Holy Roman Empire

```

Time swiftly passed, and the Austrian army soon evacuated the Panama area, transferring control not to the Colombian Government but to the Panama local government.

To be precise, it was the Panama Independence Organization, as the original local government of Panama had long been replaced, and the Independence Organization was now in power.

The Colombian Government’s army was stopped halfway by the local militia, who refused to let them enter.

Both sides were at a standoff, and the Panama Independence Organization had not yet declared independence, citing poor military discipline as the reason for refusing the government troops’ entry.

Although Colombia was not a United States-style federation, the local governments still held considerable power, and there was precedent for refusing entry to government troops.

Fully aware that the Panama area was on the brink of independence, President Rafael Núñez could only resort to political measures before independence commenced.

Suppression was out of the question! Whoever fired the first shot now would have to bear the responsibility for initiating a civil war.

This was precisely what the Vienna Government wanted to see. If a civil war broke out just as the Austrian troops had left, it would seem quite awkward to anyone.

Moreover, the longer the delay, the better prepared the Independence Organization would be. Controlling the territory also required time; the Independence Organization had only been established for a few short months, and it was already an achievement to have set up the framework, let alone attending to internal affairs thoroughly.

...

Foreign Minister Weisenberg: "Your Majesty, the Colombian Government is once again pressing us to pay the compensation. According to the messages from the embassy, they have been surrounded by the families of the fallen soldiers for three days.

Some have even stormed the embassy district, demanding pensions. Now, even going out to purchase daily necessities has become difficult, so they have to rely on the Colombian Government to deliver them."

On hearing this news, Franz smiled slightly at the corner of his mouth. Just some protests, what great power hasn’t gone through these several times? One gets used to it after a while.

"Tell the Colombian Government to provide the identity proof of the families of the fallen soldiers, and as soon as the identities are verified, we’ll immediately disburse the pension.

The property damage was concentrated in the Panama area, and it’s the local residents that need compensation. To avoid misappropriation, we’ll directly transfer the funds to the local government."

"To the local government" for what, to wage a civil war?

If they had a choice, the Colombian Government would probably prefer not to have this compensation at all. This was not just a hot potato issue; it was lethal.

Retaliation—this was true retaliation. Compared to this, the previous conflicts and "misunderstandings" could only be seen as child’s play.

Foreign Minister Weisenberg cautioned: "Your Majesty, in order to show goodwill towards us, the Colombian Government has already relaxed trade control at the Peruvian border.

Now, if we proceed like this, I fear they will blockade the border line again, smuggling will not be able to continue, and Peru and Bolivia will..."

Franz waved his hand dismissively: "That’s a minor issue. Peru is France’s little brother, and the goods they’re purchasing are mainly French, so even if blockaded, what does that have to do with us?

As for Bolivia, haven’t we already opened a trade line with Argentina? The quantity of smuggled goods may not be much, but if they manage frugally, it should barely suffice."

The recent "misunderstanding" in Panama wasn’t just a wake-up call for Colombia; the neighboring Argentina was also frightened, and even the Chilean Government, clinging tightly to the British, was terrified.

```

This year, the countries of South America were all weak and none stood out among the so-called "three powers" of the region.

With just one "misunderstanding," Colombia’s loss of forces equaled the entire casualties of the "Bird Droppings War" over more than a year, which inevitably caused widespread panic.

Having witnessed Austria’s strength, Argentina, as a neighbor, naturally had to adjust its foreign policy. They couldn’t lift the trade embargo outright, as that would offend the British.

However, the sharp government bureaucrats of Argentina were not to be easily stumped. If open trade was not possible, they could still smuggle goods in secret.

This was a win-win situation, not only satisfying the Austrians but leaving the British with nothing to complain about, and the bureaucrats could also make a fortune in the process.

...

While Austria took action, the French were not idle either. The contemporary French Empire was much more formidable than in the original timeline. Its intimidation had not been challenged, and with French Guiana present, deterring a few South American countries was a simple task.

If the Vienna Government could persuade the Argentine Government to relax the blockade, the French could also turn a blind eye with the Brazilian Government.

In a sense, the "blockade line" concocted by the British was full of loopholes from the very beginning.

