Austro-Italian ironclad arms race
In the years after Ferdinand Max's departure from Austria, the Imperial Austrian Navy suffered under further political and budgetary constraints. In April 1864, it was proposed that the naval ministry, which the former Archduke had helped to establish, be disbanded. In January 1865, Emperor Franz Joseph I dissolved the ministry and the Imperial Austrian Navy was again placed under the jurisdiction of the Austrian Ministry of War. Under the 1865 budget, just 7,100,000 Florins were allocated towards naval expenses, but once more, none of the funds were designated for warship construction. In 1866, the naval budget grew slightly to 7,800,000 Florins, but for the third consecutive year there would be no funds for additional ironclads, or other warships. Thus, when the Seven Weeks War began in June 1866, the Imperial Austrian Navy would possess only ships which had been constructed during Ferdinand Max's tenure as "Oberkommandant der Marine".
Silesian Wars
After entering Bohemia, Prussian forces converged upon Prague by the beginning of September, seizing the city on 16 September. This new threat drew the Austrian army back from Alsace through Bavaria; the French, however, failed to harass and disrupt the Austrian redeployment, so Austria's army was able to return to Bohemia quickly and at full strength, though it was forced to abandon control of Alsace and Bavaria. Frederick gathered his forces around Prague and tried repeatedly to force a decisive engagement, but Austrian commander Otto Ferdinand von Traun focused on harassing the invaders' supply lines, eventually forcing the Prussians to abandon Prague and Bohemia and retreat into Upper Silesia in November.
With the January 1745 Treaty of Warsaw, Austria established a new "Quadruple Alliance" among Austria, Britain, Saxony, and the Dutch Republic, followed by a secret offensive alliance between Austria and Saxony, which envisioned a territorial partition of Prussia. Meanwhile, Emperor Charles died on 20 January, destroying the rationale behind Frederick's alliance. These events combined to produce a major shift in the direction of the war in Germany. Austria renewed its offensive against Bavaria in March 1745, decisively defeating the Franco-Bavarian army at the 15 April Battle of Pfaffenhofen, and making peace with Maximilian III of Bavaria (the son of the late Emperor Charles) by the Treaty of Füssen on 22 April.