Holy Roman Empire-Chapter 968 - 231: Financing

Chapter 968: Chapter 231: Financing

In order to help the younger brothers recover economically, an Austrian version of the “Marshall Plan” was formulated. Its core purpose was to revitalize the economy of Europe and to snatch the commodity sales market, the only difference being that the content had undergone a slight change.

At this moment, Austria was far from being as wealthy as the Americans after World War II; the Vienna Government couldn’t conjure up massive financial aid on short notice.

To provide post-war reconstruction funds for various countries, it was inevitable to rely on the financial markets for financing, so interest could not be avoided.

Before the outbreak of the war in Europe, the four major financial centers of Europe were London, Paris, Vienna, and Frankfurt. As a titan in the financial world, the capital market in London was almost equivalent to the sum of the latter three.

Because of the war, Paris was essentially ruined. The counterattack before Napoleon IV fled had severely injured the French finance group, and it was already difficult enough for them to survive.

Austria’s development period was still too short. Franz particularly valued the real economy, and most of the domestic capital had flowed into industry, leaving not too much circulating in the financial markets.

Vienna and Frankfurt were able to become among the major financial centers of Europe not because they were incredibly powerful, but rather because their competitors were subpar.

If the currency circulating in the European financial markets was 100%, the London Financial Market accounted for 48.7%, with Paris in second place holding 19.6% (pre-war), followed closely by Vienna and Frankfurt with 14.1% and 13.7% respectively.

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Looking further down, the disparity becomes pronounced, with Milan ranking fifth and not even reaching two percentage points, not to mention Madrid and St. Petersburg.

This ranking was valid not only in the European Continent but also globally. Any one of these top four financial centers possessed more capital than the total capital of all the other financial markets combined.

From the data, it was evident that the British had a truly solid foundation. The accumulation of a century of the Colonial Empire was not something that could be overtaken overnight.

Even if Austria fully deployed the suction effect, aggregating capital from Central Europe, Southern Europe, Eastern Europe, and Northern Europe, it was still a lesser player.

This was even after seizing Gold from South Africa; otherwise, the gap would have been even more pronounced. It is known that at this time, the London Financial Market possessed more than half of the capital of the entire world.

With this solid foundation, John Bull endured two World Wars and continued until the 21st century, where London could compete with New York for the position of the world’s financial center.

Now, not only did Austria need to finance itself, but it also had to help its younger brothers finance, and a rough estimate concluded that it could not be done without thirty billion Divine Shields.

Trying to find all the solutions from the domestic financial market would inevitably drain the funds, potentially even triggering a stock market crash. Naturally, the Vienna Government wouldn’t do such a foolish thing.

If it couldn’t be managed domestically, then the only option was to look abroad. After all, capital knows no borders, and to Franz, money was money, no matter whether it came from domestic or foreign debt.

“Your meaning is that the British would use this as leverage to negotiate terms with us?”

Wanting to finance through the London Financial Market naturally meant not shaking off the British Government. Although the British clamored for a “free economy,” such significant international financing still inevitably involved government participation.

According to John Bull’s style, it was entirely possible that he would find an opportunity to negotiate terms with Austria.

“Yes, Your Majesty!”

Prime Minister Carl, “Without affecting the economy, the domestic financial market can at most provide half of the funds; adding in other financial markets, it’s estimated we could resolve only about twenty to thirty percent.

If we were using the money ourselves, it would definitely be enough. But considering the allies’ funding gap, that would be far from sufficient.

Now it’s not just Belgium and the Italian States that are short of money; Switzerland, Spain, and the Russians are also poor and need our financial support.

If they can’t get the money from us, they are very likely to lean towards the British, which would be very disadvantageous for us.”

Franz had personally experienced the power of “financial strength.” Not to mention that these allies had come together initially for mutual interests, even truly close allies couldn’t withstand the onslaught of “financial strength.”

The essence of international politics is interest, and the absence of betrayal is simply due to insufficient interests. If one talks about “loyalty,” then one has already lost.

In some sense, Austria was able to gather so many allies largely because it applied “financial strength.” The Vienna Government had more money than the Paris Government and was more willing to make an offer, so Austria won.

No choice, who would let Austria’s allies all be so impoverished? Even if they were not poor before the war, they had become poor now.

Let’s not even mention Belgium and the Italian States; both were troubled by the war.

The mountainous country of Switzerland had never been wealthy. It had been accumulating capital for the Industrial Revolution up to this day, not yet becoming the ideal nation that everyone would envy in later times. It was impossible to integrate new territories without borrowing money.

Spain could only say its ancestors were impressive; since the 19th century, they had always been in a financial crisis. Now, not only did they need to integrate the fruits of war, but they also had to go to Southeast Asia and wage war against the Japanese, and being broke was absolutely unacceptable.

The Russians were an old difficulty case; the history books would reveal that the Tsarist Government was always short of money.

The only consolation for Franz was that the Anti-French Alliance was still relatively stable and couldn’t be easily swayed by minor British inducements.

Due to geopolitical reasons, apart from Spain, Austria held significant deterrent power over its other allies. Thinking of becoming turncoats, they first had to consider whether they could afford Austria’s retaliation.

In this aspect, continental countries were stronger than maritime countries. Especially for small countries like Belgium and Switzerland, the consequences were even more ruthless.