The so-called "blockade" only really prevented ordinary merchants from trading. Its actual effect was likely to reduce the influx of goods and inflate the cost for Peru and Bolivia to acquire supplies.

For powerful trading companies with strong backing, the blockade line meant nothing. As long as the profit was sufficient, no capitalist found the blockade insurmountable.

Even coastlines guarded by the Royal Navy were breached by merchant ships. With strong enough connections, they weren’t afraid of being caught.

If the British couldn’t make something happen, other countries were even less to be expected. Apart from the domestic elite, there were also numerous audacious trading companies with the support of major powers.

If caught, at most they would be turned away. Responsibility was pursued indeed, but how to proceed without provoking an international dispute?

The only country that truly enforced a strict blockade was probably Chile. When it pertained to their own economic interests, strict enforcement was unavoidable.

...

Perhaps it was the riches of the South American region, or maybe it was the weakness of its countries—whatever the reason, Napoleon IV took an interest in South America.

Seeing Austria eyeing the Panama area, Napoleon IV also wanted to expand the French South American Colonies.

It had been several years since the French involvement in external expansion, and for Napoleon IV, who was eager to surpass his predecessor, this was very unfortunate.

While the French government’s senior officials were both excited and helpless about the Emperor’s grand plan, everyone wanted to achieve great deeds and leave their name in history, but the conditions simply didn’t allow it!

Minister of Foreign Affairs, Dumbledore, advised, "Your Majesty, the current international situation is not suitable for expansion. The Prusso-Russian War is at a critical moment, and we cannot afford to divert our strength.

Based on the current circumstances, once the Prusso-Russian War concludes, there will be another reshuffling on the European Continent, presenting us with the best opportunity to expand our influence in Europe.

If it weren’t for the impending changes in Europe, the Vienna Government wouldn’t have given up the Panama area so easily, as international public opinion is not yet strong enough to make them yield."

There was no question about it, the current trend was "Eurocentrism." According to this principle, both France and Austria, the two major continental powers, had to focus their efforts on dealing with the post-war situation.

Napoleon IV shook his head, "Count, this does not contradict my plans. Colonial expansion is a long-term national policy, not something we need to launch immediately."

"What we need to do now is just the preliminary preparation. Once the dust settles on the European Continent, it won’t be too late to take action."

"This world has already been carved up. The most annoying British have acquired the richest regions; even those South European barbarians have grabbed a large piece of the cake."

"What’s left for France is just the remains of a feast. In name, we are the world’s third Colonial Empire, but in reality, everyone is well aware that it’s just a pile of sand."

"He who hesitates is lost, and now we have very few options left. Apart from East Asia, there is South America. Comparatively speaking, the South America area, with its multitude of small nations, is easier to grasp."

Expansion, expansion, and more expansion. This is not the personal desire of Napoleon IV; this is the urgent need of France’s domestic industry and commerce."

"This is the price that must be paid by an industrial powerhouse. Unaffected by the blows of the Prusso-French War, and having annexed the Italian Area, France’s industrial capacity has increased too much compared to the same historical period."

"An increase in industrial capacity doesn’t necessarily bring only good things. Along with it, there’s an urgent need for raw materials and markets for goods."

"Affected by the massive import of raw materials, the cost of French industrial and commercial products is relatively high, making them less competitive internationally."

"To solve this problem, the best solution is naturally expansion. No raw materials—take by force; no markets—take by force. In short, there is nothing that ’taking by force’ cannot solve."

After hearing this explanation, Dumbledore wanted to speak but stopped short. He intended to say that the nations of South America were not weak, but when the words reached his lips, he could not bring himself to say them.

"Strength and weakness both require comparison. Compared to France, the nations of South America are indeed too weak. Even if all these countries united, they still could not match France."

With the Emperor’s firm stance and the significant influence of the domestic pro-colonial expansion faction, sensing that matters were turning adverse, the equally antiwar Finance Minister Roy hurriedly shifted the topic:

"South America’s issues are not urgent for now. The most important matter at hand is the Prusso-Russian War. Various signs indicate that Austria has plans to annex the German Federation Empire."

