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.
Seven Years' War
Britain now threatened to withdraw its subsidies if Frederick did not consider offering concessions to secure peace. As the Prussian armies had dwindled to just 60,000 men and with Berlin itself about to come under siege, the survival of both Prussia and her King was severely threatened. Then on 5 January 1762 the Russian Empress Elizabeth died. Her Prussophile successor, Peter III, at once ended the Russian occupation of East Prussia and Pomerania (see: the Treaty of Saint Petersburg (1762)) and mediated Frederick's truce with Sweden. He also placed a corps of his own troops under Frederick's command. Frederick was then able to muster a larger army, of 120,000 men, and concentrate it against Austria. He drove them from much of Silesia, while his brother Henry won a victory in Saxony in the Battle of Freiberg (29 October 1762). At the same time, his Brunswick allies captured the key town of Göttingen and compounded this by taking Cassel.