Creation of the Dual Monarchy of Austria-Hungary: History & Impact

Lesson Transcript
Instructor: Christopher Sailus

Chris has an M.A. in history and taught university and high school history.

The dual monarchy of Austria-Hungary was created due to compromises made between the two states, one of which included Hungary's independence. Study the history of the creation of Austria-Hungary, the 'Ausgleich,' and the impact of this creation. Updated: 09/28/2021

Creation of Austria-Hungary

High school can be a rough time in a kid's life. Friends are made, cliques are formed, and exclusionary games can be played by the meaner members of a group. In the scramble to unite the German lands in the mid-19th century, Austria got forced out of any resulting German state after a war with Prussia in 1866. Just like a spurned group member in high school, it was forced to form its own.

Austria had been a member state of the Holy Roman Empire for centuries. By the beginning of the early modern period, the Austrian ruling family, the Hapsburgs, traditionally controlled the imperial throne. After the Thirty Years' War ended in 1648, the emperorship lost most of its traditional power over the affairs of other German states, and, in turn, the Austrian Hapsburgs began to focus on exerting control over the territory it directly controlled in South-Central Europe. By the beginning of the 18th century, Austria controlled much of its surrounding territory, including Silesia, Bohemia, and parts of Hungary.

In the 18th century, as the influence of the Holy Roman Empire continued to wane, Austria's power in Central Europe rose in tandem with the power of a northern German state, Prussia. In fact, the two burgeoning German countries fought two wars in the middle of the 18th century, the War of the Austrian Succession and the Seven Years' War, in which Austria lost Silesia to Prussia.

The two states were both defeated and conquered by Napoleon in the early 19th century, and after Napoleon's defeat were the two principal powers of the German Confederation that was formed in 1815. Austria and Prussia vied for control of the loosely-affiliated confederation. In 1866, Prussia refused Austrian troops entry to cross Prussian territory, and Prussia subsequently declared war on Austria. Despite having the support of most of the Confederation, Austria was soundly defeated by the better trained and better equipped Prussian military. As a result, Prussia formed a new German Confederation that specially excluded territories directly ruled by Austria.

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  • 0:07 Creation of Austria-Hungary
  • 2:03 The Ausgleich
  • 3:43 Impact
  • 4:12 Lesson Summary
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The Ausgleich

Exclusion from the now Prussia-controlled German Confederation left Austria in economic and political crisis. As a result, it turned to consolidate power in its territories held outside the reach of the soon-to-be-united Germany. Austria had controlled parts of Hungary since Austria's rise to regional prominence in the 17th century, and those parts had been a continual source of intermittent rebellion against the Austrian monarchy.

Instead of opting for a costly campaign that would have further reduced the already ailing Austrian treasury, the Austrian Emperor, Francis Joseph, chose to negotiate with the Magyar families that had traditionally ruled Hungarian lands. In 1867, the two parties signed the Ausgleich - literally, the 'Compromise' - which acknowledged the Austrian Emperor Francis Joseph as King of Hungary and granted him control of all of the territory in the Balkans and Eastern Europe under Hungarian control.

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