Holy Roman Empire-Chapter 965 - 228: Entangled...

Chapter 965: Chapter 228: Entangled…

The British Government was not only troubled by the international situation but also by the accompanying economic issues.

If nothing unexpected occurred, the markets abandoned by the French would largely be taken over by Austrian industrial and commercial products, leaving Britannia to pick up only scraps and leftovers.

The law of “the strong get stronger” applied here as well. Austria, already an industrial powerhouse, now captured the French markets, ensuring further development of its domestic industry and commerce.

Anyone with a bit of common sense knew that the more industrial and commercial products were produced, the lower the cost would be, thus strengthening market competitiveness.

The market being finite, the further development of Austria’s industry and commerce was bound to compete with Britannia.

Not to mention other regions, Britannia’s market share in Europe would definitely be squeezed.

With the market shrinking, corporate profits would decrease and the money invested in product research and promotion would also be reduced, forming a vicious cycle.

Of course, these were long-term issues. Britannia had the world’s richest colonies and could hold up for a short period.

At worst, they could slowly transition economically, moving away from the low-profit manufacturing industry to vigorously develop finance and services. This had been done in the original timeline and could naturally be done now.

The long-term problems were for the next or the following Prime Minister to address. Gladstone need not worry about them, as he already had enough immediate troubles.

As the world’s leading financial empire, high-interest loans were inevitable. Everyone knew that those who played in finance were audacious and utterly unscrupulous.

As long as the profit was substantial enough, regardless of the risks, there would always be takers.

Britannia, which promoted a free economy, did not interfere in private lending. During the European wars, these speculators were inevitably active.

While some made a killing, others suffered great losses. Following the end of the European wars, financial groups that bet on the French government were now trapped.

If it were the consortium’s money that was trapped, Gladstone would only be popping champagne and celebrating, not bothering about the survival of these vampires.

Regrettably, the vampires were shrewd and had meticulously planned everything, profiting themselves while losses were solicited from the public.

From the end of the European wars until now, over three hundred financial institutions in Britannia had declared bankruptcy, conveniently dumping the mess onto the government’s lap.

Recovering debts was impossible. From the current situation, even if the French government had money, it was looted clean by the Anti-French Alliance. It seemed unlikely they could pay these debts for decades.

The French rotten debts had yet to be dealt with when the German Federation exploded with a debt default, delivering another blow to the London Government.

This time, it wasn’t just private loans—many of the loans had the British Government’s assurance of safety.

With no other option, the German Federal Government declared bankruptcy. In an effort to save on expenses, they even closed the London embassy, entrusting their affairs to the Austrian embassy in London.

It wasn’t that the German Federal Government intentionally “defaulted”; they genuinely had no money. The sub-states withheld taxes, the central zones were destroyed, the government lost all its income, and even public servant salaries had to be fronted by Austria, let alone repaying debts.

Approaching year-end accounting, unable to meet its debts, the government had no choice but to declare bankruptcy.

Indeed, it wasn’t just the German Federation that went bankrupt. The government of Belgium, devastated back home, also declared bankruptcy at this time.

New n𝙤vel chapters are published on freeweɓnøvel.com.

Being broke meant being broke; they didn’t even pretend to be poor. It wasn’t a specific move against Britannia but rather a default on all debts. But since Britannia had lent out the most, it became the biggest victim.

“Have the governments of the Prussian and German countries given any explanation?”

Gladstone directly ignored the French government; obviously, he did not believe he could extract money from under the nose of the Anti-French Alliance.

The governments of Prussia and Germany had no money, which was a well-known fact, and Gladstone did not expect them to immediately produce money.

Having no money was fine; Britannia had a professional financial team. As long as there were enough collateral assets, securing another loan wouldn’t be a problem.

The key was the attitude toward resolving the issue, whether it was a temporary cessation of payment due to lack of funds or an outright refusal to pay.

“The Belgian government proposed a plan to delay payments for five years, using the French war indemnities as security and prioritizing the reimbursement of war indemnities paid by the French after five years toward us,”

The German Federal Government proposed a debt transfer, directly deducting from the war indemnities, making the French bear this debt.

Theoretically, the proposals from both the Prussian and German governments could work. The only issue was whether the French possessed the capacity to pay.”

It wasn’t that George was soft-hearted; it was just that the situation was special. Belgium was now destitute with government coffers so empty they needn’t even have a front door; extracting oil by bombing them was impossible.

The German Federation seemed to be in a slightly better state, but its government was too weak, potentially closing down at any moment.

If the debt issue wasn’t resolved quickly, and Austria declared the restoration of the Holy Roman Empire and dissolved the illegal German Federation, then the creditors themselves might disappear altogether.

No country would pay for an illegal government established by rebels unless Britannia could persuade Austria to recognize the legitimacy of the German Federal Government.

This was obviously impossible. Recognizing the legality of the German Federal Government meant the division of the Empire. Vienna resisted the pressure thirty years ago and now it wouldn’t venture such recognition.

“Problematic indeed!”

“From the current situation, the Anti-French Alliance will definitely extract a hefty sum from the French. The war reparations are unlikely to be one billion British pounds,

Belgium made great sacrifices in this war, and logically Austria should offer some consolation, ensuring a significant proportion of the compensation isn’t low.

With five years as a buffer, the French should have also recovered somewhat, and even if unable to pay the full amount of indemnities annually, the portion accruing to Belgium should be enough to cover our debts. If there was a shortfall, Belgium could make up for it.”

The proposal from the German Federal Government is problematic; the debt transfer might seem lossless, but the risks we must bear are immense.

