Holy Roman Empire - Chapter 110:
Chapter 110: Chapter 110, War Reparations
Translator: 549690339
Vienna International Hotel
Palmerston argued, “Mr. Metternich, your demands are too high; they have surpassed the Kingdom of Sardinia’s capacity to pay!”
Metternich replied calmly, “Mr. Palmerston, let us account for the cost of war. In this Ausa war, Austria spent 100 million shields on military expenses and suffered casualties of 12,000 officers and soldiers. Even if no one paid 1,000 shields in pensions, that would still amount to 12 million shields.
Civilian deaths totalled 586,000, with 26,000 of the nobility, including marquises, and over a million people left homeless.
Calculating at 500 shields in pensions for each civilian and 3,000 shields for each noble, the total comes to 371 million shields, and for the homeless population, a conservative estimate for resettlement costs would be at least 150 million shields, right?
Nearly half of the cities in the Lombardy and Venice Area were destroyed in the war, completely collapsing the local economy. The cost of post-war reconstruction will not be less than 300 million shields.
Additionally, the Sardinian Army rampaged and plundered a great wealth from the public, amounting to at least 180 million shields, which must also be returned.
According to Austria’s calculations, the Kingdom of Sardinia would likely be in debt until next century. Palmerston interjected before Metternich could finish, stating:
“Mr. Metternich, one cannot tally the account like this. The majority of casualties and economic losses were caused by the Revolutionaries, and only a small part of such damages was inflicted by the Sardinian Army upon your country.”
Indeed, these losses were the result of the combined actions of the Rebel army, the Austrian Army, and the Sardinian Army, but the Kingdom of Sardinia was being asked to bear them all.
Unfazed, Metternich said, “Mr. Palmerston, we have ample evidence to show that the uprisings in Lombardy and Venice were orchestrated by the Sardinian Government themselves.
The damages caused by the Rebels should naturally be borne by the Kingdom of Sardinia. We are only asking for 1.66 billion shields in damages, which is actually quite modest.”
Palmerston naturally was not going to accept such terms, and he haggled with Metternich item by item.
For example, civilian casualties: the Sardinian Army did not commit a massacre, so how could it be possible that they killed so many civilians in such a short time?
Attributing natural disasters, man-made calamities, and natural deaths to the Sardinian Government might be a stretch but was at least somewhat related.
However, to demand compensation for population outflows caused by war, as if they were deceased, is simply nonsensical, isn’t it?
And compensation for the casualties of Revolutionaries? That’s ridiculous. They’re criminals, and the Austrian Government is supposed to pay pensions to their families?
No, that must be discounted.
Another example: the looting by the Sardinian Army. Their spoils are all in the prisoner-of-war camps, aren’t they? To claim such a high amount of wealth was plundered is just not true; only some wear and tear costs would be applicable.
After half a month of incessant haggling, Palmerston finally reached an agreement with Metternich. The Kingdom of Sardinia would pay Austria 338 million shields in war reparations plus 62 million shields for prisoners of war ransoms, thus ending the war (equivalent to 93.52 million taels of silver).
That was already the limit. The Kingdom of Sardinia had not yet undergone the reforms of Cavour, and their current fiscal revenue, when converted, amounted to just over 10 million taels of silver.
Faced with this enormous indemnity, they were certainly unable to pay. The existence of the France-Austrian Secret Treaty furthermore eliminated any possibility of seeking financial aid from the French financial sector, leaving them with no choice but to borrow from the British.
With John Bull’s scavenging nature, how could he not exploit the situation?
It could be said that after incurring this colossal debt, the political and economic future of the Kingdom of Sardinia would have to be completely dependent on the British.
The opinion of the Sardinian Exile Government was no longer important; they had lost the right to speak and had to accept the arrangements of fate.
Disobedience would simply lead to a change in government. The British had paid a heavy price to save them, hoping to support an obedient pawn in the Italian Area and enhance their influence.
Of course, there was another reason: the British banking consortium was trapped in the loans they extended. The Sardinian Government still owed a large debt to the British, and if measures were not taken to save them, all these loans would go down the drain.
The immense amount of this indemnity was not so much the limit that the Kingdom of Sardinia could endure as it was the limit the British were willing to continue investing.
On July 7, 1848, the Austrian ambassador in London signed a cease-fire treaty with the Sardinian Exile Government in England, the contents of which were the exact replica of this Anglo-Austrian secret negotiation in Vienna, just worded differently.
