In order to help the smaller allies restore their economies, an Austrian version of the “Marshall Plan” was introduced. Its core purpose was to revive the European economy and seize product markets, the only difference being that its content was slightly altered. At this moment, Austria was far from being as wealthy as the Americans after the Second World War. The Austrian government could not provide enormous financial aid in the short term. To supply each country with funds for postwar reconstruction, they had no choice but to rely on financial markets for financing, so interest payments were inevitable. Before the outbreak of the Continental War, Europe’s four major financial centers were London, Paris, Vienna, and Frankfurt. As the leader of the financial world, London’s capital market was almost equal to the other three combined. Because of the war, Paris was essentially ruined. Napoleon IV’s counterattack before fleeing dealt the French consortium a crippling blow, and surviving at all was already difficult for them. Austria’s development time was still too short. Franz had placed particular emphasis on the real economy, so most domestic funds flowed into industry, leaving relatively little capital circulating in the financial market. Vienna and Frankfurt became part of Europe’s four major financial centers not because they were especially strong, but because their competitors were simply too weak. If Europe’s financial market circulation were considered as 100%, London alone would occupy 48.7%, with Paris in second place at 19.6% (before the war), followed by Vienna and Frankfurt at 14.1% and 13.7% respectively. Looking further down, the gap was enormous. Milan, in fifth place, did not even reach two percent, and Madrid and St. Petersburg lagged even further behind. This ranking applied not only to continental Europe but to the world as a whole. Any one of the four major financial centers possessed more capital than all of the remaining financial markets combined. Looking at the numbers, it is clear how deep the British foundation truly is. The century-long accumulation of the colonial empire is not something that can be surpassed overnight. Even with Austria fully exerting its siphoning effect, gathering the capital of Central, Southern, Eastern, and Northern Europe, it is still inferior. And this is already after seizing South African gold. Without that, the gap would have been even wider. One must remember that in the original timeline, the London financial market at this very moment held more capital than half of the entire world combined. With such a solid foundation, John Bull endured two world wars, and even into the 21st century London could still compete with New York for the position of the world’s top financial center. Now Austria not only has to finance itself but also help its smaller allies raise funds. A rough estimate shows that without three billion guilders, it cannot be managed. Trying to pull all that from the domestic financial market would completely drain it and might even trigger a stock market crash. Naturally, the Austrian government would never do something so foolish. If it cannot be solved domestically, then the only choice is to look abroad. After all, money has no borders. No matter where the money comes from, money is money, and Franz does not care whether he borrows internally or externally. “You mean the British will use this as leverage to negotiate terms with us?” If one wishes to raise funds on the London financial market, it is impossible to avoid the British government. Despite their constant shouting about “free economy,” for such large-scale international financing, government involvement is always unavoidable. And given John Bull’s character, seizing the opportunity to bargain with Austria is entirely possible. “Yes, Your Majesty!” Chancellor Karl said, “Without harming the economy, the domestic financial market can at most provide half of the funds. Other financial markets combined may contribute only 20–30%. If we were using it solely for ourselves, this amount would be enough. But considering the funding shortfalls of our allies, it is far from sufficient. Right now, not only Belgium and the Italian states are short of money, but Switzerland, Spain, and even the Russians are penniless as well, needing our financial support. If they cannot get funds from us, they may very well turn toward the British, which would be extremely disadvantageous to us.” Franz had personally experienced the “power of money”. Not to mention that these allies had come together in the first place because of interests, even truly close allies could not withstand the offensive of money. The essence of international politics is interest. There is no such thing as betrayal, only insufficient interests. If one talks about loyalty, then one has already lost. In a sense, Austria’s ability to rally so many allies was also the result of using the power of money. The Austrian government had more money than the French government and was more willing to spend, which is why Austria won. There was no helping it. After all, Austria’s allies were all paupers. Even those who had not been poor before the war had become poor now. Belgium and the Italian states need not be mentioned, their poverty was caused by war. Mountainous Switzerland had never been wealthy. To this day it was still accumulating capital for the Industrial Revolution and was not yet the enviable ideal country it would later become. To absorb its newly occupied territories, borrowing money was unavoidable. Spain could only boast of the glory of its ancestors. Since the 19th century, its finances had never been good. Now, in addition to consolidating its gains, it had to go to war with the Japanese in the East Indies. Without money, nothing was possible. The Russians were long-standing hard-up folk. One only needed to open a history book to see that the Russian government had scarcely ever known a time when it was not short of money. The only consolation for Franz was that the anti-French coalition remained fairly stable. They could not be swayed by Britain for a mere scrap of petty profit. Because of geopolitics, Austria had strong leverage over its allies, all except Spain. To play the traitor, one first had to consider whether one could withstand Austrian retaliation. In this regard, continental states were stronger than maritime powers. The comparison was especially harsh for small countries like Belgium and Switzerland. Offending Britain, the maritime hegemon, meant that the Royal Navy could not come ashore. At most one would suffer in