Not only do we have to worry about the French’s ability to pay, but we also have to consider political risks. If Russian-Austria meddles and causes the French to deliberately delay, or places the transferred debt last in line for settlement, I estimate we won’t see the money by the end of the century,”

Gladstone couldn’t help being concerned, as Britannia had played similar tricks before, and now the tables have turned, putting them in a reactive position.

Accepting the debt transfer from the German Federation means taking on high risk; rejecting the debt transfer means missing even the chance to take risks.

The current German Federal Government is like a limited liability company about to go bankrupt, registered with the minimum required capital.

Anyway, everyone is only liable within the registered capital, and both legal persons and shareholders have opted to cut losses promptly, with no intention of rescuing the company.

As the creditor, Britannia faces a tragedy; they must either press for collection of the company’s bad debts from abroad or wait for bankruptcy liquidation.

Foreign Minister George added, “Not just us; other creditors of the German Federation are receiving the same treatment, including the Austrian Royal Bank.

George I has already closed his doors, leaving all matters to the German Federal Government, and the Kingdom of Hanover and the German Federation have completed their separation.

In order to stop losses, the Foreign Ministry proposed using colonies as debt payment, but they were rejected. Ewald even boasted that if we dared touch their colonies, they would declare war on us.”

None of them are easy to deal with, even Britannia’s own offspring are now rebelling. Regardless of past relationships, they are not going to take on the debts.

Even though they know this would offend Britannia to death, they are now fearless. After all, the revived Holy Roman Empire is the master of Europe, and with the Central Government to support them, there’s really no need to show submission.

…

It’s not only the British Government that is in a quandary; the Japanese Government in Tokyo is also having a hard time. Even though the Japanese Army has occupied the Philippine Islands, it brings no comfort to Emperor Meiji.

There’s no helping it; plans do not change as quickly as circumstances do. They were ready to take a chance once the situation clarified, but unfortunately, due to communication difficulties, the Japanese Government’s news was delayed by several days.

However, just in those few days, the French surrendered, making it impossible for the Japanese Government to even deliver the prepared declarations of war.

They can’t even make a forced issue. The French Indochina Peninsula was snatched up by the British, and several small islands in the Southeast Asia region fell into Austrian hands; there wasn’t a single one they dared to provoke.

The speculative failure has put Japan in a particularly awkward position, especially unfavorable given the coming Vienna Peace Conference.

Spain is a European country and a member of the Anti-French Alliance; it’s clear whom everyone will support at the Vienna Peace Conference.

Without international recognition, their occupation of the Philippine Islands is like duckweed without roots, vulnerable to being taken at any moment.

In the days to come, they not only have to worry about a Spanish counterattack but also be wary of underhanded moves by Anglo-Austria.

The reason Spain managed to hold onto the Philippine Islands previously wasn’t just because of its strength; looking solely at strength, neither Spain, the Netherlands, nor Portugal were qualified to hold onto their colonies; it was more about political factors.

Now, with the major changes in the situation in Europe and the Philippine Islands falling into Japanese hands, the previous political factors are no longer applicable.

Having missed the chance for speculation, the Japanese Government can only rely on its strength to hold onto the Philippine Islands.

“Prime Minister, what is the stance of European countries?”

Ito Hirobumi looked tense and with some difficulty said, “The situation is not optimistic; I personally visited the envoys of various countries. Even when the Empire made concessions, we received clear support from none of these countries.

Among the major powers, the British are ambiguous, as if completely indifferent to our occupation of the Philippine Islands; the Russians also lean more towards Spain, and after the Empire made concessions, we still didn’t get their assurances.

Austria’s stance is the most unfavorable for us; Ambassador Antonio explicitly conveyed their wish for us to give up the Philippine Islands and stop our expansion into Southeast Asia.

The only good news is that Austria’s stance is not too firm, with no intent of military intervention. Their opposition to our occupation of the Philippine Islands is probably because Spain is their ally.

According to news from Europe, the Spaniards have already begun assembling an expeditionary fleet, currently comprising three new battleships and ten ironclads, all from the French Navy,”

Minister of the Navy Saigo Tsugumichi asked doubtfully, “Weren’t all French warships supposed to be auctioned off? How did they end up in Spanish hands?”

Ito Hirobumi explained helplessly, “The French warships are trophies of the Anti-French Alliance, and Spain is a member of the alliance. Borrowing them before the auction is not a big deal.

Even if they were to be auctioned, it would just be a formality; these warships would still end up in Spanish hands. The really purchasable warships by the outside world are just what’s left over by the countries of the Anti-French Alliance.”

Backdoor deals are only natural. As a member of the Anti-French Alliance, it would be strange if they did not have privileges.

Saigo Tsugumichi fell silent. The century’s navy is not to be underestimated; despite Spain’s decline, their naval heritage is still intact. As long as there is money and warships, a fleet can be quickly assembled.

The Japanese Navy’s resources are limited, their most advanced warships being a few ironclads or cruisers, and their most advanced battleships are virtually non-existent.

Warships are not common weapons and cannot be purchased simply with money. Warships available on the international market are all second or third-rate, and might even be simplified versions – something the British excel at.

Putting a pre-dreadnought of over ten thousand tons against a cruiser of a few thousand tons is less a battle and more a slaughter. The navy relies not on braveness but on technological gaps that can’t be bridged with a few slogans.

However confident, Saigo Tsugumichi did not believe that the Japanese Navy’s few decrepit ships could compare to the cream of the French Navy.

Seeing the navy cower, the Imperial Japanese Army’s General Ozan quickly interjected, “Don’t worry, Your Majesty. The Imperial Japanese Army fears no challengers, and with us present, we will definitely hold onto the Philippine Islands.”

Unlike the navy’s concerns, the army was brimming with confidence. In the prior battles for the Philippine Islands, the Japanese Army had soundly defeated the Spaniards.