Ausgleich

Perhaps you have heard or read about Austria-Hungary, sometimes called the Dual Monarchy. This behemoth of an empire was a major force in European politics until its breakup after World War One. But why a Dual Monarchy? Why was an empire under the rule of the Austrian Habsburgs not simply called the Austrian Empire? Due to the Ausgleich Compromise of 1867. Learn about its origins and significance here.

Ausgleich Definition

The word Ausgleich's definition is "compromise" in German. The creation of the Dual Monarchy arose out of a compromise between the Austrian Habsburgs and the political leaders of Hungary, who desired independence.

Ausgleich Summary

The Ausgleich Compromise of 1867, signed on February 8, 1867, essentially gave the Kingdom of Hungary equal status with Austria. Hungary would have its own parliament and near complete autonomy over its internal affairs.

However, the Habsburg Emperor was still considered both the Austrian Emperor and the King of Hungary, hence the nickname of the Dual Monarchy. Austria-Hungary was also considered one entity for foreign relations and, significantly, war.

It was a unique arrangement, and one that perhaps foreshadowed the fall of the empire just over 50 years later. You've learned briefly about it in this Ausgleich summary, learn more details in the sections that follow.

Fig 1 - Map of Europe in 1867, showing Austria-Hungary as the Dual Monarchy as a result of the Ausgleich Compromise of 1867.

Background to the Ausgleich

The Ausgleich was influenced by the growing forces of nationalism as well as events in Prussia. These events challenged Austrian Habsburg rule in Hungary and set the stage for the Ausgleich Compromise of 1867.

Origin of the Austrian Rule of Hungary

Hungary was an independent kingdom of Hungary and Bohemia in the late Middle Ages. In 1526, King Louis II of Hungary and Bohemia died in battle against invading forces from the Ottoman Empire.

With no clear heir, his brother-in-law Ferdinand I was elected King of Hungary by the parliament.

Ferdinand was a Habsburg, the hereditary dynasty that had a large empire in and around Austria and usually held the position of Holy Roman Emperor in the Germanic states. Meanwhile, the main ethnic group in Hungary, including most of the ruling class were Magyars.

From 1526 onward, the Habsburg monarch also served as King of Hungary.

One key distinguishing factor for Hungary compared to other Habsburg lands was the fact that Hungary had a constitution that dated to before Habsburg rule that established limits on the power of the monarchy. The Habsburg monarchs traditionally abided by this constitution, and Hungary was governed separately from other Habsburg lands.

However, in 1804, Holy Roman Emperor Francis II declared the founding of the Austrian Empire, which would include all Habsburg lands, among them Hungary.

Hungary now had a strange status.

It was formally part of the Austrian Empire, but its constitution also prohibited it from being part of another state. It maintained its own legal and judicial systems and technically, its Diet, or parliament, still held sovereignty to act separately from Austria.

The 1848 Hungarian Revolution

This arrangement raises the question of why a compromise was needed in 1867, if for most practical purposes a similar situation was already in place. The 1848 led to a change in status of Hungary.

Demands for Reform

Like in much of Europe, the year 1848 brought unrest to the Habsburg Empire. The spread of the ideas of liberalism and nationalism and reaction against the conservative rule established by the Congress of Vienna and the so-called Age of Metternich prompted the outbreak of the Revolutions of 1848.

Within Hungary, a reformist and opposition liberal movement had been growing for two decades. As news of revolution in Paris reached Austria and Hungary, demands for democratic parliamentary government broke out. Protestors took to the streets in Vienna, Buda, and Pest.

Fig 2 - Liberal and nationalist reformer Lasos Kossuth gives a speech in favor of democratic reforms and independence for Hungary in 1848.

Rollback and War

At first, the Habsburgs were forced to accept demands for reform. Hungarian reformers created a more or less independent democracy.

However, by December 1848, a new Habsburg Emperor, Franz Josef, had come to power and sought to crush the forces of liberalism and nationalism. That included bringing Hungary firmly back into the fold by force. Hungarian rebels tried to resist, but with aid from the Russian military, the Austrian army defeated them.

Hungary was had its old privileges of autonomy revoked in favor of centralized Austrian rule and absolutism. German became the sole language of official government business.

However, Anti-Habsburg sentiment remained strong in Hungary. In fact, Franz Josef was not formally crowned as King of Hungary until after the Ausgleich, which came about as a result of Austrian misfortune on the battlefield elsewhere.

Fig 3 - Painting of fighting during the Hungarian Revolution of 1848, an important precursor to the Austro-Hungarian Compromise of 1867.

Austria's Decline: The Impetus for the Austro-Hungarian Compromise

Despite the suppression of the Hungarian revolt and the re-imposition of absolutism throughout the Habsburg Empire, its long decline had begun.

Subsequent fighting in the Crimean War strained the empire's budget, and a lack of cooperation from Hungary and other minorities in the empire made it difficult for the military to be effective.

In the 1866 Austro-Prussian War, Prussia, who had emerged as a major rival, handed the Austrian Empire another disastrous defeat. These wars drove the empire into financial crisis, on the verge of bankruptcy.

Hungarian nationalists saw their chance to push for concessions and a return to their autonomous status.

The Ausgleich Compromise of 1867

Hungarian leaders met with the Austrian imperial court to discuss Hungary's status in the empire.

The compromise they reached, called the Ausgleich Compromise of 1867, or just the Ausleich for short, restored Hungary as an independent state.

It created the so-called Dual-Monarchy, where Franz Josef I ruled as Emperor of Austria and King of Hungary.

Fig 4 - Painting depicting the coronation of Franz Josef as King of Hungary, establishing the Dual Monarchy.

Beneath the emperor, Hungary and Austria would maintain separate governments, each with their own legislative body and prime minister.

Hungary had its old constitution restored, and it maintained its own laws and legal system. There was no common parliament, and Austria and Hungary were separate legal entities.

However, the two states remained unified as the Austro-Hungarian Empire for matters of foreign policy. A common Ministry of Finance was also created, but it only dealt with military expenditures and the issuing of a common currency. However, each state was largely financially independent of the other.

Ausgleich Significance

The Ausgleich Compromise had a significant effect on the Austro-Hungarian Empire. It established the structure the Dual Monarchy would have until its collapse.

It also contributed to the growing force of nationalism among the different ethnic minorities in the empire, causing disability.

The Ausgleich and special status granted to Hungary emboldened other national groups to make their own demands concerning autonomy within the empire. This especially became the case for Serbs living in Austria-Hungary who wished to join the new nation-state of Serbia, which gained independence from the Ottoman Empire in 1878.

Fig 5 - A map showing the different ethnic groups in Austria-Hungary.

Another significant issue created by the Austro-Hungarian Compromise was the status of the military. Hungarian nationalists often opposed increases to the military budget on the grounds it would only serve to increase Austrian power at the expense of Hungary. Such political disagreements stunted the growth and modernization of the Empire’s armed forces, and the empire had only a fraction of the military budget of the other major European Great Powers.

When World War I broke out in 1914, due in large part to Serb nationalism within the empire, the stagnation of the empire's military would play a key role in its poor fortunes, culminating in their defeat and dissolution.