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.
Seven Years' War
Frederick II of Prussia had received reports of the clashes in North America and had formed an alliance with Great Britain. On 29 August 1756, he led Prussian troops across the border of Saxony, one of the small German states in league with Austria. He intended this as a bold pre-emption of an anticipated Austro-French invasion of Silesia. He had three goals in his new war on Austria. First, he would seize Saxony and eliminate it as a threat to Prussia, then use the Saxon army and treasury to aid the Prussian war effort. His second goal was to advance into Bohemia, where he might set up winter quarters at Austria's expense. Thirdly, he wanted to invade Moravia from Silesia, seize the fortress at Olmütz, and advance on Vienna to force an end to the war.