The nationalistic movement in Hungary was asking for the recognition of Hungary as the equal state in relation to Austria and also stronger Italian nationalism was threatening the Hapsburg provinces in the Apennine peninsula. There was also the danger coming from Prussia in the north which already decided to fight Austria for Germany.
The Policy of Dualism was initiated on 15th of March in 1868 and so the name of The Empire of Austria – Hungary came to life. Austria and Hungary were two lands connected with only one leading person of emperor and this emperor was still hereditary denomination of ruler in both countries and common ministries were the offices of foreign affairs, ministry of war and finance as well.)
The industrial progress led to 5 % upsurge of production between the years of 1873 and 1913. The economy of Austrian part of empire was focused on town industrial areas (textile industry) and it was gradually growing. The Hungarian part focused on agricultural production (the breweries and the sugar refineries). Austria – Hungary was still very prosperous cooperative unit despite very big national tensions in its both parts. Vienna became the cradle of artistic and intellectual life. And practically, it was a little introduction to Avant - garde period in architecture, music and painting.
In 1914 (28th June) the Serbian nationalists successfully assassinated the emperor successor, Francis Ferdinand d’Este. Then the Austrian – Hungarian government gave Serbia the ultimatum which was mostly accepted but not all conditions of it. So Austria – Hungary suspended all the negotiations and proclaimed the local mobilization. Serbia was accused of active support of terrorism and on 28th of July in 1914 Austria – Hungary unleashed the war. The powers were coming to help their allies and, on the other hand, were proclaiming the war among each other as well. Germany supported Austria – Hungary and declared war on Russia and France. France was supported by Great Britain and then also by Italy.
The World War One was unleashed in Europe. Ten million people died in this four years long war and the economy in many countries was totally destroyed.
Franz Joseph I died in Vienna on 21st of November in 1916 just in the middle of the world war. The new king on the throne was Charles I but he was not able to unite various nations into one political unit and the definitive disintegration of Austria – Hungary began in October 1918.