TheSalzburg negotiations were bilateraldiplomatic talks designed to precisely and rigorously define the practical details of the economic rapprochement between thedual Austro-Hungarian monarchy and theGermanReich.[note 1] These talks began on July 9, 1918, inSalzburg, anAustrian city close to the German–Austro-Hungarian border, and were intended above all to implement the decisions of principle imposed on EmperorCharles I and his ministers by EmperorWilhelm II and his advisors at theirmeeting in Spa on May 12, 1918. Continued throughout the summer, these negotiations were suspended on October 19, 1918, when, without having informed the German negotiators, the Foreign Minister of the Dual Monarchy,Stephan Burián von Rajecz, ordered the Austro-Hungarian delegation to interrupt its participation in the talks, which had been rendered pointless by the imminent military and political collapse of the Dual Monarchy.
At his meeting withEmperor Wilhelm II inSpa on May 12, 1918,Charles I and his ministerStephan Burián von Rajecz were forced to accept the political and economic subjection of the Habsburg Empire to theReich. This subjection took the form of a treaty between the two empires, binding them tightly together. Formally concluded on an equal footing between the signatory powers, theReich and the dual monarchy, theSpa agreements of May 12 in fact endorsed the pre-eminence of theReich and guaranteed its supremacy,[1] while theAustro-Hungarian signatories, the Emperor and his Foreign Minister,Stephan Burián von Rajecz, were forced to place the Danube monarchy in a situation of political, economic and military dependence on theReich.[2]
However, the Spa agreement, which made the dual monarchy subject to an "Austro-GermanZollverein",[2] failed to put an end to rivalries in theBalkans and Eastern Europe, or to political disagreements over the end of the conflict or the future ofoccupied Poland.[note 2][3]
At the meeting on May 12, German and Austro-Hungarian negotiators agreed to set up technical commissions to put into practice the economic and commercial provisions of the agreement in principle between the emperors.[1]
At the beginning of 1918, the Dual Monarchy was more submissive than ever to theReich and its policies, while the war effort accelerated its internal decay.
From the spring of 1915, the Dual Monarchy experienced severe food shortages, both at the front and in the rear, forcing the Austro-Hungarian government to resort to increasingly extreme means, such as hijacking food trains in transit on the Austro-Hungarian rail network.[4] These hijackings served to deepen the mistrust of theReich's political and military leaders towards their counterparts in the dual monarchy.[5]
From the summer of 1915, the Austro-Hungarian fronts were increasingly held by armies in which German divisions formed the backbone. This presence helped to reinforce the double monarchy's satellite status, preventing the Austro-Hungarians from pursuing any autonomous policy within the alliance with theReich.[6] Thus, from the end of 1916, in application of the provisions of the German–Austro-Hungarian agreement of September 6, 1916,[note 3] theAustro-Hungarian army no longer enjoyed any real autonomy, while the training of soldiers and officers led to the inculcation of the elements of military doctrine used in theImperial German Army.[7] Finally, the joint army had to deal with the return of prisoners of war captured by the Russians: exhausted, they often refused to submit and organized themselves into maquis, undermining theAustrian andHungarian governments' control over the territory of the dual monarchy.[8]
Finally, on June 9, 1918, a few weeks before the opening of German–Austro-Hungarian negotiations, theAustro-Hungarian army launched itslast major offensive of the conflict, on thePiave front, but, faced with a determined defense, suffered a serious defeat, resulting in the loss of 160,000 soldiers, killed, wounded or missing, and the last reserves of equipment of the dual monarchy.[9]
The negotiations were meticulously prepared by the various German economic policymakers, representing bothPrussia and theReich. The main participants in German politics wanted to prepare for the end of the conflict, in the best commercial interests of theReich, in these negotiations, as in all the economic policies they pursued in the spring and summer of 1918.[10]
