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.
Silesian Wars
In January 1762, however, Austria was suddenly abandoned by its chief ally upon the death of Empress Elizabeth of Russia. She was succeeded by the ardently pro-Prussian Peter III of Russia, who immediately recalled his armies from Berlin and Pomerania and made peace with Prussia. Peter was himself overthrown and assassinated that summer, but by then the war had again shifted in Prussia's favor. Both sides were nearing exhaustion, and peace talks to end the wider Seven Years' War began in late 1762. In the end, negotiators agreed on a return to "status quo ante bellum", confirming Prussia's control of Silesia in the February 1763 Treaty of Hubertusburg. Prussia also committed to support the election of Maria Theresa's son, Archduke Joseph, as Holy Roman Emperor.