Vienna Palace
Franz asked in surprise, “France and Russia are drawing closer?”
He was not surprised that France and Russia might move closer; what startled him was that it was happening earlier than expected.
The agricultural crisis was still brewing, but it had not yet fully erupted. People only start acting desperately when the situation becomes truly dire.
It was still too early for that. The French large-scale agricultural development plan was nothing more than a proposal on paper. The British food self-sufficiency plan hadn’t even finalized where the grain would be grown.
Even if these plans were to impact international grain prices, that would only happen once the crops were actually produced.
Essential goods like grain are not like futures or stocks, where people speculate on future trends.
Whether the outlook is positive or negative, demand in the market never disappears. Before overproduction of grain actually occurs, even if there is turbulence in the international grain market, nothing drastic will change.
At the very least, unless the major grain-exporting countries abandon the agreement on unified grain prices, there could not be any major shift in the global grain trade.
Foreign Minister Wessenberg added, “Your Majesty, the Russian government had no other choice.
Even if, after the agricultural crisis breaks out, others may be able to solve the problem by expanding domestic demand, the Russian government is under enormous debt pressure.
The Russian Empire also suffers from a severe shortage of foreign currency reserves. If they lose this source of revenue from grain exports, their financial system will collapse very quickly.
If the French are willing to let Russian grain into their domestic market, the Russian government has no way to refuse.”
There was no other choice. No matter how much they tried to increase revenue or cut spending, debts still had to be repaid, and they could only choose between paying in foreign currency or gold. The ruble was practically worthless on the international currency market.
Since the Russian government had to come up with a large amount of foreign currency every year to service its debts, it naturally had to make every effort to earn foreign currency. Otherwise, it would have to fill the gap with massive amounts of gold.
If there was a shortage of foreign currency and gold started flowing out of the country in large quantities, the value of the ruble would collapse. Once a country’s currency loses its credibility, its financial system is inevitably doomed.
The Russian government had experienced this hardship firsthand, and could even be said to be quite seasoned in it. Every financial collapse was accompanied by a government bankruptcy.
What seemed like an effective way to default on debts actually had endless consequences. Being isolated and excluded by the international community was one thing, but what about secured loans?
They couldn’t just default on debts owed to both the Nordic Federation and Austria at the same time, refuse to honor the loan collateral agreements they had signed, and go to war with both countries to wipe out the debt.
The Russian government certainly wouldn’t be opposed to such shameless tactics. In the face of profit, allies had never meant much. But the real problem now was that they couldn’t win a two-against-one fight.
In this era of the strong preying on the weak, only the victors on the battlefield could afford to default. There was no such thing as a defeated party refusing to pay up.
Since defaulting wasn’t an option, the only path left was to find ways to raise money.
The French had offered tangible benefits. Even though it was likely a poisoned bait, the Russian government had no way to turn it down.
Franz nodded slightly and said slowly, “It seems we all underestimated the French. Perhaps the French government’s large-scale agricultural development plan is just a smokescreen.
France is already the largest grain-producing area in Western Europe. If it weren’t for the annexation of the Italian territories, they wouldn’t be lacking in grain at all.
These farmers are the foundation of House Bonaparte. As long as Napoleon IV hasn’t lost his mind, he would never harm their interests.
Politically speaking, France has already decided that its grain prices will remain at a relatively high level in order to protect the interests of the farming class.
The French large-scale agricultural development plan may reduce dependence on foreign grain, but that doesn’t mean they intend to achieve complete self-sufficiency.
Once they become fully self-sufficient, grain prices would inevitably drop under the influence of interest groups, making it difficult to safeguard the farmers’ benefits.
Only by maintaining a certain shortfall and importing grain from overseas can they justify keeping prices high, with a rationale that all parties can accept.
Drawing in the Russians may have been part of their plan from the beginning. Our lack of intervention only accelerated the development of the situation.
So then, how is the Ministry of Foreign Affairs planning to respond?”
The facts were clear. Whether the French had planned it all in advance or were adapting on the fly, the outcome was now moving in a direction that favored France.
Without harming the interests of domestic farmers, the large-scale agricultural development plan not only reduces the outflow of foreign exchange but also helps promote the development of the domestic grain processing industry.
