Holy Roman Empire

Chapter 503: Smoke and Mirrors

The negotiations between Britain and Russia were anything but secret. Even Franz in far-off Vienna caught wind of them, with the details of the talks almost entirely revealed.

In the world of diplomacy, everyone knew the game: hold out for a better offer. The Russians had leaked the information on purpose, clearly waiting for Austria to make an offer.

The offer didn’t need to surpass the British one. It just needed to be close enough for the Russian government to choose Austria over Britain.

This was a matter of interests. The Russian-Austrian alliance held far more value than any potential Anglo-Russian deal, especially since the British weren’t offering a true alliance.

A quick glance at the map showed the long, vulnerable border between Russia and Austria, devoid of natural defenses. Without a treaty, the defense burden would be a nightmare for the already exhausted Russian government.

If relations with Austria soured, it would mean that all neighboring countries were enemies or potential enemies.

When the Russian Empire was strong, it conquered from east to west, establishing a formidable reputation. Now that it was showing signs of fatigue, it became a tiger being preyed upon by a pack of wolves.

The last Russo-Prussian War was a harsh reminder to the Russian government of just how many enemies lay in wait. If they lost again in a second Russo-Prussian War, even the Nordic Federation might seize the opportunity to join in.

The whispers of Finnish-Swedish collusion were no secret. When the Russian Empire was at its peak, the Swedes stayed in line. But after the failures in the Russo-Prussian War, even King Charles XV dared to openly meet with Finnish independence leaders.

Of course, this potential threat didn’t frighten the Russians. Although it was difficult for the Russians to expand outward, it wasn’t a big problem to defend their current territory.

Enemies were plenty, but few were ready to act. Apart from the Kingdom of Prussia, the Kingdom of Poland, and the Ottoman Empire—whose animosity was deep and irreconcilable—the other enemies were more likely to strike only when the moment was right.

Now, the Russian government was so poor that their coffers clinked empty. With nothing left to bargain with but their domestic market, they naturally wanted to sell for a good price.

Originally, they had hoped to have Britain, France, and Austria compete against each other with their bids. Unfortunately, the French were too busy and unwilling to participate in the competition.

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Putting down his teacup, Franz asked with a sullen face, “The Russians have shown their hand. Do you think we should compete with the British?”

It was clear that he was in a foul mood. The Russian government’s maneuver this time hit Austria’s weak spot.

South Africa’s gold had yet to be mined, and in the struggle for monetary supremacy, the guilder-gold system was already at a disadvantage. If the Russian government sided with the British now, it would almost certainly declare the victory of the pound-gold system.

Prime Minister Felix responded angrily, “Your Majesty, we cannot allow this extortion by the Russians. We must give them a harsh lesson.”

Austria had paid a considerable price to entice the Russians to join the guilder-gold system. Now, with the benefits taken and the Russians pulling this stunt at a critical moment, it seemed like a betrayal to Prime Minister Felix.

Franz nodded and, without waiting for others to speak, decisively said, “The Foreign Ministry should remind the Russians that the Russo-Austrian alliance is about to expire, and their actions are deeply disappointing!”

Making an offer was out of the question. How could the same commodity be sold twice? The Russian government needed money, but that was not Franz’s concern.

Regardless of any justification, breaking a commitment, even a verbal one, was still betrayal.

After a pause, Franz stopped himself and said, “Never mind, let’s not be bothersome at this moment. Send an invitation to the Prussians. William I will know what to do.”

How could verbal threats be as intimidating as actual actions? If the Russians dared to side with the British, he would support Prussia in the next Russo-Prussian War.

Although the Prussian government couldn’t offer any bargaining chips, the prospects they painted were very enticing!

If Alexander II could crush the Prussians before the end of the Russo-Austrian alliance, Franz would have nothing to say—he wasn’t one to renege on his word, and Austria would certainly remain neutral.

If they waited until the Russo-Austrian alliance dissolved and then the Russo-Prussian War broke out, they shouldn’t blame him for kicking them when they were down. Not to mention, simply cutting off Russo-Austrian trade alone would be enough to cripple the Russians.

If that wasn’t enough, allowing the Prussian navy into the Aegean Sea to join forces with the Ottoman Empire’s navy, and blockading Russia’s trade route to the Mediterranean would be another good option.

Many know how to kick someone when they’re down. If the Nordic Federation didn’t know to block the gateway to the Baltic Sea, Franz would lose respect for them.

With both lifelines cut, the Russian government couldn’t possibly import strategic materials from the Far East for the war, right?

The Trans-Siberian Railway hadn’t even started construction. Even if it began immediately, it would still take over a decade to complete.

Foreign Minister Wessenberg analyzed, “Your Majesty, we don’t need to be so proactive. The Prussians are likely more anxious than we are and will come to us soon enough.

With Britain and Russia getting closer, it’s uncertain if their ally will support them in the next war.

If the Prussians can’t disrupt this Anglo-Russian deal, they’ll have no choice but to turn to us. Relatively speaking, we hold the most influence in Eastern Europe.”

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Every politician is a skilled actor. When the Russians probed with the monetary system, Franz naturally played along.

