To quell the revolutionary tide, stabilize the situation on the continent, and revitalize the European economy, the European Alliance decided to hold a European Economic Summit in Vienna. Strictly speaking, it could only be called the European Alliance Economic Summit. Only members of the Alliance were in attendance and Britain and France were excluded from the invitation list. No reason was given. They just didn’t want to invite them. Holding a European Economic Summit at this time was a move born of sheer necessity for these nations. After the economic crisis broke out, everyone’s economies were dealt a severe blow, and the more economically developed a country was, the greater the impact. Lacking experience in dealing with crises, the governments had failed to act in time, allowing the crisis to escalate and social conflicts to rise sharply. With the revolutionary tide high, governments rolled out relief measures to stabilize their domestic situations. The plan was very effective. Once people could at least eat their fill, the revolutionary parties’ momentum quickly withered. The only drawback was that it was incredibly expensive. The European Alliance was already home to many poor nations. In the economic crisis, governments’ revenues had plummeted, so having to spend money to provide relief to the unemployed was a true test for everyone’s finances. Excluding the Holy Roman Empire, the Netherlands, Montenegro, Armenia, and the Nordic Federation, every single one of the remaining nations was either already financially bankrupt or on the verge of it. The Holy Roman Empire was a given. It had deep coffers and was the first to take action, stabilizing its domestic economy and getting through the most dangerous period. Meanwhile, Montenegro and Armenia were agricultural nations. If handicrafts counted as industry, their industrial output would probably only account for five or six percent of their national economies. A country with that kind of economic structure simply wasn’t developed enough to experience an economic crisis. Although the Netherlands and the Nordic Federation didn’t participate in the European War, they certainly benefited from it. They had just made a fortune from the war, and their own coffers weren’t shallow. The governments just had to be frugal in other areas and tighten their belts. The rest of the nations were struggling. The Russian government had never been wealthy, and the money it made from the European War wasn’t enough to fill the holes left by the Anglo-Russian War. Now, after suppressing several waves of domestic revolution, their treasury was completely empty. Even though Portugal was a member of the colonial empires, government corruption turned their colonies, which should have created wealth, into money-losing ventures. Everyone knows that once bureaucracy is unchecked, no amount of revenue is enough to sustain their profligate spending, so it wasn’t surprising that the Portuguese government went bankrupt. As for Spain, Belgium, and the seven Italian states, they were victims of the war, while Switzerland had simply overeaten and gotten indigestion. Greece, on the other hand, was a nation that could drive its creditors insane. Since gaining independence in 1832, they had experienced over a dozen financial crises, averaging one every 3-5 years. Bankruptcy was definitely a familiar state for them. Of course, this was partly due to Britain and France being particularly ruthless creditors. If everyone were as conscientious as Franz, the chances of financial bankruptcy would probably be much lower. To date, ten countries on the European continent, including Greece, Belgium, Switzerland, Portugal, and Sardinia, have already declared bankruptcy. Three more—the Papal States, Spain, and Russia—are on the verge of it. Without a doubt, this kind of large-scale collective bankruptcy was not normal. Just a short while ago, the Austrian government had provided loans to everyone, so no matter how difficult their finances were, they shouldn’t have collapsed so quickly. There’s no need to dig into the truth as anyone who’s good at history understands. Since geopolitics had determined a pro-Austrian stance for the European nations, a Britain that was being squeezed out would naturally not press a warm face against a cold butt, and diplomatic relations cooled. After the economic crisis broke out, European countries experienced financial crises one after another, and the British bankers naturally wouldn’t let this opportunity to “take advantage of the fire to loot” pass them by. Greed blinds people. Taking advantage of the situation was fine, but the problem was that in the face of profit, the bankers failed to adjust their mindset in time, still reveling in Britain’s past glory. With the birth of the European Alliance, Britain’s influence on the European continent had been weakened to a historic low. Of course, Britain was still an impressive and arrogant power, and no one would dare to pull a tiger’s whiskers. However, as the economic situation continued to worsen and the revolutionary tide surged, the brutal reality of empty pockets finally outweighed their fear of the British. They certainly didn’t dare to outright default, but they were bold enough to find an excuse to postpone debt repayment. After all, the British government didn’t give them low-interest loans, and the money they borrowed from commercial banks was all high-interest usury. Now, even if they wanted to pay it back, they couldn’t. There was no shortage of brave warriors in this world. Perhaps his time under house arrest in London, or his perilous escape, had left Victor Emmanuel III with a trauma. Driven mad by financial