If they offended the maritime hegemon, the British, the Royal Navy couldn’t land, and at most, it would mean a disadvantage in overseas trade; but if they offended the continental hegemon, Austria, it could directly lead to the destruction of their nation.

After pondering for a moment, Franz said coldly, “This financing is primarily to solve everyone’s difficulties; it makes no sense for our family to bear it alone. Bring in the Anti-French Alliance and the British to discuss.”

“We can use the French’s war reparations as collateral, with all the countries of the Anti-French Alliance jointly guaranteeing the safety of the debt and sharing the responsibility for default.”

“If the British are not reassured, the Anti-French Alliance could maintain an army of no less than five hundred thousand in France to urge the French government to fulfill its debt obligations.”

“By the way, let out the news that we are preparing to establish a European Customs Union and are considering whether to let Britain join.”

“As for other conditions, you decide. As long as they do not harm our core interests, they are negotiable. I believe the British Government will make the right choice.”

When you are in their shoes, Austria wants the markets of the countries in the Anti-French Alliance, and there’s no reason for the British not to be intrigued. Under such circumstances, helping the countries to recover economically is essentially beneficial for everyone.

If the British Government wants to use the loan as leverage, Franz wouldn’t mind coming to a mutual destruction, creating a “European Economic Community” ahead of schedule and excluding the British from the European economic system.

“Lacking money” simply means that the economic recovery would be a bit slower, but the Anti-French Alliance is not short of food. As long as the people are fed, there won’t be any major chaos.”

“Lacking markets” is different though. These days, the European Continent is arguably the most purchasing power-heavy region in the world, accounting for more than half of Britain’s total foreign trade volume.”

Losing such a large market all at once means it would be difficult to find new markets for replacement in the short term. India does have great market potential, but potential does not equate to purchasing power.”

By the time the market has been cultivated, too much time will have passed. Without Europe, in the short term, Britain would have to face an increase of millions of unemployed, and an economic crisis would be inevitable.”

Though the conflicts between Anglo-Austria are significant, the hatred is not. Even if they clash, it happens behind closed doors, while the public relationship between the two nations remains reasonable.”

Franz did not think that the British Government would risk mutual destruction to confront Austria head-on, which would not align with the politicians’ interests.”

Similarly, it does not align with Austria’s interests. Considering the potential for development, Austria clearly surpasses Britain, and slowing down development is simply wasting its own advantages.”

One could say, for each day that passes, Austria’s advantage increases by a bit. Especially after the annexation of the German Federation, there will be a qualitative leap.”

To achieve his goals, Franz even used the “troops stationed in France” as a negotiation condition.”

If the debt enforcement is to be guaranteed, there must be some troops present. Otherwise, if the French government defaults, another Anti-French war cannot simply be started again, can it?”

However, the number of troops present is indeed a question. “No less than five hundred thousand” is certainly impossible; if there really were that many troops in France, not to mention a French revival, just feeding them would bankrupt the French.”

If the military discipline worsens, then the French government wouldn’t need to do anything but daily clean up after the troops.”

The British people want to maintain the French’s vitality, and they still fantasize about France rising again, so they must keep the Anti-French Alliance’s troop numbers down.”

Foreign Minister Weisenberg: “Your Majesty, other issues are negotiable, but using France’s reparations as collateral for financing is something the British will likely find hard to agree to.

Even if the countries of the Anti-French Alliance jointly provide a security backing, it only ensures that the French Government doesn’t default maliciously.”

Based on the current situation, it will take France a long time to recover economically after the war. If the economy does not recover, the government won’t have money to pay off its debts. Without money, no one can do anything.”

Not long ago, when the German Federal Government suggested a transfer of claims, the London Government required the governments of the states within the German Federation to provide an advance guarantee that the French would be able to pay the reparations before they would accept the transfer of claims.”

Clearly, the British have already recognized the risks and it won’t be easy to trick them.”

As a protagonist of the war, no one knows better than the Viennese Government what the French lost during the war.”

According to the “Proposed Measures Against France” drafted by the Anti-French Alliance, unless the French collectively start cheating, defaulting on the debt is just a matter of time.”

If they accepted the guarantee, once the French defaulted on the debt, would the British pursue the debt, or not?”

Pursuing the debt would undoubtedly be like stabbing the French and pushing them into an abyss, cutting off their chances of rising again.”

Not pursuing the debt would indeed help the French, but capital wouldn’t agree. Financial syndicates cannot consider the big picture; repaying debts is necessary.”

Franz shook his head, “No matter, we don’t need the British Government’s approval, just that the financial institutions providing funds to us recognize it.

High risk brings high returns; just increase the interest a bit, and the bankers won’t resist.

Moreover, we have provided a guarantee for debt security. If the French Government indeed cannot repay, the countries will have to share the repayment responsibility.”

They are not lending their own money after all, as long as the profits are large enough, and they have sufficient reason to convince the investors, they won’t mind taking the risk.”

Things are definitely not as simple as Franz made it sound, the premise of “shared repayment responsibility” must be based on France’s inability to pay.

Just determining “inability to pay” is a huge pitfall. Repaying debts in cash counts as repayment, so does repaying in kind.”

Driven to desperation, they could even carve out a chunk of land from mainland France to offset the debts.”