Luxembourg Crisis

[2] The Second Schleswig War of 1864 had further advanced nationalist tensions in Germany, and, throughout 1865, it was clear that Prussia intended to challenge the position of the Austrian Empire within the German Confederation.

Although he, like most of Europe, expected an Austrian victory, he could not intervene on Austria's side as that would jeopardise France's relationship with Italy post-Risorgimento.

Assuming that Bismarck would honour his part of the agreement, the French government offered King William III of the Netherlands 5,000,000 guilders for Luxembourg.

Not only had Bismarck united much of northern Germany under the Prussian crown, but he had secretly concluded agreements with the southern states on 10 October.

Austria's Foreign Minister, Count Beust, proposed transferring Luxembourg to neutral Belgium, in return for which France would be compensated with Belgian land.

[4] With the German public angered and an impasse developing, Napoleon III sought to backtrack; he certainly did not want to appear to be unduly expansionist to the other Great Powers.

[4] The United Kingdom was more than happy to host the talks as the British government feared that the absorption of Luxembourg by either power would weaken Belgium, its strategic ally on the continent.

The liberals found the actions from the king and cabinet had endangered Dutch neutrality and almost dragged the country into a European war.