Holy Roman Empire

Once the seeds of doubt are sown, they never go away. After a meticulous study of the Vienna Government’s actions over recent years, Dumbledore grew increasingly puzzled.

If Austria wanted to target France, why would they let them annex the Italian Area?

When propagating to the public, it could be explained away by France’s might. As a member of the Cabinet, Dumbledore certainly didn’t think so.

No matter how powerful France was, it couldn’t stand against all of Europe teamed up. If the European nations united and applied pressure, France would have to beat a dismal retreat.

Expanding territory on the European Continent has never been an easy task, and the Italian Area is no barren backwater, Dumbledore didn’t believe Austria lacked ambition.

The French government had studied this issue for many years and finally reached an almost unbelievable conclusion—the Vienna Government adhered to the spirit of contracts.

The truth no longer mattered, as the meat had already been consumed. No matter how much they doubted, the French government would not give up the Italian Area.

Not understanding it was okay, just look at Austria’s military strength. The so-called "threat" existed only on the basis of strength.

Dumbledore took a breath of relief as he compiled the recent data of the Austrian Army. The threat indeed existed, but France could still cope with it.

Take action?

Sorry, as a qualified bureaucrat, the first step is to weigh pros and cons, not to act blindly.

The threat from Austria was only potential. Without sufficient profit, there was simply no reason for France and Austria to come to blows out of the blue.

In this era of warfare, the defensive side clearly had the advantage. Not to mention, just the deployment of troops determined that.

By comparison, as a member of the Cabinet Government, Dumbledore was more worried about the military becoming too powerful. Right from the start, Geoffrey Friedman had found the wrong person.

Prussia and France were different, one had a state with an army, and the other an army with a state. What seemed perfectly reasonable to the Berlin Government was entirely different in other national governments.

Because a threat might exist, taking direct countermeasures is the thinking of a military person, while politicians are always profit-first.

Knowing that they were being provoked and acting thoughtlessly as someone else’s pawn is the act of a fool.

Geoffrey Friedman successfully stirred up France-Austria relations, but didn’t alter the outcome of the negotiations. If you want France to contain Austria, it can be done, but it will cost.

In the face of interests, the Paris Government still won’t budge an inch. Supporting the Prusso Federation because of the threat from Austria is out of the question.

All are continental nations; to France, both Prussia and Austria are potential threats. It’s merely a matter of "threat level."

...

As the key moment of the negotiations between Prussia and France approached, the talks between Russia and Austria too were drawing to a close.

Foreign Minister Weisenberg, "Your Excellency, the Envoy, I do not see your country’s sincerity. The collateral you’ve put forward is too little and not of equivalent value.

If these are the only collaterals, I have grave doubts that your government would simply abandon these regions, which would mean a substantial loss to us."

Russian Envoy Niklaevich, "No, we are indeed sincere. Your Excellency, the Minister, do not forget, we have even pledged our gold reserves; defaulting is simply not a possibility."

Weisenberg remained unmoved. If not for the acquisition of the Russians’ gold reserves and the promotion of currency hegemony, he wouldn’t even be negotiating here with the Russians.

The so-called territorial collateral, the Tsarist Government indeed lacked earnestness. Perhaps as a means to block Austria’s entry into the Black Sea, the Russians’ mortgaged territories lacked any seaports.

The Bulgarian region and territories west of the Dnieper River (Central and Western Ukraine + Moldova), offered by the Tsarist Government as collateral, lacked crucial coastal areas.

In an era dominated by sea power, without ports, all being inland regions, these territories naturally diminished in value.

From the Russians’ perspective, they had reasons for their actions. Allowing Austrians into the Black Sea was easy, but driving them out would be difficult.

Given the sorry state of the Black Sea Fleet, if the Austrian Navy entered the Black Sea, Russia’s interests in the region would be severely threatened.

When it comes to interests, the Tsarist Government wouldn’t dare test Austria’s integrity. If the stakes were high enough, perhaps the Vienna Government would intentionally let them be defeated for the sake of the collateral.

Even the current territorial mortgage was a risky decision made by the Tsarist Government after weighing the pros and cons several times.

"If Your country’s government were to mortgage all its gold reserves, we naturally wouldn’t worry about you defaulting, but Your country has only mortgaged half of its gold reserves.