overseas trade. But offending Austria, the continental hegemon, might mean outright national extinction. After pondering for a moment, Franz said coldly, “This round of financing is meant to help everyone out of their difficulties. There is no reason for Austria alone to shoulder the burden. Pull the Anti-French Coalition into the negotiations with Britain. We can use the French war indemnity as collateral. All members of the Coalition will jointly guarantee the security of the debt and share responsibility in case of default. If Britain remains uneasy, the Coalition can station no fewer than five hundred thousand troops in France to ensure that the French government fulfills its obligations. At the same time, let it be known that we are preparing to establish a European Customs Union and are considering whether to allow Britain to join. As for the other conditions, weigh them yourselves. As long as they do not harm our core interests, we can discuss them. I trust the British government will make the right choice.” By putting himself in their place, Franz knew that Austria sought the markets of the Coalition just as surely as Britain would covet them. In this context, helping each nation restore its economy would, in truth, benefit everyone. If Britain tried to use loans as leverage, Franz would not hesitate to bring about mutual ruin. He was prepared to push forward a “European Economic Community” ahead of its time and shut Britain out of the continental system. “Lack of funds” at worst would only slow economic recovery. The Coalition was not lacking in food, and as long as the people were fed, there would be no major unrest. But “lack of markets” was another matter altogether. Europe, at this time, was the most powerful consumer region in the world, accounting for over half of Britain’s foreign trade. To suddenly lose such a vast market, there was no quick substitute. India did indeed have great potential, but potential did not mean purchasing power. By the time that market was nurtured, years would have already passed. Without Europe, Britain would in the short term face several million new unemployed, and an economic crisis would be unavoidable. Although there were many contradictions between Britain and Austria, there was not much real hatred. Even when they clashed, it was usually carried out in secret, while relations on the surface remained decent. Franz did not believe the British government would risk a mutually damaging outcome by locking horns with Austria. That simply did not align with the interests of politicians. The same was true for Austria. In terms of potential for development, Austria was clearly far ahead of Britain. To slow down its pace would only waste that advantage. In fact, with each passing day Austria’s advantage grew greater. Especially after the annexation of the German Federation, Austria would experience a qualitative leap. To reach this goal, Franz even used the “occupation of France” as a bargaining chip in negotiations. If debt repayment was to be secured, an occupying force in France was indispensable. Otherwise, if the French government defaulted, they couldn’t possibly launch another war against France. The issue, however, was how many troops would be stationed. “No fewer than five hundred thousand” was out of the question. If so many soldiers were placed in France, not only would the country never recover, the French people would be impoverished just trying to feed them. If military discipline deteriorated, the French government would be left with nothing to do but handle the daily aftermath of the occupiers’ misconduct. The British, if they wanted France to preserve its vitality and hoped for its eventual revival, had no choice but to press for a reduction in the size of the occupying forces. Foreign Minister Wessenberg said, “Your Majesty, other matters can be settled, but when it comes to using French reparations as collateral for financing, I fear the British will not agree. Even if all members of the anti-French coalition were to provide joint guarantees, that could only ensure the French government would not deliberately default. From the present outlook, France will need a very long time to restore its economy. Without recovery, the government will have no money to repay its debts. And when there is no money in the treasury, no one can do anything about it. Not long ago, when the German Federation proposed transferring its claims, the British government demanded that the constituent states of the Federation provide advance guarantees, ensuring that the French could pay reparations before they would accept the transfer. Clearly, the British have already recognized the risks involved. To trick them will not be easy.” As the central figure of the war, no one understood better than the Austrian government what France had lost in the conflict. According to the Draft Treaty for the Handling of France, unless the French miraculously defied reality, a debt default was only a matter of time. If the guarantee was accepted, once France defaulted on its debts, would Britain press them for repayment or let it pass? To press the matter would be to stab the French in the back, pushing them into an abyss and extinguishing any hope of recovery. To let it pass might indeed help the French, but capitalists would never agree to it. Financial syndicates cared nothing for the larger picture. A debt must be repaid. Franz disagreed, “It does not matter. We do not need the British government’s approval, only that of the financial institutions providing us with funds. High risk brings high reward. Raise the interest rate a little higher, and the bankers will not be able to resist. Moreover, we are offering a debt security guarantee. If the French government truly proves unable to repay, the other nations will be bound to assume joint liability. After all, the money lent is not theirs in the first place. So long as the profits are tempting enough and there is a convincing rationale to present to investors, they will not shy away from risk.” Of course, things would not be as simple as Franz made them sound. The condition of “joint liability” required France to be proven incapable of repayment. Even the definition of “incapable” was a pitfall. Repaying in cash was repayment, but settling with goods in lieu was also repayment. And if pushed too far, one could always carve off a piece of French territory and count it against the debt.
*** https://postimg.cc/gallery/PwXsBkC (Maps of the current territories of the countries in this novel made by ScH)
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