The absorption of South Germany in the German empire took away the chief cause for friction; and from that time warm friendship, based on the maintenance of the established order, has existed between the two empires. Austria gave up all hope of regaining her position in Germany; Germany disclaimed all intention of acquiring the German provinces of Austria. Beust's retirement in 1871 put the finishing touch on the new relations. His successor, Count Andrássy, a Hungarian, established a good understanding with Bismarck; and in 1872 the visit of the emperor Francis Joseph, accompanied by his minister, to Berlin, was the final sign of the reconciliation with his uncle. The tsar was also present on that occasion, and for the next six years the close friendship between the three empires removed all danger of war. Three years later the full reconciliation with Italy followed, when Francis Joseph consented to visit Victor Emmanuel in Venice.

The outbreak of disturbance in the Balkans ended this period The Eastern question. of calm. The insurrection in Bosnia and Herzegovina immediately affected Austria; refugees in large numbers crossed the frontier and had to be maintained by the government. The political problem presented was a very difficult one. The sympathy of the Slav inhabitants of the empire made it impossible for the government of Vienna to regard with indifference the sufferings of Christians in Turkey. Active support was impossible, because the Hungarians, among whom the events of 1848 had obliterated the remembrance of the earlier days of Turkish conquest, were full of sympathy for the Turks. It was a cardinal principle of Austrian policy that she could not allow the erection of new Slav states on her southern frontier. Moreover, the disturbances were fomented by Russian agents, and any increase of Russian influence (for which the Pan-Slav party was working) was full of danger to Austria. For a time the mediation of Germany preserved the good understanding between the two eastern empires. In 1875 Andrássy drafted a note, which was accepted by the powers, requiring Turkey to institute the reforms necessary for the good government of the provinces.

Turkey agreed to do this, but the insurgents required a guarantee from the Powers that Turkey would keep her engagements. This could not be given, and the rebellion continued and spread to Bulgaria. The lead then passed to Russia, and Austria, even after the outbreak of war, did not oppose Russian measures. At the beginning of 1877 a secret understanding had been made between the two powers, by which Russia undertook not to annex any territory, and in other ways not to take steps which would be injurious to Austria. The advance of the Russian army on Constantinople, however, was a serious menace to Austrian influence; Andrássy therefore demanded that the terms of peace should be submitted to a European conference, which he suggested should meet at Vienna. The peace of San Stefano violated the engagements made by Russia, and Andrássy was therefore compelled to ask for a credit of 60 million gulden and to mobilize a small portion of the army; the money was granted unanimously in the Hungarian Delegation, though the Magyars disliked a policy the object of which appeared to be not the defence of Turkey against Russia, but an agreement with Russia which would give Austria compensation at the expense of Turkey; in the Austrian Deputation it was voted only by a majority of 39 to 20, for the Germans were alarmed at the report that it would be used for an occupation of part of the Turkish territory.

The active share taken by Great Britain, however, relieved Bosnia and Herzegovina. Austria from the necessity of having recourse to further measures. By an arrangement made beforehand, Austria was requested at the congress of Berlin to undertake the occupation and administration of Bosnia and Herzegovina - an honourable but arduous task. The provinces could not be left to the Turks; Austria could not allow them to fall under Russian influence. The occupation was immediately begun, and 60,000 Austrian troops, under the command of General Philippovich,[8] crossed the frontier on the 29th of July. The work was, however, more difficult than had been anticipated; the Mahommedans offered a strenuous resistance; military operations were attended with great difficulty in the mountainous country; 200,000 men were required, and they did not succeed in crushing the resistance till after some months of obstinate fighting. The losses on either side were very heavy; even after the capture of Serajevo in August, the resistance was continued; and besides those who fell in battle, a considerable number of the insurgents were put to death under military law.

The opposition in the Delegations, which met at the end of the year, was so strong that the government had to be content with a credit to cover the expenses for 1879 of less than half what they had originally asked, and the supplementary estimate of 40,000,000 gulden for 1878 was not voted till the next year. In 1879 the Porte, after long delay, recognized the occupation on the distinct understanding that the sovereignty of the sultan was acknowledged. A civil administration was then established, the provinces not being attached to either half of the empire, but placed under the control of the joint minister of finance. The government during the first two years was not very successful; the Christian population were disappointed at finding that they still had, as in the old days, to pay rent to the Mahommedan begs. There were difficulties also between the Roman Catholics and the members of the Greek Church. In 1881 disturbances in Dalmatia spread over the frontier into Herzegovina, and another expedition had to be sent to restore order. When this was done Benjamin de Kallay was appointed minister, and under his judicious government order and prosperity were established in the provinces.