Damon Mcknight
Austria has undergone several periods of reform, notably under the rule of Maria Theresa, who focused on internal reform and implemented changes to the country's finances, foreign policy, and military. Following the Napoleonic Wars, in which Austria was defeated, the country continued to experience inadequacies in its military, which was insufficiently trained and ill-equipped. This prompted further reforms, including proposals to raise large armies and supplement regular troops with trained reserves and militia. In the 20th century, the idea of reforming Austria was associated with the unification of Austria and Germany, an idea propagated by Hitler, who sought to create a united German nation-state. However, Hitler's vision was not one of reform but of unification, as he despised the multi-ethnic nature of the Habsburg Empire.
| Characteristics | Values |
|---|---|
| Reason for reforms | To be perceived as strong and to defend itself |
| Focus of reforms | Financial and military |
| Changes in foreign policy | Reconciliation to the loss of Silesia |
| Changes in foreign policy | Alliance with France and abandonment of Great Britain |
| Changes in foreign policy | Avoidance of war with the Russians |
| Changes in foreign policy | Alliance with the Turks |
| Changes in economy | Labour as the yardstick of national wealth |
| Changes in economy | Restrictions on emigration |
| Changes in economy | Easing of some imports |
| Changes in education | Introduction of a public education system |
| Changes in military | Introduction of a standing army of 110,000 men |
| Changes in military | Encouragement of nobility to serve in the officer corps |
| Changes in military | Introduction of a school for officers |
| Changes in military | Introduction of military orders as rewards |
| Changes in serfdom | Restriction of aristocratic exploitation of peasantry |
| Changes in serfdom | Change of dues from service to rent-paying |
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What You'll Learn
Maria Theresa's reforms
One of the most important aims of Maria Theresa's reforms was to increase the population, as it was thought that a larger number of inhabitants would bring about an economic upswing. An increase in population would also provide more soldiers for the army. Sparsely inhabited areas such as the Banat region in southern Hungary were systematically settled with colonists from overpopulated areas in a programme of internal colonisation.
Maria Theresa also introduced a system of public education. The motivation for this reform came from concern that the Roman Catholic Church in Austria was no longer maintaining public morality properly. She also restricted the aristocratic practice of exploiting the work obligations of the peasantry.
In the military administration sphere, Maria Theresa proposed establishing an effective standing army of 110,000 men. She also tried to encourage her nobility to take a greater interest in serving in the officer corps, creating a school for officers called the Theresianum at Wiener Neustadt and introducing military orders as rewards for good service.
Economic reforms were also introduced. These included the abolition of internal tariffs with the goal of joining the individual Lands of the Monarchy in a large-scale economic area with unitary rules. The first statistics, censuses and tax cadastres were introduced, enabling the state to gain an insight into the inner structures of the land so that specific economic measures could be implemented.
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Hitler's unification of Austria and Germany
Hitler's desire for an Austro-German union was expressed in his earliest writings and speeches. The first point of the Nazi Party Platform (1920) stated: "We demand the unification of all Germans in a Greater Germany (Großdeutschland) on the basis of the right of national self-determination." The unification of Austria and Germany was also an integral part of the Nazi "Heim ins Reich" ("back home to the realm") concept, which sought to incorporate as many Volksdeutsche (ethnic Germans outside Germany) as possible into a "Greater Germany".
In early 1938, Austrian Nazis conspired to seize the Austrian government and unite with Germany. Austrian Chancellor Kurt von Schuschnigg met with Hitler, hoping to reassert his country's independence, but was coerced into naming top Austrian Nazis to his cabinet and scheduling a national referendum on the issue of unification. Before the referendum could take place, Schuschnigg resigned under pressure from Hitler. On March 12, 1938, German troops crossed the border into Austria, unopposed by the Austrian military. A plebiscite was held on April 10, with threats and coercion employed to manipulate the vote, resulting in 99.7% approval.
The unification of Austria and Germany was a violation of the Treaty of Versailles and the Treaty of Saint-Germain, which expressly forbade the two countries from uniting. The annexation transformed Austria almost overnight, as Austrian and German Nazis worked to erase any traces of a separate Austrian identity and Nazify all aspects of Austrian life. Austria existed as a federal state of Germany until the end of World War II, when the Allied powers declared the Anschluss void and re-established an independent Austria.
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Austria's resistance to Napoleonic France
In 1803, Britain declared war on France, and the Third Coalition was formed in 1804 by British Prime Minister William Pitt the Younger, including Britain, Russia, and Austria. Despite assembling an invasion force of 150,000 men, Napoleon turned his attention to the Rhine in 1805 to deal with the Austrian and Russian threats. In September 1805, 200,000 French troops crossed the Rhine, outmanoeuvring the Austrians and launching cavalry attacks through the Black Forest. This culminated in the Battle of Austerlitz, a tactical masterpiece by Napoleon, which ended the War of the Third Coalition and established the Peace of Pressburg between France and Austria.
Despite periods of peace, Austria continued to prepare for war with Napoleonic France. Johann Philipp, Graf (Count) von Stadion, believed that Austria could not make any long-term accommodation with Napoleon as he represented a mortal danger to monarchical Europe. Stadion proposed raising large armies, supplemented by trained reserves and militia, to defeat Napoleon. In 1809, inspired by the Spanish resistance to Napoleon, Stadion appealed to his people to go to war, leading to the declaration of war in April. While the Austrians inflicted the first defeat on Napoleon at the Battle of Aspern, they failed to take advantage, and Napoleon regrouped and defeated them at the Battle of Wagram. Despite remaining in existence, the monarchy surrendered more territory at the Treaty of Schönbrunn.
