Austro-Italian ironclad arms race
Seizing upon the decline of the Regia Marina in the years immediately after the Battle of Lissa, Tegetthoff worked to continue the efforts of Archduke Ferdinand Max of expanding the ironclad fleet of the now Austro-Hungarian Navy. Tegetthoff found political allies in the Austro-Hungarian Minister of War Carl von Franck and retired Admiral Bernhard von Wüllerstorf-Urbair. Wüllerstorf's and Franck's primary arguments in favor of continuing with the ironclad program Austria had engaged in prior to the Seven Weeks War lay largely along economic grounds. The two believed that constructing new ironclad warships would rejuvenate Austria-Hungary's economy following the defeat at the hands of Prussia and Italy, and that such a fleet would help to open up new commercial opportunities in the Levant and the Middle East. These proposals would be shelved however while Austria continued to reel from the military defeats inflicted by Prussia, and several cabinet reshufflings by Emperor Franz Joseph I resulted in a government more interested in pursuing revenge against Prussia than constructing new ironclads, which would be of little use in a hypothetical second war with Prussia.
History of Austria
Over the next three years Austria, whose foreign policy was now directed by Philipp Stadion, attempted to maintain peace with France, avoiding the War of the Fourth Coalition (1806–1807) but obliged to do France's bidding. The overthrow of the Spanish Bourbons in 1808 was deeply disturbing to the Habsburgs, who rather desperately went to war once again in 1809, the War of the Fifth Coalition this time with no continental allies, but the United Kingdom. Stadion's attempts to generate popular uprisings in Germany were unsuccessful, and the Russians honoured their alliance with France, so Austria was once again defeated at the Battle of Wagram, although at greater cost than Napoleon, who had suffered his first battlefield defeat in this war, at Aspern-Essling, had expected. However Napoleon had already re-occupied Vienna. The terms of the subsequent Treaty of Schönbrunn were quite harsh. Austria lost Salzburg to Bavaria, some of its Polish lands to Russia, and its remaining territory on the Adriatic (including much of Carinthia and Styria) to Napoleon's Illyrian Provinces. Austria became a virtual subject state of France.