Holy Roman Empire

Chapter 110: War Compensation

Vienna International Grand Hotel.

Palmerston pleaded, “Mr. Metternich, your demands are too exorbitant; they already exceed the financial capabilities of the Kingdom of Sardinia!”

Metternich, composed and unruffled, replied, “Mr. Palmerston, let’s calculate this carefully. In the recent Austro-Sardinian War, Austria expended 100 million florins on war expenses and suffered 12,000 casualties among its officers and soldiers. If one were to pay 1,000 florins in death compensation, that would amount to 12 million florins.

The civilian death toll reached a staggering 586,000, with 26,000 nobles among the casualties, and the highest rank among them being that of a Marquess. Over a million people have also been left homeless.”

Calculating on the basis of each civilian costing 500 florins in compensation for casualties and each noble casualty amounting to 3,000 florins, the total amounts to 371 million florins. As for the displaced population, even if they were to be conservative; it would still require at least 150 million florins for resettlement costs, right?

In the Lombardy and Venice regions, nearly half of the cities were destroyed in the flames of war, leading to a complete economic collapse. The post-war reconstruction costs will not be less than 300 million florins.

Furthermore, the Sardinian army has been plundering extensively from the civilian population, amassing at least 180 million florins. These funds must also be returned.

……

Following the calculations done by the Austrians, Sardinia’s debt might not be settled even into the next century. Without allowing Metternich to finish, Palmerston chimed in:

“Mr. Metternich, we can’t simply calculate the accounts this way. Among the extensive casualties and economic losses, a significant portion can be attributed to the actions of revolutionary factions. The damages caused by the Sardinian army are only a fraction of the overall losses.”

Indeed, these losses resulted from the actions of rebel forces, the Austrian army, and the Sardinian army collectively. However, it appears that Sardinia is expected to shoulder the burden of these losses.

Metternich, with an unwavering expression, stated, “Mr. Palmerston, we have substantial evidence indicating that the uprisings in Lombardy and Venice were masterminded by the Sardinian government.

The losses caused by the rebels naturally require the Kingdom of Sardinia to take responsibility. We are merely requesting compensation of 1.66 billion florins, which, in reality, is already quite modest.”

Palmerston, of course, wasn’t convinced and continued to press Metternich on various points.

For instance, regarding civilian casualties: The Sardinian army didn’t engage in mass killings, so how could they have caused so many civilian deaths in such a short time?

Natural disasters, man-made disasters, and deaths from natural causes can be partially attributed to the Sardinian government, albeit with some effort.

Although the war has led to a displacement of the population, these people are still alive. Is it too ridiculous that they should only be compensated based on the number of deaths?

And demanding compensation and pensions for rebel casualties, isn’t that outrageous? They are all criminals; does the Austrian government need to pay compensation to their families?

No, this must be deducted.

For example: the Sardinian army looted the area. They are all in prisoner-of-war camps, and the plundered wealth could be considered your spoils of war, right? At most, we can provide some compensation for losses. Why would there be so much?

……

After nearly half a month of negotiations, Palmerston finally reached an agreement with Metternich. Sardinia agreed to pay Austria 338 million florins in war reparations and 62 million florins in prisoner-of-war ransom, ending the war (equivalent to approximately 93.52 million taels of silver).

This was already the limit, as Sardinia had not yet undergone the Cavour reforms, and their fiscal revenue, when converted, amounted to just over 10 million taels of silver.

Faced with this huge indemnity, they certainly couldn’t afford it. The existence of the Franco-Austrian Secret Treaty also cut off their possibility of seeking assistance from the French financial sector. Besides borrowing from the British, they had no other choice.

Given John Bull’s character, how could he not take advantage of the situation at this time?

It can be said that after borrowing this massive debt, the future of the Kingdom of Sardinia politically and economically would be fully dependent on the British.

As for the opinions of the exiled Sardinian government, they no longer matter. They had no say in the matter and could only accept their fate.

Disobedience can be resolved by replacing the government. The British invested significantly to support an obedient pawn in the Italian region, thereby strengthening their influence in Italy.

Of course, there’s another factor at play—the British banking consortium has significant loans tied to this situation. The Sardinian government owes the British a substantial sum of money, and if they don’t find a solution, these loans will be lost.

This enormous compensation, instead of representing the absolute limit of what the Kingdom of Sardinia can endure, is more indicative of the threshold to which the British are willing to continue their involvement.

……

On July 7, 1848, the Austrian ambassador in London and the exiled Sardinian government in the United Kingdom signed a ceasefire treaty. Interestingly, the content mirrored the negotiations in Vienna, albeit with different wording.

