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
The Saxon and Austrian armies were unprepared, and their forces were scattered. Frederick occupied Dresden with little or no opposition from the Saxons. At the Battle of Lobositz on 1 October 1756, Frederick prevented the isolated Saxon army from being reinforced by an Austrian army under General Browne. The Prussians then occupied Saxony; after the Siege of Pirna, the Saxon army surrendered in October 1756, and was forcibly incorporated into the Prussian army. The attack on neutral Saxony caused outrage across Europe and led to the strengthening of the anti-Prussian coalition. The only significant Austrian success was the partial occupation of Silesia. Far from being easy, Frederick's early successes proved indecisive and very costly for Prussia's smaller army. This led him to remark that he did not fight the same Austrians as he had during the previous war.