By the Ausgleich or Compromise of 1867, which created the Dual Monarchy of Austria-Hungary, Francis Joseph restored Hungary's autonomy within the Empire, in return for recognition of his right to conduct foreign and military policy virtually untrammelled. An essential safeguard of the settlement was the granting of constitutional rule to the Austrian' half of the Monarchy. Austria and Hungary existed henceforth as separate entities, each with its own government and parliament and conjoined at the top by the emperor-king and his three 'common' ministers for foreign affairs, war and finance. The whole point of the Ausgleich was to enable the Monarchy to continue functioning as a great power; yet from the start certain built-in handicaps became apparent.
Constitutional government meant that in theory there were no holds barred on the sort of progressive, liberal reforms associated with modernisation, and indeed the period after 1867 saw a steady lifting of economic and legal restrictions in both Austria and Hungary. 'Constitutional', however, did not mean 'democratic'. Francis Joseph's initial assumption was that government would rest on what he regarded as the two 'historic' peoples of the Monarchy, Germans in Austria and Hungarian nobles in Hungary, whose dominance would be ensured by a property-based suffrage. The problem with this was that Germans and Hungarians were minorities in their respective halves, and for the nine other peoples in the Monarchy such a situation was unsatisfactory to say the least. The Dualist period thus became a byword for nationality disputes, which dominated domestic politics and impinged on foreign policy.
In Austria the situation proved more fluid, in that there was a gradual expansion of the political space, an erosion of the early German dominance, the co-opting of non-German minorities into government and at least some attempts made to remedy the grievances of other nationalities. In Hungary, by contrast, matters remained frozen, with the Hungarian gentry maintaining an iron control over the political system and incalculably exacerbating minority
Map 6 The Habsburg Monarchy 1867-1918
Source;Taylor, A.J. P., 1964, TheHabsburgMonarchy1809-1918:AHistoryoftheAustrianEmpireandAustria-Hungary, Harmondsworth Penguin Books/University of Chicago Press, 128. © A. J.P. Taylor, 1964.
Discontent. The occupation of Bosnia—Hercegovina, in the late 1870s, added an especially volatile element to an already explosive mixture.
The traditional distinction between 'historic' and 'non-historic' peoples has little applicability here; rather we should speak of privileged and nonprivileged. Yet ironically even the ostensibly privileged peoples could see themselves as underdogs: Germans proved irreconcilable to their relative loss of hegemony in Austria, while Hungarian nationalists continued to see themselves as the victims of Habsburg oppression, despite their obvious ascendancy in Hungary. On top of this, nationality problems affected the Monarchy's international position; this was a state where foreign and domestic policy were inextricably interlinked. The possession of Bosnia—Hercegovina was the paradigm of this fatal symbiosis: undertaken to solve one nationality problem, it worsened it to the point of the Monarchy's own destruction.
The Monarchy throughout this period wrestled with 'centrifugal' forces which could conceivably pull it apart and against which the traditionally 'centripetal' counterweight of Habsburgtreue, the loyalty to the dynasty of Church, aristocracy, army and bureaucracy, seemed often ineffective. Yet few among the Monarchy's nationalities sought more than greater autonomy within the state. Right down to the end many subjects proved capable of multiple loyalties, simultaneously identifying with their national community while also retaining a clear residual loyalty to the dynasty.1 Others, the so-called 'amphibians', showed no sense of commitment to either one of the national loyalties competing for their allegiance and, especially in areas where ethnicities were mixed, remained stubbornly bilingual and resistant to the very idea of national identity.2 It took the cataclysm of a world war to shake these loyalties or to budge some people from 'national indifference'. Nevertheless the fact remains that, while a sense of collective identity was possible, and was assiduously promoted by the imperial authorities, it remained 'fragile'.3 As Maureen Healy concludes, the Monarchy 'had not generated a patriotism that allowed fellow citizens to feel a connectedness among themselves'.4