The British banking consortium provided the Sardinian Government with a loan, paying Austria a one-time war indemnity of 200 million shields, with the remainder to be paid over twenty years at an annual interest of 5%.
The decision to prefer money over territory was made by Franz, and if France, that unreliable ally, hadn’t run into troubles, then everyone could have cooperated in partitioning the Kingdom of Sardinia, and Austria could have gained the rich areas of Genoa and Turin, which would have been worth the effort.
But now, with the French preoccupied with their own problems, Austria could only go into battle alone. Unfortunately, Austria’s appetite was not great enough to swallow the Kingdom of Sardinia whole.
If they could not annihilate the Kingdom of Sardinia, but only occupy part of its territory, then they would have to face the threat of nationalist uprisings for a long time, making it difficult to transform these areas into national strength.
Moreover, there were already enough Italian nationalists within Austria, and Franz did not wish to continue increasing their numbers, as this would not be conducive to the policy of national assimilation he was pursuing.
Austria made concessions on the issue of the Kingdom of Sardinia, and naturally, it received compensation.
For instance: The British would support Austria’s expansion in the Balkan region and tacitly agree to Austria joining the colonial expansion overseas.
Compared to the complex situation in the Italian Area, Austria, with British support for its Balkan expansion, would only need to communicate with Russia.
Overseas colonial expansion was even simpler; as long as the direction of Austria’s colonialism did not conflict with the core interests of England and France, all other issues were minor.
It must be said that Palmerston’s judgment was very accurate; Austria’s strategic focus had long since moved away from the Italian Area.
The dominant force now was the Teuton faction led by Prime Minister Felix, advocating for expansion of influence in the German Region.
Following them was the Near East faction led by Prince Windischgrätz, Minister of the Army, advocating for expansion into the Balkan region.
And then there was the colonial faction headed by Archduke Louis, which advocated for the establishment of Overseas Colonies.
The impact of the butterfly effect was enormous. At this time in history, the Austrian Government would have been busy suppressing uprisings, and certainly not so many people would have been thinking of expanding abroad.
Behind these strategies, there was one or more interest groups pushing. On the surface, everyone had plenty of reasons, but in reality, there were a series of problems when it came to implementation.
Franz did not rush to take a stand, as politics often could not only consider right and wrong, but also had to look at the interest groups involved and the potential changes that could be triggered.
Palmerston’s visit this time was not only about the Italian issue but also included mediating the Prussia-Denmark War, in which Austria also held significant sway.
“Mr. Metternich, I believe that our two countries need to have more in-depth communication regarding the Prussia-Denmark War.
The Kingdom of Prussia’s unilateral initiation of war should be condemned by the international community, and as peace-loving nations, we need to take more proactive measures,” Palmerston said.
“Of course, Mr. Palmerston. The Austrian Government had clarified its position:
Schleswig and Holstein are traditional German Confederation states, and Austria hopes they will return to the Federation.
However, they must come back as independent Sub-States, not as parts of the Kingdom of Prussia,” Metternich tentatively replied.
Palmerston said seriously, “Mr. Metternich, Schleswig and Holstein now belong to the Kingdom of Denmark; this is a historical issue.
The German Region is just a geographical name, not a state. The German Federation is merely an alliance and does not possess what you call sovereignty!”
It was without a doubt that the British were opposed to the unification of the German Region. Once a unified great empire appeared on the Central European continent, then the hegemonic position of the Great Britain Empire would be challenged again.
Palmerston explicitly stated his position to cut off any illusions Austria might have had about unifying the German Region.
Metternich was against the establishment of a Greater Germany. He believed that the unification of the German Region was impossible, and after gauging the attitude of the British, he naturally did not have any extreme reactions.
“Mr. Palmerston, this issue does not depend on what we think, but rather on the public opinion led by the Prussians, and the Austrian Government is now captive to this public opinion.
Having just experienced an internal rebellion, we must consider the feelings of our citizens. In this war, we have no choice but to support the Prussians diplomatically,” Metternich said.
Metternich heavily stressed the word “diplomatically,” and Palmerston naturally understood the implication—Austria did not want Prussia to continue growing stronger, and their support was limited to diplomacy and would not extend to concrete action.
This answer could not fully satisfy him, but it was not unacceptable; Austria was apparently preparing to be a bystander in this Prussia-Denmark War.
Having failed to seek the involvement of the Austrian Government in a unified pressure on Prussia, Palmerston did not linger any longer in Vienna and headed straight for Berlin.