The British banking consortium extended a loan to the Sardinian government, covering Austria’s war indemnity of 200 million florins. The remaining amount would be paid off over twenty years with an annual interest rate of 5%.

……

The decision to prioritize finances over territory was made by Franz. If France, their pig teammate, weren’t dealing with its own issues, they could have joined forces to divide the Kingdom of Sardinia, with Austria gaining the prosperous regions of Genoa and Turin – a move that would have been worthwhile.

However, with France currently preoccupied, Austria can only do it alone. Unfortunately, Austria doesn’t have the appetite to fully absorb the entire Kingdom of Sardinia.

If they can’t completely annex Sardinia and only occupy parts of their territory, they’ll face prolonged threats of national uprisings, making it difficult to successfully integrate these regions into the nation.

Moreover, within Austria’s borders, there are already a significant number of Italian ethnic communities. Franz doesn’t want this number to continue increasing, as it doesn’t align with his policy of promoting ethnic integration.

Austria, in its concessions regarding the Kingdom of Sardinia, naturally received compensation.

For instance, the British have pledged support for Austria’s expansion in the Balkans and have essentially granted Austria entry into overseas colonial expansion.

In contrast to the complex situation in Italy, with British support, Austria’s expansion in the Balkans merely requires coordination with the Russians.

Overseas colonial expansion is even simpler; as long as Austria charts a colonial direction that doesn’t clash with the core interests of Britain and France, the rest becomes a minor issue.

One has to acknowledge that Palmerston’s judgment was quite accurate. Austria’s strategic focus had indeed shifted away from the Italian region.

Currently, the dominant factions are the Germanists, led by Prime Minister Felix, advocating for expansion in the German region.

Following closely are the Near Easternists, led by Prince Windischgr?tz, Minister of War, advocating for expansion into the Balkans.

Then there are the Colonialists, led by Archduke Louis, advocating for the establishment of overseas colonies.

The impact of the butterfly effect is indeed profound.At this point in history, the Austrian government was predominantly focused on suppressing rebellions, with far fewer aspirations for external expansion.

Behind these strategic moves, there are one or multiple interest groups driving them. On the surface, everyone’s reasons seem compelling, but in practice, they all come with a series of challenges.

Franz was in no hurry to declare his position. In politics, many times it was not just about right or wrong; it was more about considering the involved interest groups and the potential ramifications it might bring about.

……

Palmerston’s current visit wasn’t just about the issue in Italy; it also included mediating the Prussian-Danish War. Austria, in this matter, holds significant influence as well.

“Mr. Metternich, I believe that, regarding the Prussian-Danish War, it is necessary for our two nations to engage in more in-depth discussions.

The actions taken by the Kingdom of Prussia in unilaterally initiating the war should be condemned by the international community. As peace-loving nations, it is imperative that we take more proactive measures,” Palmerston stated.

“Of course, Mr. Palmerston. The Austrian government has long expressed its position:

Schleswig and Holstein are traditional German states, and Austria is hoping they will return to the German Confederation.

However, they must return as independent states rather than becoming part of the Kingdom of Prussia,” Metternich cautiously responded.

Palmerston responded sternly, “Mr. Metternich, Schleswig and Holstein have already belonged to the Kingdom of Denmark; this is a historical matter.

The term ‘German region’ is just a geographical designation, not a nation. The German Confederation is merely a league, and it doesn’t possess any sovereignty!”

There’s no doubt that the British were opposed to the unification of the German regions. Once a unified empire emerged in central Europe, it could potentially challenge the hegemonic status of the British Empire.

Palmerston made his position clear: it was to thwart Austria’s potential aspirations for a unified German region.

Metternich, on the other hand, was against the establishment of a Greater Germany. He believed that unifying the German regions was an impossible feat. After testing the waters with the British, he naturally didn’t have an overly reactive response.

“Mr. Palmerston, the issue lies not in how we perceive it but in the public opinion being guided by Prussian influence. Currently, the Austrian government is held hostage by public sentiment. We’ve just experienced a domestic rebellion, and we must consider public sentiment. In this war, we have no choice but to diplomatically support the Prussians,” Metternich explained.

Metternich emphasized the word “diplomatically,” and Palmerston naturally understood the implied message: Austria does not want Prussia to continue growing, and their support was limited to diplomatic measures, with no intention of taking practical action.

While this response might not have been entirely satisfying to him, it was still acceptable. Essentially, in this Prussian-Danish War, Austria seemed prepared to take a back seat.

Having failed in his attempt to involve the Austrian government in jointly pressuring Prussia, Palmerston did not linger in Vienna and instead headed straight for Berlin.