pressure, he did something ruthless. He first borrowed a massive amount of money from British banks, and as soon as he got it, he immediately declared government bankruptcy and demanded debt restructuring. To share the pressure, Victor Emmanuel III didn’t just do this himself, he also encouraged his neighbors to join in. Franz didn’t know the exact details of how he pulled it off, but the final result was that they succeeded. A few Italian states managed to swindle thirty million pounds from the British. It’s no wonder that six Italian states declared bankruptcy at almost the exact same time. It was clear they had obviously colluded in advance. Since they weren’t bold enough to directly steal the British’s money, they used bankruptcy as an excuse. As for the other participant, the Papal States, they didn’t follow suit with bankruptcy because they had a religious shield. If he was willing to abandon his principles, the Pope could do many things. “Bankruptcy” was too undignified. As the servant of God, everything belonged to God, so the servant’s debt could also be considered God’s debt. That was a little too shameless, so they simply applied the most popular argument from the Middle Ages: “In the eyes of God, usury is the most heinous and detestable crime.” Therefore, if they were truly faithful believers of God, they must lower the interest rate. Faced with such an unreasonable being, most bankers would surely get a massive headache. … These were all Franz’s own speculations based on the information he had. He didn’t have the time to care about the specific details of how it was done. In fact, the Italians had done a great job with their secrecy. If it hadn’t been for the British bankers raising a fuss later, Franz wouldn’t have known about this brilliant maneuver. Fortunately, those guys knew their limits and used bankruptcy as an excuse to demand debt restructuring. An outright default would have been courting death. Not everyone was the Hairy Bear. In this day and age, if you wanted to default on a debt, you first had to see if you were tough enough to take a beating. Otherwise, when people showed up armed to collect, you’d just have to cry on your own. You couldn’t expect anyone to stick their neck out for a cause that was so clearly in the wrong. Politics required a roundabout approach. Someone who insists on direct confrontation wouldn’t last. Regardless, the Italian region remained stable, and Victor Emmanuel III deserved great credit for it. If he hadn’t taken the lead in getting a lump sum from the British, the situation would be even worse. With one person taking the lead, it wasn’t long before others followed suit. Everyone was short on money now, so every penny saved was a win. Even if they were only temporarily borrowing the money and would have to pay it back later, it solved a pressing problem. To reduce their financial expenditures, governments all turned their attention to their monthly debt repayments, declaring bankruptcy one after another, as if they were all going to a fair. Not only were the British bankers swindled, but every single banker who had loaned them money was taken for a ride. The governments were bankrupt, so if the bankers wanted them to honor their debts, they would have to sit down and talk about debt restructuring. For these “bankrupt governments,” it didn’t matter if an agreement was reached or not. If they reached an agreement, it meant they could save money on debt expenses, or at the very least, they could postpone payments. If they couldn’t reach an agreement, they would just keep playing dead. The ones who owed the money were in no hurry, and even if there was collateral, it couldn’t be liquidated in the current climate. While the bankrupt nations were being shameless, the non-bankrupt ones weren’t doing much better. It wasn’t that they didn’t want to go bankrupt, it was that they couldn’t. For example, Spain is currently fighting a war against the Japanese. What kind of statement would it make to declare government bankruptcy? It would be a heavy blow to their own morale. Or take the Russian Empire, for instance. The Russian government has gone bankrupt several times in recent years and was blacklisted by capitalists long ago. Now their biggest creditor is the Holy Roman Empire. The loan isn’t even high-interest usury, and considering the good relations between the two countries, even if the Russian government wanted to welch, they wouldn’t have the decency to do so. With everyone having learned to be shameless, without a shred of integrity, Franz could only lament the moral decay and the decline of public decency. If things continued this way, everything would be over. This is why, as soon as the Austrian government announced its plan to create three million jobs to help its allies solve their unemployment problems, everyone else came crowding in. The Holy Roman Empire was the leader of the continent. As the leading force in the European world, it would be a failure of statesmanship to only look after its own allies. If the rest of the continent fell into chaos, could the leader truly come out ahead? Therefore, to solve the problem, they couldn’t be limited to a single region. The assistance had to be for everyone. Only when everyone was doing well was it truly good. The mere fact that the European Economic Summit was being held in Vienna showed that Franz had been persuaded by everyone else. After all, who could resist his strong internationalist spirit? “Have you calculated the cost?” Franz asked. Even “international spirit” needed money to back it up. In the era of the gold standard, no one dared to even dream of the “good old days” when they could just print