In the ensuing years, Austrian foreign policy shifted towards seeking accommodation with Napoleon, arranged by Klemens von Metternich. This included sending troops to take part in Napoleon's invasion of Russia in 1812. However, after Napoleon's defeat in Russia, Austria formally declared war on France in August 1813 and assumed a leading role in the War of Liberation, providing the largest number of troops to the allied forces. Metternich's goal was to establish a balance of power among the great European states, distrusting the ambitions of both Russia and France. Ultimately, Austria participated in Napoleon's defeat and exile to Elba in 1814.
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Austria's foreign policy after 1763
Maria Theresa's foreign policy after 1763 was marked by her acceptance of the loss of Silesia. This shift in foreign policy, along with the urgent need for financial recovery from the Seven Years' War, led to a focus on domestic affairs during her reign. However, some foreign matters still required attention, particularly regarding territorial gain and the threat of renewed warfare.
One significant foreign policy challenge emerged in 1768 with the Russo-Turkish war. The possibility arose that Russia might not only defeat but also replace the decaying Ottoman Empire as the Habsburg neighbour in the southeast. This prospect was deeply concerning to the Habsburgs, who were willing to go to great lengths to prevent it. By 1771, Kaunitz, an adviser to Maria Theresa, recommended forming an alliance with the Turks to counter the Russians. However, Maria Theresa resisted this idea due to her negative perception of the Turks as "infidel predators" in Europe.
During this period, Austria also dealt with the issue of serf revolts in Bohemia in 1774. In response, Maria Theresa issued a law restricting the aristocratic exploitation of the work obligations of the peasantry. She also introduced plans to change the dues of the peasantry from various forms of service to a strictly rent-paying system on crown-owned lands, although this was not extended to privately held lands.
In terms of economic policy, some important sectors, such as textiles and iron making, were freed from guild restrictions. Additionally, a customs union was created in 1775, encompassing most of the crown lands while excluding peripheral lands and the kingdom of Hungary, which later joined in 1851. This shift marked a departure from the mercantilist policy of previous reigns, influenced by physiocratic and populationist theories.
Overall, Maria Theresa's foreign policy after 1763 was characterised by a focus on domestic affairs, managing the financial fallout of the Seven Years' War, and navigating complex foreign relations, particularly regarding territorial concerns and the threat of renewed warfare.
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Financial and economic reforms
Austria has a history of implementing financial and economic reforms, with the country's economic landscape continuing to evolve. Here are some key aspects of Austria's financial and economic reforms:
Historical Context
Historically, Austria has undergone significant financial and economic reforms, particularly during the reign of Maria Theresa in the mid-18th century. Maria Theresa focused on military and financial reforms, aiming to strengthen the Habsburg monarchy and its defence capabilities. She proposed establishing a standing army and encouraged the nobility to serve in the officer corps. These military reforms were accompanied by financial reforms, including negotiating fixed tax contributions from the crown lands over a decade, centralising the government, and implementing administrative changes.
Post-World War II Reforms
Following World War II, Austria faced high inflation and economic challenges. A radical currency reform was introduced in the early 1920s, including the introduction of the schilling as a new currency, which helped stabilise the economy. However, the worldwide depression in the early 1930s and the country's annexation by Nazi Germany in 1938 further impacted Austria's economy.
EU Membership and Agricultural Reforms
Austria's membership in the European Union (EU) in 1995 brought substantial reforms to the agricultural sector under the Common Agricultural Policy (CAP). While Austrian farmers provide most of the country's domestic food requirements, the agricultural contribution to gross domestic product (GDP) has declined over time.
Tax Reforms
Austria has recently proposed tax reform packages to enhance its competitiveness and attractiveness for businesses. These reforms include reducing the corporate income tax rate, flattening the income tax system, and preventing bracket creep. The country aims to decrease the tax burden and encourage economic growth while adhering to EU regulations.
Privatisation and Nationalisation
Austria has a history of nationalising and privatising state-owned firms. In the early post-war period, many large firms were nationalised to protect them from Soviet takeover. However, starting in the 1990s, many of these firms were privatised and operated as private businesses. The government still retains control over some firms, state monopolies, utilities, and services.
M&A Activity
The financial and industrial sectors in Austria are vibrant and demonstrate potential for growth. Companies in these sectors explore mergers and acquisitions (M&A) to strengthen their market positions, expand their portfolios, and enhance their capabilities. The Industrials sector, including manufacturing, engineering, construction, and transportation, leads in the number of M&A transactions.
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Frequently asked questions
Maria Theresa's focus during this period was on internal reform. She started with military reform, proposing the establishment of an effective standing army of 110,000 men—60,000 more than in her father’s day. She also encouraged the nobility to take a greater interest in serving in the officer corps, creating a school for officers and introducing military orders as rewards for good service. Maria Theresa also reformed the financial system, basing it on the contributions offered by each of the monarchy’s crown lands, or provinces.
Maria Theresa's foreign policy changed after 1763 when she reconciled herself to the loss of Silesia. She and her advisers focused on domestic affairs, including financial reform. In 1775, the government created a customs union out of most of the crown lands of the monarchy. In the same year, in response to a serf revolt, Maria Theresa restricted the aristocratic practice of exploiting the work obligations of the peasantry. She also introduced a system of public education.
Hitler wanted a united German nation-state that incorporated Austria. He wanted to get rid of Prussia and create a single German entity. He viewed Austria-Hungary as weak and despised the multiculturalism of the Habsburg Empire. He also believed that Austria had sabotaged every German national idea throughout history.
