When Kaunitz heard the word "Silesia," his pupils constricted.
Silesia is a wound that every Austrian feels deeply.
It was when this wealthy industrial region was taken by Prussia that Austria lost its position as the "leader" of the German states. At the sa ti, Prussia gained respect from all the European nations and formally joined the ranks of the great powers, becoming a strong contender for leadership of the German states.
If any Austrian claid they didn't want to reclaim Silesia, they would imdiately be branded a traitor and thrown into prison.
However, Kaunitz remained calm. Silesia must return to Austria, but now is not the ti.
The radical reforms initiated by His Majesty the Emperor might make Austria stronger in the future, but for now, they have only brought chaos and weakness to the country.
He rembered that during the last War of the Bavarian Succession, Austria had mobilized over 100,000 troops, attempting to reclaim Silesia amidst the chaos. Yet they couldn't even reach Silesia, being stopped by Prussian forces in Saxony, the western gateway to Silesia.
The Austrian and Prussian armies were locked in a stalemate for over a year, consuming enormous amounts of supplies without making any progress on the battlefield. In the end, they had to agree to a truce diated by France and Russia. Austria even had to give back Lower Bavaria, which they had managed to occupy.
It's important to note that this war happened ten years ago when Austria was stronger because the reforms hadn't started yet. Even then, Austria couldn't defeat Prussia, so trying to reclaim Silesia now would be even more impossible.
Kaunitz sighed, smiled, and shook his head. "Austria doesn't need to start a war with Prussia just yet. To be honest with you, General Wurmser's army is already fully prepared, and the Brabant rebellion will soon be quashed. When that happens, the Prussians will have no choice but to retreat to Potsdam. If you can persuade Bavaria to send more troops, the process will be even faster."
Talleyrand smiled in return, raising his glass in a toast. "To General Wurmser and his glorious victory."
However, he silently recalled the Prince's confident prediction that the Austrian army would suffer a major defeat in the Southern Netherlands.
In the coming weeks, he would stay in Vienna, waiting for news of the Austrian army's defeat to arrive, and then he would proceed with the next steps. According to the Prince, Austria would not accept defeat easily and would mobilize all its forces to engage Prussia in a decisive battle.
His mission was to redirect that decisive battle from the Southern Netherlands to Silesia!
At the head of the banquet hall, Joseph II wasn't touching the food in front of him—he had been reduced to eating porridge and soft-cooked fish for almost a year now due to his illness. Instead, he was excitedly discussing the trade agreent with his French nephew. "You're saying that if we sign this trade agreent, France will impose tariffs of less than 5% on Austrian exports of glass, furs, silverware, and musical instrunts?"
Given his recent health, he hadn't been able to speak such a long sentence in a while.
Joseph smiled and nodded. "You forgot linen, Your Majesty."
"Oh, textiles." Joseph II waved his hand and laughed. "I'm not that far gone yet. Austrian textiles can't compete with French goods and probably won't sell in France."
Joseph pretended to think seriously before looking up. "My mother asked to help you as much as possible, and linen is an important product for Austria... How about this: France can reduce tariffs on Austrian linen to zero, including for North Africa and the Caribbean. Austria, in turn, can impose any tariff it wishes on French linen."
Joseph II's sowhat cloudy eyes lit up with a rare hint of joy. "Oh, my dear sister, she is always so generous!"
According to the "Franco-Austrian Trade Agreent" Joseph had just proposed, Austria's most important goods like glass and furs could enter France with minimal tariffs. Additionally, minerals, grains, cotton, and timber from Austria would enjoy toll-free passage through France—an advantage not even French goods had. Currently, goods transported from Lyon to Paris would have to pay tolls at least ten tis along the way.
If this agreent could be implented, it would bring unprecedented prosperity to Austrian exports.
Based on his experience, Joseph II estimated that this could increase export revenue by 30% to 40%, significantly boosting Austria's finances!
This would provide crucial support for his challenging reforms.
However, as the Holy Roman Emperor, Joseph II knew that there is no such thing as a free lunch. Such enormous benefits must co with a corresponding price for Austria.
So, he waved his silver fork towards Joseph. "Perhaps I should offer my dear sister sothing in return, just to put my mind at ease."
Joseph smiled. "You're my closest uncle, there's no need for such formality. But if Austria could lower so tariffs on French goods, I believe my mother would be very pleased."
Joseph II imdiately adopted a serious listening posture. "Let's hear the specifics."
"Well, as you know, many workers in Lyon depend on textiles for their livelihood. If French textiles could enjoy lower tariffs than British goods, that would be wonderful. Of course, this excludes linen."
Joseph glanced at the Holy Roman Emperor and added, "Ideally, the tariffs should be more than 5% lower than those on British goods."
Although French textiles couldn't compete with British ones, they still held a significant advantage over those from other European countries. Joseph estimated that with the increased use of automated looms and steam engines, combined with wool supplies from New Zealand, French textile production costs could approach those of Britain within a year to a year and a half.
At that point, if the tariff situation favored France, they could capture a large share of the Austrian textile market.
Joseph II thought for a mont but didn't agree. "That might be difficult. Britain holds the 'most favored nation' status in Austria's textile tariffs. At best, I can make the tariffs on French and British textiles the sa."
Joseph could accept that; after all, asking for a 5% reduction was just a bargaining tactic. Now, to gain a competitive edge in costs, they would need to think about ways to improve transportation and other aspects.
He put on a frustrated expression. "How can French textiles compete with British ones...
"Alright, then, could you at least offer lower tariffs on machinery, steel products, paper, and chemicals?"
Joseph II quickly considered this. Aside from paper, he hadn't heard of any particularly competitive French goods among these categories. Since it was impossible to stop French paper from flooding the European market anyway, agreeing to lower tariffs on these items seed like it wouldn't have much impact.
(End of Chapter)
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