"The British are unreliable. If the Prusso-Polish Federation is defeated and the Russians only achieve a Pyrrhic victory, then we are the only ones strong enough to prevent Austria and Germany from uniting."

"If the Vienna Government acts unilaterally and we must stop them, then war will be inevitable."

"Everyone has seen the horrors of the Prusso-Russian War. If we enter a war with Austria, I fear it could be even more terrible."

"To ensure victory, we must make preparations in advance. This will require a large amount of funding, something our finances cannot sustain."

This wasn’t just a bluff—Austria has always had plans to annex the German Federation, and these plans have evolved over time."

"Should there be a shift in the international situation, those plans could become reality. The Prusso-Russian War happens to present such an opportunity."

"If the Prusso-Polish Federation is victorious, then there’s nothing to say. Even if suffering heavy losses, the Berlin Government can only choose to clash with Austria head-on. This is a matter of principle with absolutely no room for compromise."

"If the Tsarist Government wins, but with heavy losses, the situation will be different."

"Russians certainly don’t want to see Austria swallow up the German Federation, but the Tsarist Government is not going to break the bank just to stop Austria."

This was determined by interest, even if Austria unified Central Europe, the Russian Empire would still be the Russian Empire, at most losing the route to expansion into Europe, which is not fatal.

The numerous loans issued by Austria weren’t given out for free, they could still influence the Tsarist Government’s decisions at critical moments.

If some interests were promised, the possibility of a compromise between the two countries was very high.

Against this backdrop, the Vienna Government had the capacity to persuade most European countries to remain neutral; the final outcome was mostly a duel between France and Austria, possibly with an unreliable United Kingdom ally.

After the accession of Napoleon IV, he basically continued his father’s economic policies, and although the pace of domestic economic development had slowed, it was overall quite good.

The Finance Minister said "no money", which really gave him a shock. Then he came to a realization,—the debt of the Paris Government had always been heavy; this was an undeniable fact.

The world’s biggest debtor was not the mighty John Bull, nor the recently rejuvenated Austria, nor Prussia and Russia, who were at war, but rather France, the dominant power of Western Europe.

There was no choice; renovating Paris, building infrastructure, reviving military equipment, expanding overseas colonies, annexing the Italian Area—all these required money.

What the Orleans Dynasty left behind was just a pile of heavy debts. Although Napoleon III revived the French economy, he was unable to change the situation of the government’s towering debts, which on the contrary increased even more.

It’s not that this economic model was bad, in fact, many future countries’ governments used public investment to stimulate the economy, following the same concept.

However, this resulted in a continuous climb in government debt. During the era of credit currency, they could still cover this deficit by increasing the currency issuance, but in the era of gold standard, they had to bear it.

Under this economic model, as the economy of France grew greatly, the government debt also increased day by day.

The total debt of the Paris Government had broken through 28 billion Francs, a figure exceeding the combined debts of Prussia and Russia and earning the title of the world’s largest debtor nation.

Of course, having a lot of debt did not mean that the Paris Government was truly poor. Not all government investments were public welfare; many investments became assets that could generate revenue, it’s just that these assets could not be liquidated in the short term.

After contemplating for a moment, Napoleon IV shook his head: "The situation in Europe is not so severe, the Austrians have not started preparing for war, which means the Vienna Government is also not ready.

Your speculations, in reality, are just possibilities. There are too many assumptions, and everything must proceed from the Russians narrowly winning the war for the subsequent events to occur.

In fact, up to this point in the Prusso-Russian war, no one can be sure of controlling the balance.

The Russians certainly have a better chance of winning, but it’s not necessarily a narrow victory. Even if the Prusso Federation loses, it’s not certain that they’ll lose everything.

The British indeed cannot be relied upon, but we’ve never counted on them, have we?

Moreover, why must we go to war with Austria? Dividing the German Federation could also be a good choice.

Don’t tell me the Austrians really want to engage in full-scale warfare with us? If a war really breaks out, it’s the British who will benefit."

A tripartite balance is the most stable structure, the main reason being: everyone is worried about "the sandpiper and the clam fight, the fisherman profits".

Compared to the isolated British, the strategic positions of both Austria and France are much worse.