Franz Joseph I of Austria
If Greater Germany was to prevail, the crown would necessarily have to go to Franz Joseph, who had no desire to cede it in the first place to anyone else. On the other hand, if the idea of a smaller Germany won out, the German crown could of course not possibly go the Emperor of Austria, but would naturally be offered to the head of the largest and most powerful German state outside of Austria—the King of Prussia. The contest between the two ideas, quickly developed into a contest between Austria and Prussia. After Prussia decisively won the Seven Weeks War, this question was solved; Austria lost no territories as long as they remained out of German affairs.
Seven Years' War
Things were looking grim for Prussia now, with the Austrians mobilising to attack Prussian-controlled soil and a combined French and "Reichsarmee" (German states) army under Prince Soubise approaching from the west. The "Reichsarmee" was a collection of armies from the smaller German states that banded together to heed the appeal of the Holy Roman Emperor Franz I against Frederick. However, in November and December 1757, the whole situation in Germany was reversed. First, Frederick devastated Soubise's forces at the Battle of Rossbach on 5 November 1757 and then routed a vastly superior Austrian force at the Battle of Leuthen on 5 December 1757. Rossbach was the only battle between the French and the Prussians during the entire war. At Rossbach, the Prussians lost about 548 men killed while the Franco-German force under Soubise lost about 10,000 killed. Frederick always called Leuthen his greatest victory, an assessment shared by many at the time as the Austrian Army was considered to be a highly professional force. With these victories, Frederick once again established himself as Europe's premier general and his men as Europe's most accomplished soldiers. However, Frederick missed an opportunity to completely destroy the Austrian army at Leuthen; although depleted, it escaped back into Bohemia. He hoped the two smashing victories would bring Maria Theresa to the peace table, but she was determined not to negotiate until she had re-taken Silesia. Maria Theresa also improved the Austrians' command after Leuthen by replacing her incompetent brother-in-law, Charles of Lorraine, with von Daun, who was now a field marshal.