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".
War of the Bavarian Succession
Count Karl-Wilhelm Finck von Finckenstein, Frederick the Great's prime minister, believed that any Austrian acquisition in Bavaria would shift the balance of power in the Holy Roman Empire, diminishing Prussia's influence. Prussia's recent gains had been hard-won: thirty years earlier, Frederick had engaged in protracted wars in Silesia and Bohemia, resulting in Prussia's annexation of most of Silesia, and now, with the economy and society modernizing under his direction, Prussia was emerging as a world power. In the Silesian Wars and the Seven Years' War, Frederick had earned a new, if grudging, respect for his kingdom's military and diplomatic prowess from the European powers of France, Russia, Britain and Austria. To protect Prussia's status and territory, Finck and Frederick constructed an alliance with the Electorate of Saxony, ostensibly to defend the rights of Charles II August, Duke of Zweibrücken.