On June 7, 1918, allGerman andPrussian government officials met under the chairmanship ofImperial ChancellorGeorg von Hertling.[11] All in favor of placing the dual monarchy under economic trusteeship, as a springboard for the establishment of a German sphere of influence in the Balkans and beyond,[note 4][12] the German officials in attendance clashed over the modalities of this takeover.[11] On this occasion, the points proposed byHans Karl von Stein,Prussian Minister of Trade, met with opposition from all the other attendants: the Chancellor,Georg von Hertling,Karl Helfferich and their advisors wanted to implement acustoms union between theReich and the Dual Monarchy.[13] Against this bloc, the representatives of the economic ministries, as well as the business community, opposed the negotiation of such a customs union, not least because of the weakness of theAustro-Hungarian krone in relation to theReichsmark. For example, Hans Karl von Stein, backed by the Prussian andReich economic ministries andReichsbank PresidentRudolf Havenstein, was hostile to any plans for acustoms union between the two empires, preferring to tie Austria-Hungary in with a long-term trade treaty.[14] Moreover, in the eyes of these economic leaders, aware of the weakness of the Austro-Hungarian economy, customs unification of theReich and the dual monarchy would favor the latter, due to its lower production costs; in their view, the Reichsbank would be forced to intervene to support theAustro-Hungarian krone, and to accept a 25%devaluation of theReichsmark to cushion the effects of the weak Austro-Hungarian currency on theReich economy, without any guarantees given the unpredictable future of the dual monarchy.[13] Acknowledging the existence of strong divergences within theReich leadership itself, a commission met on June 10, 1918, reached agreement in principle on theReich's final objective in these negotiations, but demanded the agreement of allReich administrations competent in economic and commercial matters before opening negotiations with the Dual Monarchy.[15]
Faced with this division,Stephan Burián von Rajecz, then Austro-Hungarian Foreign Minister, approached the forthcoming negotiations with great caution, at least in talks with his German counterpartRichard von Kühlmann on June 11 and 12, 1918.[15] The Austro-Hungarian representatives implicitly stated their intention to empty the May 12 agreements of their commercial aspects, and to substitute preferential customs agreements for acustoms union between theReich and the Dual Monarchy, the option favored by the German negotiators at the time.[16]
Meeting on July 9, 1918, the German and Austro-Hungarian delegations quickly drew up a joint declaration of principles, later referred to byGeorges-Henri Soutou as the "Salzburg negotiations".[17]
Negotiations initially focused on the terms of a customs agreement between theReich and thedual monarchy, as both partners wished to retain control over their own trade policies.[17]
Despite this shared desire, the German and Austro-Hungarian negotiators soon came to an agreement: a common tariff scheme was drawn up, imposing identical customs duties on the other countries, with intermediate duties for products subject to different customs duties between the two empires.[17] However, this project quickly aroused the open hostility of the agrarians, who were influential inPrussia, greatly slowing down the negotiations.[18]
Among the outstanding points, the German and Austro-Hungarian negotiators attempted to define the customs regime uniting the Balkan states, which were destined to be reorganized under German influence, and the new German–Austro-Hungarian customs bloc. Indeed, a new, independent Serbian state was to form a pole of balance in the Balkans, reorganized for the benefit of theReich; this newSerbia, however, was destined to be absorbed into theMitteleuropa[2] customs bloc. However, the precise status of the new Serbia was still up in the air, due to German–Austro-Hungarian rivalries: the Germans planned to enlarge Serbia to includeMontenegro and part ofAlbania, and to link it closely to theReich through control of its railways and theBorcoppermines; the Austro-Hungarians aspired to reconstitute a small kingdom deprived of its conquests of 1912 and 1913, while placing it under strict Austro-Hungarian political and economic tutelage.[2][19]
Despite the shared desire of theReich and Austria-Hungary to maintain control over their customs policy, each of the partners had to contend with the reservations of their respective pressure groups.