The bigwigs of the Austrian government put on a grand performance for the Russians, showing them exactly what they wanted to see.

Before long, the content of this meeting would be transmitted through covert channels to Alexander II’s desk, and then it would be his turn to have a headache.

The mix of truth and lies was so complex that even Franz wasn’t sure if the meeting’s content would become reality.

The only thing that could be certain was that Franz was pretending to be “angry”. Having been emperor for so many years, he had long learned to keep his emotions in check. How could he possibly openly reveal them?

Moreover, everyone had their own positions. From the Russians’ perspective, their actions weren’t wrong.

Franz himself often deceived allies and was equally often deceived by them. If he got angry every time, Franz would probably have died from anger long ago.

If he were genuinely angry, he wouldn’t have called a meeting but would have taken direct action in retaliation. For instance, he might have supported a pirate fleet in the Aegean Sea to block the Russians’ routes. Or he might have funded the Russian revolutionaries to cause trouble for the Russian government.

In comparison, supporting the Kingdom of Prussia would be the last resort. Bringing down Russia only to see Prussia rise in its place would be a waste of effort.

The performance was a tactic namely “repairing the plank road by day while secretly crossing the Wei River.” After so much preparation, Austria was finally ready to take action.

It wouldn’t be long before the strategic value of the Persian Gulf would become apparent, and Franz naturally wanted to get involved. He couldn’t allow the British to dominate the area entirely.

Had it not been so close to India, where the British kept a watchful eye, Franz would have taken action long ago.

Taking advantage of the Tripartite Alliance, when else would be a better time to move against Oman and extend their influence to the Strait of Hormuz?

Austria had dealt a heavy blow to the British in South Africa, prompting the British government to draw Russia into the free trade system to undermine Austria. Franz, in turn, extended his hand to the Persian Gulf, which the British coveted. Everyone was using their own methods.

The Russians probably never imagined that from the beginning, Franz had planned to sell them out to the British.

It was inevitable. Having already seized a large part of British South Africa, and now eyeing the Persian Gulf, which the British saw as their own, Franz needed to appease the British somehow.

Currency hegemony wasn’t easy to establish, especially in the gold standard era. If the British didn’t have enough gold, could the pound-gold system still function?

Since that was the case, it was better to let the British be happy for a few days. They could then use the halo of victory to cover up their failures in overseas colonial expansion.

As for the Russians, it was unfortunate, but as the conflicts of interest between the two countries grew, the alliance couldn’t be sustained. This wasn’t something that could be salvaged by individual efforts.

Unless the Russian Empire continued to decline, then everyone could become good friends again. Obviously, this was impossible. Alexander II’s reforms had already made Franz feel threatened.

In this round of reforms, Alexander II was imitating Austria in many aspects. Compared to the original timeline, these social reforms were much more thorough.

It wasn’t just the emancipation of the serfs. Alexander II also resolved land conflicts and accelerated industrial development.

Since the end of the civil war, the Russian Empire’s commerce and industry had entered a period of rapid growth. Although their industrial products were still of poor quality, the growth rate of their production capacity was astonishing.

The industrial capacity lost during the Russo-Prussian War was restored within just a few years, and the total industrial output even surpassed pre-war levels.

If not for the limitations in transportation and lack of capital, the Russian Empire would have already been transformed. Solving either of these problems would catapult them into a period of rapid development.

They already had the basic elements for industrial development: abundant resources, low labor costs, and favorable development policies.

Due to the extensive land reclamation, Russian grain faced sluggish sales, causing domestic grain prices to drop repeatedly, which in turn significantly lowered labor costs.

Russian labor costs were only a quarter of Austria’s and a fifth of Britain’s. For labor-intensive industries, this was an unparalleled advantage.

Not only was labor cheap, but industrial raw materials were also very affordable. The only expensive aspect was transportation, but not all areas were affected, as the Russian Empire also had rivers.

Capitalists would eventually recognize these advantages. As long as the Russian government maintained its current level of governance, development was just a matter of time.

This was Alexander II’s achievement. By making examples of a few, he successfully intimidated Russian bureaucrats. To date, he had exiled thousands of bureaucrats to Siberia to enjoy the northern scenery.

Corruption within the Russian government was still severe, but its execution capability had improved significantly, with no one daring to feign compliance anymore.

The more Franz learned, the more he realized the terrifying potential of the Russian Empire. Although Austria no longer feared Russia’s rise, there was no need to cultivate a competitor.

Therefore, when the Russians started acting up, Franz stopped trying to appease them. The Russian government had misjudged and thought they could gain benefits this way.

Even regarding Alexander II’s currency reform, Franz was no longer enthusiastic. Although there were significant profits to be made by getting involved, Russia would still benefit the most.

Since the Russian government intended to use this as a bargaining chip, it was best to drag it out. Even if the Russian government leaned towards the British, it didn’t matter.

The British weren’t charitable either. If London’s bankers didn’t squeeze them dry, could they still call themselves bankers?

To avoid being labeled as untrustworthy, Franz decided to forgo these benefits. Anyway, the Russian government’s credibility was already in shambles, and adding the charge of breaking the alliance wouldn’t make much difference.