The Austro-Hungarian Empire came together in 1867 and lasted until 1918 when it was dissolved at the end of World War I. The political entity that was formed in 1867 was a method of trying to tie together the lands that were controlled by the Habsburg dynasty as a successor to the Austrian Empire that had been created in 1804.
From the end of the Napoleonic Wars, the Austrian Empire had been one of the major military and political powers in Europe, with Count (later Prince) Metternich, the leading Austrian politician, helping influence European politics through the congress system.
However, in 1848, the uprisings and revolutions that took place throughout central Europe—many of which were unsuccessful but still shook the ruling classes—forced the Habsburg rulers of Austria to try to come up with another political entity that would help hold together the Habsburg dynasty. One of the places that caused the Habsburgs the most trouble in 1848 was in Hungary, where the liberal revolution was crushed with great difficulty.
Although the Austrian Empire stayed together, Metternich was forced out of office, and Austria had to accept a military decline in spite of its size as the largest country in Europe after the Russian Empire. This military decline was clearly demonstrated by the defeat of Austria in the Austro-Sardinian War of 1859 and then the Austro-Prussian War of 1866.
Count Belcredi, the Austrian prime minister, felt that the Austrian government should make considerable political concessions to Hungary to ensure the support of the Hungarian nobility and the rising middle class yet retain Vienna as the center of the new empire. The agreement that the Austrian government eventually decided upon was the Ausgleich (kiegyezés in Hungarian), otherwise known as the Compromise of 1867.
This established the Austro-Hungarian Empire, by which there would be a union within a dual monarchy, whereby the king-emperor would be the head of the Habsburg family who would be emperor of Austria and king of Hungary, running a unified administration but under which there would be an Austrian, or Cisleithanian, government and a separate Hungarian government.
Both would have their own parliaments, each with its own prime minister. Many parts of local administration would be run separately, but there would be a common government working under the monarchy that would have the responsibility of controlling the army, the navy, foreign policy, and customs matters.
The administration of education, postal systems, roads, and internal taxation would be split between the Austrian or the Hungarian governments, depending on geography. The Compromise also led to Emperor Franz Josef II being crowned as the king of Hungary, whereby he reaffirmed the historic privileges of Hungary and also confirmed the power of the newly created Hungarian parliament.
There were also some regional concessions. This largely involved some parts of Austria, officially known as Cisleithania, such as Galicia (formerly part of Poland) and Croatia maintaining a special status.
In Croatia, the Croatian language was raised to a level equal with the Italian language, and in Galicia, the Polish language replaced the German language as the normal language of government in 1869.
This did gain support from the Poles but not from the Ukrainian minority. From 1882 Slovenia was to have autonomy, with Slovenian replacing German as the dominant official language and with the Diet of Carniola governing the region from Laibach (modern-day Ljubljana).
In Bohemia and Moravia, Czech nationalists wanted the Czech language to be adopted, and there were subsequent concessions made in 1882. There was also another problem dealing with the ethnic Serbs in Vojvodina, where the Hungarians were eager not to allow any part of their kingdom to gain any special status.
The Austro-Hungarian Empire was one controlled by the Austrian and Hungarian hereditary nobility, and this class system was to lead to many problems. The major one was the Archduke Franz Ferdinand, the nephew of Emperor Franz Josef and heir to the Austro-Hungarian throne, marrying Sophie Chotek, from a wealthy Czech family. This led to consternation at court, and the marriage was declared to be morganatic; their children could not inherit the throne.
The Austrian prime minister, Count Taaffe, until 1893, managed to maintain the support of conservatives from the Czech, German, and Polish communities—known as the Iron Ring. However, some radical Czechs agitated for more power, with demonstrations in Czech-dominated Prague leading to the city being placed under martial law in 1893.
Franz Josef had offered parliament the choice of choosing a prime minister, but the issue of nationalities so divided the legislative body that after two years of indecision, Franz Josef appointed Count Badeni, the Polish governor of Galicia, to the prime ministership.
He remained in power for two years—being ejected in 1897 with the Czechs opposing his plans for language reforms and getting the reforms repealed in 1899. Many of these problems were to become far more evident during World War I, which led to the collapse of the Austro-Hungarian Empire and its fragmentation.