The defeat at Königgrätz in the Austro-Prussian War of 1866 resulted in Austria’s exclusion from Germany; the German Confederation was dissolved. The monarchy’s weak external position forced Franz Joseph to concede also internal reforms. To appease Hungarian nationalism, Franz Joseph made a deal with Hungarian nobles, which led to the creation of Austria-Hungary through the Austro-Hungarian Compromise of 1867. The western half of the realm (Cisleithania) and Hungary (Transleithania) now became two realms with different interior policy, but with a common ruler and a common foreign and military policy.
The 1867 compromise heightened the desire for autonomy among other national groups within the empire, which was also home to Czechs, Poles, Ruthenes (Ukrainians), Slovaks, Serbs, Romanians, Croats, Slovenes, and Italians. About 6.5 million Czechs living in Bohemia, Moravia, and Austrian Silesia made up the largest, and most restless minority.
Picture 1: Wien 1900
The Austrian half of the dual monarchy began to move towards constitutionalism. A constitutional system with a parliament, the Reichsrat was created, and a bill of rights was enacted also in 1867. Suffrage to the Reichstag’s lower house was gradually expanded until 1907, when equal suffrage for all male citizens was introduced. However, the effectiveness of parliamentarism was hampered by conflicts between parties representing different ethnic groups, and meetings of the parliament were ceased altogether during World War I.
The decades until 1914 featured a lot of construction, expansion of cities and railway lines, and development of industry. During this period, now known as Gründerzeit, Austria became an industrialized country, even though the Alpine regions remained characterized by agriculture.
Austrian foreign minister Gyula Andrássy (1823-1890), adopted a policy of friendship with the German Empire, which was founded in 1871. Andrássy said that Austria-Hungary would not interfere in German internal affairs, while Germany backed Austro-Hungarian attempts to limit Russian influence in south-eastern Europe. In 1878, Austria-Hungary occupied Bosnia and Herzegovina, which had been cut off from the rest of the Ottoman Empire by the creation of new states in the Balkans. The territory was annexed in 1907 and put under joint rule by the governments of both Austria and Hungary. In 1879, Germany and Austria-Hungary signed a formal alliance, which, with the addition of Italy in 1882, became known as the Triple Alliance.
The assassination of Archduke Franz Ferdinand (1863-1914), who was the presumed heir of Franz Joseph as Emperor, and his wife, in Sarajevo, in 1914 by Gavrilo Princip (a member of the Serbian nationalist group the Black Hand), was the proximate cause of World War I, a global military conflict which took place primarily in Europe from 1914 to 1918. After receiving assurances of support from Germany, the Austro-Hungarian foreign office held the Serbian government responsible, and issued an ultimatum. Despite a conciliatory reply, Austria-Hungary declared war on Serbia on July 28. Germany declared war on Russia and France in early August, sparking World War I. Over 40 million casualties resulted, including approximately 20 million military and civilian deaths. The Entente Powers, led by France, Russia, the British Empire, and later Italy (from 1915) and the United States (from 1917), defeated the Central Powers, led by the Austro-Hungarian, German, and Ottoman Empires.
Picture 2: The Mayor of Vienna visits the Austro-Hungarian Army at Isonzo
Austro-Hungarian military initially fought Russia and Serbia. Italy, which had declared its neutrality, left the Triple Alliance and entered the war, in 1915, on the side of the Allies. The monarchy began to disintegrate, Emperor Franz Joseph I died in 1916, and was succeeded by his grand-nephew, Karl of Austria (1887-1922). In 1917, Emperor Karl failed to achieve a separate peace with the Allies, angering the Germans.
During early to mid 1918, Austro-Hungarian forces were defeated, while food shortages resulted in strikes and demonstrations at home, and mutinies in the military. Nationalist groups organized national councils. The Southern Slavs, meeting in October 1918, advocated union with Serbia, while Czechs proclaimed an independent republic in Prague. The Hungarian government separated from Austria on November 3, the day Austria and Hungary each signed an armistice with the Allies. On November 12, Emperor Karl went into exile. Between 1918 and 1919, Austria, with most of the German-speaking parts, was officially known as the Republic of German Austria (Republik Deutschösterreich). The monarchy was dissolved in 1919, and a parliamentary democracy was set up by the constitution of November 10, 1920.