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The Austro-Hungarian Compromise of 1867 (, ) established the Dual Monarchy of Austria-Hungary. Signed by Emperor Franz Joseph of Austria and a Hungarian delegation led by the statesman Ferenc Deák, the Compromise established the framework of the new government in which the Cisleithanian (Austrian) and Transleithanian (Hungarian) regions of the state were governed by separate Parliaments and Prime Ministers. Unity was maintained through rule of a single head of state of both territories and governments; with a combined armed forces with the Archduke/King as their Commander-in-Chief; and through several ministries under his direct authority and serving the whole Empire and Kingdom directly. The Compromise was formally voted on by the restored Hungarian Diet on 30 March 1867.

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History

Prior to the Compromise, the Habsburg Empire had addressed internal pressures through less drastic reform. Rising nationalism throughout the 19th century threatened the stability of the state as the ruling Austrian elite faced pressures from Magyars, Romanians, Czechs, and Croats, among others. Following the revolutions of 1848, the government enacted a series of constitutional reforms that failed to resolve the situation.. The state's loss in the Austro-Prussian War in 1866 was the final factor in the state’s decision to restructure. The defeat by Protestant/Lutheran Prussia forever doomed Austria’s pretensions to continue to rule directly; or to indirectly influence the southern and “western” Catholic German states; principally Bavaria, though they would not be unified (under the leadership of Prussia) until after the Franco-Prussian War (1870). They were decisively turned away from the Austrian/German direction by the Prussian victory. With the defeat, Austria also lost the opportunity to have a continued influence in and any remaining claims in Italy, which before had dominated her foreign policy interests. The state needed to redefine itself in order to maintain unity in the face of nationalism.Seton-Watson, R. W. "The Austro-Hungarian Ausgleich of 1867." The Slavonic and East European Review 19.53/54 (1939): 123–40.
The suggestion for a dual monarchy was made by the Habsburgs but Hungarian statesman Ferenc Deák is considered the intellectual force behind the Compromise. Although initially a supporter of the Hungarian Revolution of 1848 and an independent state for Magyars, Deák broke with Lajos Kossuth and others and advocated for a modified union under the Habsburgs. Deák took the line that while Hungary had the right to full internal independence, questions of defence and foreign affairs were "common" to both Austria and Hungary under the Pragmatic Sanction. He also felt that Hungary benefited through continued unity with a wealthier, more industrialized Austria. Further, Deák believed that the Compromise would end the pressures on Austria of continually choosing between Magyar and Slav populations.Tihany, Leslie C. "The Austro-Hungarian Compromise, 1867-1918: A Half Century of Diagnosis; Fifty Years of Post-Mortem." Central European History 2.2 (1969): 114–38.

Terms

Under the Compromise of 1867, Austria and Hungary each had separate parliaments that met in Vienna and Buda (later Budapest), respectively, that passed and maintained separate laws. Each region had its own government, headed by its own prime minister. The "common monarchy" consisted of the emperor-king and the common ministers of foreign affairs, defense and finance in Vienna. Terms of the Compromise were renegotiated every ten years.

Continuing pressures

The Compromise of 1867 was meant to be a temporary solution to the problems the state faced. However, the resulting system was maintained until the forced dissolution of the state following World War I. The favoritism shown to the Magyars, the second largest ethnic group in the state after the Austrian Germans, was the source of discontent on the part of other ethnic groups like the Czechs and Romanians.Cornwall, Mark. Last Years of Austria-Hungary: A Multi-National Experiment in Early Twentieth-Century Europe, 2nd ed. Exeter: University of Exeter Press, 2002. Although a Nationalities Law was enacted to preserve the rights of ethnic minorities, in reality the two parliaments took very different approaches to the continuing problem.

The basic problem in the latter years was that the Compromise with Hungary only whetted the appetites of the non-Hungarian minority peoples and regions in Hungary which were regarded as historically within the boundaries of the previous Hungarian Empire. And in which the majority of Hungarians felt they had unwillingly, and only under coercion accepted in the Compromise. The crucial caveat that the Hungarian Nobility, Magnates (great rural estate landowners), and the urban Upper Classes, obtained in the Compromise; was that the Austrian Arch-Duke who was separately crowned King of Hungary had to swear in his coronation oath; not to revise or diminish the historic Imperial (Hungarian Imperial) domains of the Kingdom of Hungary. And to rule in Hungary more nearly as a western style constitutional monarch; who appointed a domestic government that was chosen by; and whose policies were those which were preferred by; the Hungarian Nobility, Magnates, and Upper Classes. These groups of Hungarians never acquiesced to granting to “their” minorities, the recognition, and local autonomy that the German Austrians had granted them in the Compromise.

In the Kingdom of Hungary several ethnic minorities faced increased pressures of Magyarization.Seton-Watson, R. W. "Transylvania since 1867." The Slavonic Review 4.10 (1925): 101–23. Further, the renegotiations that occurred every ten years often led to constitutional crises. Ultimately, although the Compromise hoped to fix the problems faced by a multi-national state while maintaining the benefits of a large state, the new system still faced the same internal pressures the old had. To what extent the Dual Monarchy stabilized the country in the face of national awakenings and to what extent it alleviated, or aggravated, the situation are debated even today, particularly by ethnic groups in the region still constructing nation-states.