ABSTRACT
This chapter demonstrates how Germany retained the political hallmarks of the old monarchical structures, despite developing a strong industrial economy in which the working class expanded. The Habsburg monarchy was weakened by its defeat at German hands in 1866 and its exclusion from German affairs. Bismarck aimed to ensure that the Reich was effectively a Greater Prussia and that the powers of the old aristocratic elites, on which his own authority also depended, were preserved. Though Bismarck persuaded Wilhelm I to preserve the Habsburg Empire, recognising that Germany would need a strong ally in the future, the rising tide of nationalism within the multinational empire began to unpick the bonds which united the Habsburg lands. Two factors militated against the preservation of Bismarcks alliance system: the conflicting aspirations of Austria-Hungary and Russia over the Balkans grew increasingly incompatible on any terms; and the new German government after 1890 consciously abandoned Bismarcks policy of cautious peace in favour of imperial glory.
