Austro-Italian ironclad arms race
Austria's defeat in the Seven Weeks War forced Austria to determine a new set of foreign and domestic policies for the future, as Austria's interests since the days of the Holy Roman Empire had primarily been found in Italy and Germany. The Empire thus reformed itself into the Austria-Hungarian Empire following the adoption of the Austro-Hungarian Compromise of 1867 (German: "Ausgleich"), which re-established the sovereignty of the Kingdom of Hungary and placed Hungarians within the Empire on an equal footing with Austrians. Under the "Ausgleich", Emperor Franz Joseph I would be crowned as King of Hungary, while a separate parliament at Pest with powers to enact laws for the lands of the Holy Crown of Hungary would be established.
Maximilian III Joseph, Elector of Bavaria
Upon his father's death in January 1745, he inherited a country in the process of being invaded by Austrian armies (see War of the Austrian Succession). The 18-year-old Maximilian Joseph wavered between the "Peace-party", led by his mother Maria Amalia of Austria and Army Commander Friedrich Heinrich von Seckendorff and the "War-party", led by Foreign Minister General Ignaz Count of Törring and the French envoy Chavigny. After the decisive defeat in the Battle of Pfaffenhofen on 15 April Maximilian Joseph quickly abandoned his father's imperial pretenses and made peace with Maria Theresa in the Treaty of Füssen, in which he agreed to support her husband, Grand Duke Francis Stephen of Tuscany, in the upcoming imperial election. During the Seven Years' War Bavarian forces then fought on the Habsburg side. Maximilian Joseph's sister Maria Josepha of Bavaria was married in 1765 to Maria Theresa's son Emperor Joseph II. But long-term weakening of Prussia was not in the Bavarian interest, as that country offered the only counterweight to the Habsburg monarchy. Maximilian Joseph tried, as far as possible, to keep Bavaria out of the wars. Apart from militia troops, he sent only a small force of 4,000 men to join the Austrian army. In 1758/1759 (only a year and half into the war), he withdrew Bavarian auxiliary troops from Austrian service. Together with the Wittelsbach Elector Charles Theodore of the Palatinate he enforced the neutrality of the Empire during the conflict.