Your country has always been a major gold-producing nation, with tens to hundreds of tons of gold mined each year; replenishing this portion of the reserves would not be difficult."

"Your Excellency, the Envoy, should be clear that we are not interested in Your country’s territory. Not all land is of immense value, especially after the loss of seaports, which significantly decreases its value."

Envoy Niklaevich furrowed his brows; replenishing gold reserves wasn’t difficult for the Anglo-Austrian two countries. For other countries around the world, raising gold reserve levels was extremely challenging.

Russia might be one of the major gold-producing countries, but it couldn’t withstand the annual outflow! Especially now that war was imminent, a massive outflow of gold and silver was simply unavoidable.

To mortgage all gold reserves was to place one’s economic lifeline entirely into the hands of the Austrians; to prevent the Ruble from becoming worthless paper, Russia would have no choice but to obediently comply.

Envoy Niklaevich: "Your Excellency, the Minister, that’s impossible. Mortgaging half of our reserve gold is already our bottom line.

We can negotiate on the territorial mortgage; we can add some ports. In return, Your country must guarantee our loan with the Nordic Federation, and ensure that Your navy never enters the Black Sea."

In their efforts to raise funds, the Tsarist Government had repeatedly lowered its bottom line. This was particularly true after the arrival of unfavorable news from London, where the Tsarist Government’s bottom line was reduced yet again.

To date, Alexander II had no way out. If he did not initiate the war in advance, it would be too late once the enemy was prepared.

The word "compromise" had never been in Russians’ dictionaries. The Prusso-Russian War had essentially become the means by which the Tsarist Government transferred internal conflicts; the consequences of stopping were unimaginable.

Knowing that initiating a war now could lead to heavy losses, the Tsarist Government still had to go ahead with it, toughing it out.

Wessenberg: "That is possible, but Your country must put up an equivalent mortgage. If Your country’s government defaults, we have to pay off the debt, and we must be secured.

The navy never entering the Black Sea, I cannot guarantee that. However, we can agree that as long as Your country’s government does not default, the Austrian Navy will not enter the Black Sea."

Envoy Niklaevich almost had a nightmare every time the word "collateral" came to mind; it made his scalp tingle. This Russian-Austrian negotiation had already exhausted him greatly.

On the other hand, whether the Austrian Navy entered the Black Sea was a minor issue; all promises were useless. As long as it benefited them, no one could be stopped."

Envoy Niklaevich hurriedly said, "Your Excellency, this is just a normal commercial loan guarantee; we can pay a guarantee fee. There is no risk, and Your country can rest assured."

Wessenberg shook his head: "I’m sorry, Your Excellency the Envoy. War is about to break out. If Your country can win the war, then I believe there will be no problem.

If Your country loses the war, or ends in a stalemate, will Your government still be able to repay the debts and honor its commitments when the time comes?"

It was almost a direct expression of doubt in the Tsarist Government’s credibility. In his view, the Tsarist Government would certainly honor its commitments if it lost the war; it was rather if they won that he couldn’t guarantee.

A defeated Russian Empire could not refuse even if it wanted to; the Nordic Federation could send its own troops to collect, as kicking someone when they’re down was a skill everyone was proficient at.

In contrast, Austria’s collateral was a bit more troublesome. Parts of Western Ukraine could very well end up in the hands of the Prusso-Polish Federation after the war and the Vienna Government might face a struggle to claim those areas.

...

After an intense battle of wits, on October 10, 1879, Russia and Austria signed the "Russian-Austrian Trade Agreement" in Vienna, which stipulated:

The Russian Empire mortgaged the regions west of the Dnieper River and the Russian Balkans, raising 480 million Divine Shield from Austria, including 180 million Divine Shield in loans and 300 million Divine Shield in bonds (Note: excluding Odessa and Istanbul).

Loan interest: 3.5‰ per month

Bond interest: 8.4% per year

Handling fee: 3%

...

A week later, the representatives of Russia, Austria, and the Nordic Federation signed the "Debt Guarantee Contract" in St. Petersburg, with the Vienna Government providing a safety guarantee for the debts of both Russian and the Nordic countries.

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