The Austro-Hungarian Empire (1867-1918)
The Austro-Hungarian Empire was a great European Power created in 1867 after the so-called “Austro-Hungarian Compromise” between Vienna and Budapest, joining the Kingdom of Hungary and the Empire of Austria. After this, many other countries were annexed to the empire, including the Czech Republic, Slovakia, Slovenia, Croatia and parts of Montenegro, Serbia, Romania, Ukraine, Poland and Italy. Along with Prussia, it was one of the two major powers of the German Confederation.
Politics
The Austro-Hungarian Compromise transformed the Habsburg Monarchy into an alliance of two sovereign States (Dual Monarchy). Both monarchies had internal autonomy from the empire, as they each had its own parliament and government in order to manage its domestic affairs. Foreign affairs and the military came under joint oversight. The citizens on each half of the empire were also treated as foreigners in the other half.
Franz Josef I was its sovereign and emperor (1848-1916), though he was first crowned as king both of Austria and Hungary. He had a difficult relationship with his nephew and heir to the throne Franz Ferdinand, due to his liberal and progressive political ideas.
Economy
During its 50-year existence, the Austro-Hungarian empire experienced a great economic change, specially focused on Vienna and Budapest .
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Hungary observed a rapid economic growth and social development, a period known in Hungarian as the "Happy Times of Peace".
The economy of Hungary was almost entirely based on agriculture at the time of the foundation of the Dual Monarchy. After the rapid industrialization and urbanization due to technological change, the population engaged in agricultural production decreased from 60% to 45%. Thus, the proportion of Hungary’s population working on heavy industry rose considerably.
The strong agriculture and of the with the centre of became predominant within the Empire and made up a large proportion of the export to the rest of Europe.
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From 1870-1913, Austria’s machine-building industry also contributed to the growth of industrial economy, especially for the electric power industry, locomotive industry and automotive industry. Thus, the country became the 4th biggest machine manufacturer in the world. The rise in Austrian machinery production was related with the development and application of new technologies, a rise in agriculture’s machinery requirements and a favourable development of machinery trade.
Some of the output growth in the machine building industry was most probably related to the effects of increased military orders and the associated expansion of armaments and ship- building.
The official currency of the Austro-Hungarian Empire from 1892 until its dissolution in 1918 was the krone or korona.
