Persian Empire 1845

Chapter 593 Austria's Movements
With the acquisition of Bank of Württemberg, Bank of Stuttgart, Bank of Munich, and the soon-to-be-acquired Bank of Baden, the major banks of the four southern states have all come under Iranian control.

Baden Bank acted swiftly, and Iran successfully completed the acquisition. A merger and restructuring then commenced. All the banks involved were either bankrupt or on the verge of bankruptcy; the restructuring process went smoothly, and all branches were renamed: SÜD.

The bank's branches covered the four states of Bavaria, Baden, Württemberg, and Hesse, with its headquarters in Munich. Iranian capital accounted for 65%, effectively giving it complete control of the southern financial sector.

All the bad debts are being dealt with, and Farid and others have entered the palace to discuss with the ministers of the various states. They have finally obtained the consent of the various states to have Süddeutsche Bank help them manage their finances.

The integration of the Süddeutsche Bank system can be considered one of Iran's boldest moves. With the north controlled by Prussian and local bankers, Iran's intervention has led the south down a different financial path from the north.

All bank employees were retained and given a raise. Their next task was to infiltrate and control industries in southern Germany and even surrounding countries.

East of Munich, the situation in Vienna was not much better. Austrian trade was severely impacted, and Franz and his cabinet worked tirelessly to stabilize the situation.

Of course, this stability refers to the fact that no one stormed the palace, unemployment increased, British and French capital fled, and in the end only Iranian capital remained loyal.

Many of the industries invested in by Iran are still operating and have become the mainstay of the Austrian economy. Moreover, further investment is expected. Franz is becoming increasingly dependent on Iran and has summoned the Iranian ambassador to prepare for a better trade agreement.

In recent years, Austria's situation has also been criticized by some intellectuals in China. In their words, Austria's hand (military) is Germany's, and its legs (economic) are Iran's. Without the help of Iran and Germany, Austria would face difficulties in its operations.

But what could Austria do? This behemoth of a nation needed external forces to function. Therefore, it could only rely on German military power and Iranian funding. Before this, Austria had only managed to maintain its status as a great power thanks to its ancestral prestige; without these supporters, who knew what it would become?

"After the British and French funds withdrew, the price of flour in Vienna tripled," the Prime Minister reported, bowing. "If it weren't for the monthly wheat shipments from Iranian caravans, people would probably have stormed the palace long ago."

Franz rubbed his throbbing temples and picked up the draft trade agreement on the table—it had been delivered by the Iranian ambassador the night before. It stated that Iran would make additional investments to build the Vienna-Munich railway, but Austria would need to open up shipping rights on the upper Danube River and allow Iran to establish duty-free trading posts in places like Lviv.

"Our textile mills and steel mills are now entirely dependent on Iranian equipment." A heated argument erupted in the study, the ministers divided into two factions: one advocating for "temperamental patience," relying on Iranian capital and technology to stabilize the economy and reorganize the military; the other feared "inviting a wolf into the house," lest Austria become a complete vassal of Iranian capital. Franz sat in the main seat, listening to the rising and falling arguments. He recalled how, just a few years ago, Austria could still navigate among the European powers thanks to the prestige of the Habsburgs, but now, it had to choose between the allure of Iranian capital.

The cabinet ministers were already seated on either side of the study, the atmosphere heavy and tense. The Foreign Minister spoke first, his voice trembling almost imperceptibly: "The Russian ambassador came to see me this morning, saying that if we get too close to Iran, it might affect the friendship of other countries."

"The Russian ambassador's 'friendship'?" Franz's voice was filled with suppressed anger as he jabbed his finger heavily at the line on "Danube shipping rights" in the draft trade agreement. "Where was Russia's friendship during our war with Prussia? We were defeated at Königgletz, and the streets of Vienna were full of wounded soldiers begging for food. The Russians only sent a consul to 'comfort' us."

The Chancellor of the Exchequer immediately rose, carrying a thick ledger to the desk: "Your Majesty, last month the Vienna textile mills' operating rate recovered to 70%, entirely thanks to the new spinning machines sent by Iran; Lviv's grain reserves are also sufficient to last until next spring. These are all tangible benefits brought by Iranian investment." He opened the ledger, pointing to a line of figures, "In contrast, Britain and France withdrew not only their funds, but also all their technical engineers; the locomotive factory in Budapest still has half an unfinished locomotive sitting idle."

"But the navigation rights on the upper Danube..." The Minister of War finally couldn't help but speak up. He was the leader of the "inviting the wolf into the house" faction. "That is our lifeline controlling the waterways of Central Europe! Once it is given to the Iranians, their merchant ships can go straight to Vienna. What if they cut off our food supply if we have a conflict with Russia in the future?"

"There's no need to worry. Hungary's vast arable land can make up for part of the shortfall. In addition, we can also import grain from Romania and Bavaria. These can all become our grain import sources."

"Right now, the only ones who can send us food are the Iranians; the only ones who can help us build railways are the Iranians." The Prime Minister paused, lowering his voice, "Right now, the only ones who can help us are Iran. Even Germany can't compare."

Franz closed his eyes and took a deep breath. He recalled his ancestors' reigns, when Austria was the dominant power in Europe, and the Habsburg flag flew throughout Central and Eastern Europe. But by his generation, the empire was already outwardly strong but inwardly weak: the calls for independence from Hungary were growing louder, national movements were erupting in Czechoslovakia and Poland, and with British and French capital flight and economic recession, if it weren't for German military aid and Iranian funding, this vast multi-ethnic empire would probably have long since disintegrated.

“Foreign Minister,” Franz suddenly spoke, his voice regaining its calm, “go and reply to the Russian ambassador, saying that Austria’s cooperation with Iran is limited to the economic sphere and will not affect the ‘traditional friendship’ with Russia.” He turned to the Prime Minister, “revise the trade agreement. The Danube River navigation rights can be granted, but Iranian merchant ships must have priority in transporting Austrian grain and industrial products; the duty-free trading post in Lviv can only engage in commodity trade and is not allowed to get involved in finance and mining.”

This is the only option for now; Austria can't be overwhelmed by Iranian capital. It needs to generate revenue domestically, but no matter how hard it tries, the rate of earning money can never keep up with the rate of spending. Money is needed everywhere; otherwise, it wouldn't have sought Iran's support.

Austria and Iran have renewed their economic agreement, with Austria further opening its domestic industries to Iran, while Iran will form a series of joint ventures with Austria. British newspapers have criticized this as an unrealistic fantasy, arguing that in the current economic climate, such companies would inevitably lose all their capital, completely violating market principles.

(End of this chapter)