For example, theHungarian negotiators on the Austro-Hungarian delegation in Salzburg were opposed to an agreement with theReich on butcher's meat duties, as long as the equivalent agreement withAustria, pending since the conclusion of theAustro-Hungarian Compromise in 1917, had not been concluded withAustrian representatives.[20]
In addition, the Germans also developed divergent views on economic relations with the Dual Monarchy. Representatives from the German states[note 5] expressed their reservations about too close a relationship with the Dual Monarchy. Members of thePrussian cabinet, mainly those in charge of the economic ministries, considered that a customs union with Austria-Hungary could, in the long term, harm the economic interests of the Kingdom of Prussia and favor Austro-Hungarian competition, made possible by anexchange rate favorable to the dual monarchy: for this reason, the Prussians favored the introduction of preferential tariffs, regularly negotiated between the two empires.[21] TheBavarian government, which had sent a plenipotentiary to Salzburg,[note 6] showed itself to be a fervent supporter of closer ties in the field ofelectricity generation; however, representatives ofKraussMaffei, a major Bavarian company in the mechanical engineering sector,[note 7] influenced the latter, which from then on was unflinchingly opposed to any rapprochement in this field.[1]
Finally, the question of including territories controlled by the Central Powers in the German-Austrian-Hungariancustoms union was another stumbling block between theReich and the dual monarchy. The inclusion ofPoland,Romania,Bulgaria,Serbia,Montenegro andAlbania was at the heart of German–Austro-Hungarian friction: indeed, Austro-Hungarian representatives defended the devolution of Serbia and Montenegro to the Austro-Hungarian sphere of influence. However, spurred on byErich Ludendorff, the German negotiators wanted to integrate these states into the new German–Austro-Hungarian customs union that was to emerge during the Salzburg negotiations.[21]
Negotiations between the two empires failed to produce any general agreement, as theReich and the Dual Monarchy were pursuing different objectives at this stage of the conflict. At the end of the conflict, moreover, the Germans found themselves in the same situation as after theBosnian crisis, obliged both to keep the Dual Monarchy, theReich's only reliable ally, in their alliance, and to control it closely.[22]
During the summer of 1918, the Allied blockade placed theReich and the Dual Monarchy in a catastrophic economic situation. The fate of arms was unfavorable to the Central Powers, despite the ability of the German-Austrian-Hungarian armies to achieve partial victories over Allied troops, but these successes at the beginning of the first half of 1918 had no immediate effect.[23] After the failure of theGerman offensives on the Western Front and theAustro-Hungarian offensive in Italy, Austro-German units no longer showed the bite necessary for victory,[24] breaking down at the first shock or remaining incomplete due to massive desertions.[25]
The Allied blockade weakened the situation of the Central Powers even further, by suffocating their economies: starving populations were fed with food manufactured by theersatz industry, while industries working for the army were forced to supply the armies of theQuadruplice with inferior quality equipment to maintain production figures.[26]
On October 19, 1918, despite the intermediate progress achieved by the German negotiators during the session of the12th, the Austro-Hungarian negotiators informed their German counterparts of the unilateral Austro-Hungarian decision to put an end to the negotiations, which theBulgarian armistice and therapid reconquest of Serbia by the Allied armies were rendering more futile by the day.[20]
Indeed, during October 1918,Emperor andKingCharles and the joint foreign minister of the dual monarchy,Stephan Burián von Rajecz, engaged in negotiations with theAllies for aseparate armistice, tried desperately to put an end to Austro-Hungarian participation in the conflict. In addition, the two constituent parts of theHabsburg monarchy,Austria andHungary, found themselves without government:[27] on October 11, the Austrian and Hungarian governments resigned together,[28] accelerating the process of advanced dissolution of the dual monarchy, amplified by Allied victories in theBalkans and on theWestern Front, and byEmperor Charles's ill-fated initiatives to extricate his empire from the then lost conflict.[note 8][27]
Despite the failure of these negotiations, they fuelled the Rattachist movement in Austria in the 1920s.West GermanhistorianFritz Fischer emphasizes the political, economic and commercial continuities between these negotiations and the ones between theRepublican and laterHitler'sReich, on the one hand, and the successor states to the dual monarchy, notablyAustria andHungary, on the other.[19]
This view was seriously amended by Georges-Henri Soutou, based on the accounts of two of the Austro-Hungarian negotiators. Indeed, the French historian attributed to these negotiations the role of a "stone of hope for the future"[3] and, in mentioning these recollections, also recalls the interest of the diplomats taking part in these negotiations in watering down after the war the outcome of negotiations whose failure was obvious in September 1918, and in attributing this failure to the defeat of theReich by then consummated.[22]
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