weak; the will of the great powers is international law. The creditors lack the power to force the Russians to repay, and can only bully the weaker Berlin Government.

The Berlin Government, without the boldness to refuse, can only continue honoring these debts. A similar event could be replicated in the North German Empire.

No matter what promises the British have given, with one debt transfer, the supporting Sub-States would choose to switch sides.

Why rush when you have the means to undercut the foundation? Using this opportunity to deplete the excess energy of John Bull, preventing them from scheming in secret, is the true path to power.

Foreign Minister Weisenberg said with great concern, "Your Majesty, the situation may not develop according to our will. Given the current situation, the Kingdom of Prussia will definitely downsize its military significantly after the war.

Due to the impact of this war, the Junker aristocracy has suffered greatly. Over a thousand Nobility Officers have fallen on the battlefield, and more than three hundred noble families face a crisis of extinction caused by the war. Nôv(el)B\\jnn

With the massive loss of the younger generation and the older generation stepping back, the Junker aristocracy will face the crisis of lacking successors and their control over the country is bound to decrease dramatically.

Perhaps we don’t need to wait for the future; this war itself is an opportunity.

Someone must always bear responsibility for defeat, and if Wilhelm I decides to abdicate in the aftermath of the war, these high-ranking Junker aristocrats will also be forced to step down.

Time is so pressing that they won’t even have the time to train successors. The positions they leave will be filled by deputies or subordinates.

After this round of political shakeup, Junker aristocracy will lose control of the government. The new government will most likely take actions to continue weakening the power of the Junker aristocracy.

For instance: use financial pressure as an excuse to dismantle most of the domestic army and break free from the deformed political structure of an army-dominated state."

It’s not a matter of possibility; it is bound to happen. Political struggles are cruel. If Wilhelm I doesn’t take advantage of this opportunity, then he is not Wilhelm I.

Wilhelm I is already over eighty years old and doesn’t have many years left to live, and his health has already begun to deteriorate from the impact of the war’s failure.

Having the chance to oust political rivals and clear the hazards to his descendants’ accession to power, he has no reason to refuse.

And this is a blatant strategy, not the Emperor forcing everyone to resign, but the honor of the aristocrats makes it awkward for them to hold high positions.

Because of the war, the core of the Junker aristocracy is mostly in the military. In the government, apart from some of the upper echelon, most aren’t military Junkers.

After the political reshuffle, the military loses control of the government. No matter who comes to power, they will not give them a second chance to control the government.

The same scene played out in the original timeline as well. After World War I, the Junker aristocracy was greatly diminished, and after being suppressed from all sides, was marginalized during World War II by "Hit***," losing even control of the military.

…

A Prussia controlled by politicians is not the same concept as a Prussia controlled by the military, and it is much lower at its base.

Unlike "milit***ism," which habitually uses fists to speak, politicians prefer compromise. This undoubtedly adds uncertainty; no one can guarantee the Berlin Government won’t compromise with Hanover.

Franz nodded, "This is indeed a problem. However, the interests involved here are so massive that even if both sides really do compromise, it won’t be possible to complete in the short term.

Let the Foreign Ministry keep an eye on them. If necessary, we can take extraordinary measures."

Frankly, Franz wasn’t too worried. To achieve this, not only superior political skill is required, but also a suitable international environment is necessary.