Kaunitz’s pupils constricted at the word “Silesia.”
Silesia was undoubtedly an eternal pain in the heart of every Austrian.
It was the occupation of this prosperous artisanal region by the Prussians that ended Austria’s claim to the title of “co-ruler” of Germany.
At the same time, Prussia was looked at with new respect by the other European nations and officially joined the ranks of first-rate powers, becoming a formidable contender for the “co-ruler” of Germany.
If any Austrian claimed he didn’t wish to reclaim Silesia, he would certainly be thrown into prison immediately, denounced as a traitor to Austria.
However, Kaunitz maintained his composure.
Silesia must be returned to Austria, but not now.
The radical reforms initiated by His Majesty the Emperor would make Austria much stronger in the future but currently only brought chaos and weakness to the country.
He remembered the last war over the Bavarian succession when Austria had mobilized an army of hundreds of thousands, hoping to take advantage of the confusion to recapture Silesia but didn’t even reach the border of Silesia before being blocked by the Prussian Army in Saxony, the western gateway into Silesia.
The Austrian Army and the Prussians were at a standstill for over a year, draining massive amounts of logistical supplies, yet unable to make any headway on the battlefield, and ultimately forced to cease hostilities under the mediation of France and Russia.
Moreover, Austria had to regurgitate Bavaria, which it had almost swallowed.
Keep in mind, that war took place ten years ago, before Austria’s reforms had started, when its national strength was stronger than it is now, and they still couldn’t bite down on Prussia, so recapturing Silesia now seemed even more impossible.
Kaunitz sighed and shook his head with a smile, “Austria does not have the necessity to go to war with Prussia for the time being. If I may speak frankly, General Wilmze’s army is already fully equipped and ready, and the rebellion in Brabant will soon be quelled. By then, the Prussians will only be able to withdraw to Potsdam.
“If you can persuade Bavaria to deploy more troops, this process will be even quicker.”
Talleyrand followed suit with a smile, lifting his glass in a toast to him: “Here’s to General Wilmze, and his glorious victory.”
But in his heart, he was silently recalling the Crown Prince’s firm prediction that the Austrian Army would suffer a crushing defeat in the Southern Netherlands.
He would spend the next period in Vienna, waiting for the news of the Austrian defeat to arrive, and then proceed to the next step – as per the Prince’s words, Austria certainly would not accept defeat lightly and would marshal the full strength of the nation to wage a decisive battle with Prussia.
His mission was to shift the location of the decisive battle from the Southern Netherlands to Silesia!
At the head of the banquet hall, Joseph II had barely touched the delicacies in front of him – for a year, he had been able to eat almost only porridge and over-stewed fish – and was looking eagerly at his nephew from France: “You mean to say, if this trade agreement is signed, France will implement a tariff of less than 5% on Austrian exports of glass, leather goods, silverware, and musical instruments?”
Given his recent health, it was rare for him to speak so long at once.
Joseph smiled and nodded: “You’ve forgotten the linen textiles, Your Majesty.”
“Oh, textiles,” Joseph II waved his hand dismissively, laughing, “I’m not yet senile. Austrian textiles are far from matching French goods; they simply cannot be sold in France.”
Joseph assumed a thoughtful pose, then looked up and said, “Mother has asked me to help you as much as possible, and flax textiles are a very important product for Austria… so how about this: France could reduce the tariff on these items to zero, including in North Africa and the Caribbean Sea. Meanwhile, Austria could impose any tariff it wants on French flax textiles.”
In Joseph II’s somewhat cloudy eyes flashed a surprise not seen in a long time: “Oh, my dear sister, she’s always so generous!”
According to the “Franco-Austrian Trade Agreement” just proposed by Joseph, Austria’s most important goods such as glass and fur would be able to enter France with very low tariffs, and other commodities including minerals, grains, cotton, and timber would enjoy the benefit of being exempt from tolls in France—a privilege not even French goods had. At present, goods transported from Lyon to Paris have to pay tolls at least ten times along the way.
If this agreement could be implemented, it would usher in a historic glory for Austrian commodity exports.
Based on his experience, he estimated that it could increase export revenues by at least thirty to forty percent, thus bringing in a large amount of fiscal income!
This would provide substantial support for his difficult reforms.
However, as Emperor of the Holy Rome, Joseph II knew well that there is no such thing as a free lunch, and Austria would definitely have to pay a corresponding price for these great benefits.
He waved the silver fork in his hand toward Joseph: “Perhaps, I should offer something in return for my dear sister, to ease my mind.”
Joseph smiled, “You are my close uncle, there’s no need for such formality. However, if Austria could also lower some tariffs on French goods, I believe mother would be very pleased.”
Joseph II immediately adopted a posture of earnest attention, “Speak in detail.”
“Well, you know, there are a large number of workers in Lyon who rely on textiles for their livelihood. If France could get tariffs lower than England on these goods, that would be great. Of course, excluding flax textiles.”
Joseph glanced at the Emperor of the Holy Rome and added, “It would be best if they could be over 5% lower than British goods.”
Although French textiles couldn’t compete with England, they still held an incomparable advantage over other European countries. Joseph estimated that with the extensive use of automatic looms and steam engines, as well as the supply of wool from New Zealand, within 1 to 1.5 years, the cost of the French textile industry could come close to that of Britain.
By then, as long as the tariffs were more favorable than Britain’s, France would be able to greatly capture the Austrian textile market.
Joseph II pondered for a moment, but did not agree, “That might be difficult. Austria has granted most-favored-nation treatment to British textiles; the best I can offer is for French textile tariffs to be the same as Britain’s.”
Joseph was actually able to accept this, since asking for a 5% discount was just an opening gambit. So, to gain a cost advantage, he’d have to find a way in areas like transportation.
He put on a dismayed face, “How could French textiles possibly compete with British ones…
“Alright then, for machinery, steel products, paper, chemicals, and such, you’ll have to give me low tariffs.”
Joseph II thought quickly. Among these goods, aside from paper, he hadn’t heard that French products had much competitive power.
Anyway, the cost of French paper was so low that it made all of Europe tremble, and it simply couldn’t be blocked, so agreeing to lower the tariffs on these items seemed to have no impact.