As the Industrial Revolution has progressed to its current stage, the mainstream economic sectors essentially fall into a few categories: light industry, led by the textile industry and agricultural product processing; traditional heavy industry, including shipbuilding, steel metallurgy, and mining; followed by transportation; and lastly, the emerging electric power industry. As for the automobile and internal combustion engine sectors, they are still in their infancy and account for a very small share of the overall economy.
France still has a solid foundation. Its industrial chain is more or less complete, with the only regret being the lack of a leading industry.
The British dominate finance, textiles, and shipbuilding, and also hold a significant position in mining and steel metallurgy.
Austria holds the dominant position in agricultural product processing, electric power, and transportation. In mining and metallurgy, Austria has even surpassed Britain by a slight margin to become the industry leader.
France, however, is in a tough spot. It lacks a flagship industry among the key sectors and gives the impression of being uniformly mediocre.
As for heavy industry, the natural resource limitations have already made it difficult for the French to achieve much. Ranking third in the world is already quite an accomplishment.
The government has prioritized developing the textile industry, but in international competition, it has been thoroughly beaten by the British. Though the French textile sector appears large, its overall output is actually less than that of Austria, which has been quietly building its strength.
Meanwhile, France’s transportation sector has developed quite well. Since the days of Napoleon III, large-scale railway construction has been underway. Unfortunately, the other industries have failed to keep up.
Capitalists invest with returns in mind. If there’s no prospect of profit for a long time, even newly built railways will be mercilessly abandoned.
Frankly speaking, France has done quite well in developing its emerging industries, but its natural limitations are significant.
Take the electric power industry, for example. France was an early entrant into the field. Unfortunately, it lacks coal and is heavily reliant on overseas imports, making electricity generation too costly and limiting its widespread adoption.
In the real economy, it’s hard for any one sector to dominate entirely. Even if a country can’t become the industry leader, being second place is still a very comfortable position.
Now, this large-scale agricultural development plan may appear to be purely about achieving grain self-sufficiency, relying solely on agriculture.
But in reality, due to tariff barriers, domestic agricultural processing companies enjoy an advantage in tax-related costs. Once grain production capacity increases, these enterprises will naturally expand.
While boosting domestic economic development, this also hits competitors hard. In that sense, the large-scale agricultural development plan offers countless benefits to France with virtually no downside.
Foreign Minister Wessenberg responded, “We currently have no way to sabotage France’s large-scale development plan.
But we absolutely cannot let them succeed in drawing in Russia. The Ministry of Foreign Affairs is actively looking for a suitable opportunity to intervene and disrupt the growing closeness between France and Russia.”
To say there’s no concern would be a lie.
Either France or Russia alone has obvious weaknesses, and Austria can deal with them comfortably. But if the two join forces, the situation changes entirely.
Franz certainly hadn’t forgotten that across the Channel, there was still the troublemaker John Bull. In the original timeline, it was only after John Bull joined the Entente that the First World War was truly ignited.
In a sense, if it weren’t for this unreliable ally dragging down his teammates, the Russians wouldn’t have collapsed so quickly.
Had material aid arrived in time and the Russian government not fallen so early, the German Empire wouldn’t have lasted as long either and the United States wouldn’t have had any part in the First World War.
“It’s hard to prevent this. The French are offering tangible benefits by opening up their domestic market, and that’s not something the Russian government can easily turn down.
If we want to stop them from getting closer, we’ll also have to make sacrifices. Even factoring in political influence, we can’t offer significantly less than the French.
Unlike the French, they can afford to mess around recklessly. If they succeed, they gain big; if they fail, they’ve at least caused us trouble.
If this keeps happening, we might not be able to take it. Over time, even if the French don’t manage to suppress the Russians, they’ll have already inflated Russia’s appetite.
Unless we can strike a decisive blow, dragging this out will not work in our favor.”
That was the real dilemma. The French were purely stirring the pot. For them, whether they succeeded or failed, things wouldn’t be any worse than they already were.
In contrast, Austria couldn’t keep playing this game forever. If it dragged on too long, it would give the Russians the illusion that Austria couldn’t live without them.
* * *
TN: The raw for the title is basically this: https://www.chinesefoodwiki.org/Niupi_Candy but the meaning should be something or someone that’s annoyingly clingy, hard to get rid of, or persistently entangled—like sticky taffy or gum you can’t shake off. *** https://postimg.cc/gallery/PwXsBkC (Maps of the current territories of the countries in this novel made by ScH)
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