money. Even though the Holy Roman Empire was the world’s largest gold producer and had the largest economy, Franz wouldn’t dare to print banknotes recklessly. Chancellor Karl shook his head and said, “The data provided by foreign governments and the information gathered by our intelligence agencies have serious discrepancies. For now, it’s not clear whether our intelligence is biased or if the foreign officials are concealing the crisis. Beyond that, there are many uncertain factors, such as when the Japanese-Spanish War will end, whether the revolutionary wave will rise again, and so on. These unpredictable events could all increase the cost of the bailout. According to the most optimistic estimate, we need to raise at least eight hundred million guilders to get through this economic crisis. If things go poorly, it could cost as much as 1.2 billion. Our domestic projects, including the circular railway project and its supporting infrastructure, will cost 270 million guilders. With other smaller projects, we’ll need around 400 million to stimulate the domestic economy. The three-million-job plan, though paid for by the noble lords, will still require the government to invest 120 million guilders for policy subsidies, personnel training, management, and travel expenses. Then there’s the financial loans…” Listening to the Chancellor’s report, Franz’s brows furrowed even more. “Optimistic” was out of the question. Franz knew better than anyone what kind of creatures officials were. Deceiving their superiors and concealing from their subordinates was their basic skill set. If the administration were clean, any concealment would be within a manageable range, but if the corruption was severe and the bureaucracy rotten, then they were all screwed. Not only could they hide a crisis, but they could also create an even bigger one. This was commonly known as “officials forcing the people to rebel,” and most uprisings were to these officials’ credit. Unfortunately, the European Alliance had exactly these kinds of corrupt empires with Spain and Portugal at the forefront. Every year, they plundered vast amounts of wealth from their colonies, yet their domestic economies were still a complete mess. It was clear at a glance that they were displaying all the signs of a dynasty’s final years. As for the Russian Empire, it hadn’t reached that point yet. Having gone through the reforms of Alexander II, the Russian Empire in the era of Alexander III was still getting by. In Franz’s opinion, the biggest unpredictable factor wasn’t the distant Japanese-Spanish War but the potential for revolution in Spain and Portugal, as well as the struggling defeated nation of France. They were all ticking time bombs that could explode at any moment. One wrong step, and Western Europe could turn upside down. That’s why, even though France was not invited to the economic summit, the Austrian government had still set aside one hundred million guilders in bailout funds for them. Individually, the funding gap for each country didn’t seem huge, but there were a lot of members in the European Alliance, and when combined, it was an astronomical sum. The purchasing power of the guilder was excellent in this era, and “1.2 billion guilders” was equivalent to the total revenue of all European nations during their peak for two years. Such a massive sum would be a huge burden for anyone. But there was no other way. A major war had just ended on the European continent. Even though two years had passed, the major participants hadn’t emerged from the shadow of the war. This included the Austrian government, which couldn’t even achieve a balanced budget right now. In a sense, this European Economic Summit was forced into being by a lack of money. Now that the capital markets had deteriorated, governments were facing a difficult time getting financing and had no choice but to turn to the Austrian government. It was somewhat similar to the original timeline’s economic crisis, where everyone had trouble getting financing, yet the US government’s bonds still sold well. Even with Uncle Sam’s crazy printing spree, the US dollar still performed strongly in the capital markets. The current situation was similar. The Holy Roman Empire could play a role similar to the US. While it wasn’t the sole world hegemon, the Guilder had become a primary settlement currency for European nations, on par with gold. In this context, the Austrian government, with its deep coffers and abundant collateral, naturally had excellent credit in the capital markets. For example, in the Russian capital market, government bonds issued by Austria sold better than those issued by the Russian government. Even though the interest on Holy Roman Empire bonds was a third lower than the Russian government’s, it still couldn’t deter the enthusiasm of the Russian people. If it weren’t for Britain, the maritime hegemon, watching covetously, Franz could have also lived that beautiful life of “print, print, print.” The era was different, so printing as much as Uncle Sam was impossible, but over-printing by 100 to 200 million shouldn’t be too much, right? In fact, the guilder had already been over-issued for some time. They still didn’t dare to add several hundred million all at once, but adding a few million every year was standard. This small amount of “water” was like scattering it in the sun, it would dry up instantly. Even professionals would have a hard time noticing and putting it into the capital market certainly wouldn’t cause a stir.
*** https://postimg.cc/gallery/PwXsBkC (Maps of the current territories of the countries in this novel made by ScH)
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