Facing defeat in the war in October 1918, the Austro-Hungarian government decided to transfer the bulk of its navy to the newly formed State of Slovenes, Croats and Serbs in order to avoid having to hand the ship over to the Allies.

After being first used to test aerial bombardment attacks, Prinz Eugen was sunk by the battleships Paris, Jean Bart, and France off Toulon on 28 June 1922, exactly eight years after the assassination of Archduke Franz Ferdinand.

However, the appointment of Archduke Franz Ferdinand – heir to the Austro-Hungarian throne and a prominent and influential supporter of naval expansion – to the position of admiral in September 1902 greatly increased the importance of the navy in the eyes of both the general public and the Austrian and Hungarian Parliaments.

[4][5] Franz Ferdinand's interest in naval affairs were largely motivated from his belief that a strong navy would be necessary to compete with Italy, which he viewed as Austria-Hungary's greatest regional threat.

[9] The origins of Prinz Eugen and the Tegetthoff-class ships can also be found in developments in the first decade of the 20th century which greatly increased the importance of sea power in Austro-Hungarian naval policy.

Furthermore, a major scandal involving the Terni steel works' armor contracts led to a government investigation that postponed several naval construction programs for three years.

After negotiations which involved the Austro-Hungarian joint ministries of foreign affairs, war and finance, the offer was agreed to by Montecuccoli, but the number of dreadnoughts constructed under this arrangement was reduced to just Tegetthoff and Viribus Unitis.

[21] In his memoirs, former Austrian Field Marshal and Chief of the General Staff Conrad von Hötzendorf wrote that due to his belief that a war with Italy in the near future was likely, construction on the battleships should begin as soon as possible.

He also worked to secure agreements to sell both Tegetthoff and Viribus Unitis to, in his words, a "reliable ally" (which only Germany could claim to be) should the budget crisis in Budapest fail to be settled quickly.

[22] Although smaller than the contemporary dreadnought and super-dreadnought battleships of the German Kaiserliche Marine and the British Royal Navy, Prinz Eugen was part of the first class of its type in the Mediterranean and Adriatic Seas.

This was done in order to rush the completion of the Radetzky-class battleships, though the looming construction of three other dreadnoughts in addition to Prinz Eugen meant the Austro-Hungarian Navy would likely have to ask the government for a yearly budget much higher than 100 million krone.

[25] A secret agreement to fund construction of Viribus Unitis and Tegetthoff, Prinz Eugen's sister ships, was struck with the Rothschild family in Austria, who owned the Witkowitz Ironworks, the Creditanstalt Bank, and had significant assets in both the Škoda Works and the Stabilimento Tecnico Triestino.

Archduke Franz Ferdinand personally courted Albert Salomon Anselm von Rothschild to obtain his family's monetary support until the government could buy Prinz Eugen's two older sister ships.

[27][28] Facing potential backlash over constitutional concerns that constructing two Tegetthoff-class battleships committed Austria-Hungary to spend roughly 120 million Krone without prior approval by either the Austrian Reichsrat or the Diet of Hungary, the deal remained secret.

The underwater protection system consisted of the extension of the double-bottom upwards to the lower edge of the waterline armor belt, with a thin 10-millimetre (0.4 in) plate acting as the outermost bulkhead.

[18] Roughly a year after Prinz Eugen's plans were drafted, Arbeiter-Zeitung, the Austrian Social Democratic Party newspaper, reported the details of the battleship to the general public.

[51][52] While relations between Austria-Hungary and Italy had improved greatly in the two years following the 1912 renewal of the Triple Alliance,[53] increased Austro-Hungarian naval spending, political disputes over influence in Albania, and Italian concerns over the potential annexation of land in the Montenegro caused the relationship between the two allies to falter in the months leading up to the war.

Even so, the necessity of ensuring that Prinz Eugen had the coal she needed in the event of an Italian or French attack or a major offensive operation resulted in her and other battleships remaining at port unless circumstances necessitated their deployment at sea.

[65][62] In early 1915 Germany suggested that Prinz Eugen and the other battleships of the Austro-Hungarian Navy conduct an attack on the Otranto Barrage in order to relieve pressure on the Ottoman Empire at the height of the Gallipoli Campaign.

Furthermore, Italian ships stationed in Venice were effectively trapped by the positioning of the Austro-Hungarian fleet, preventing them from sailing south to join the bulk of the Entente forces at the Otranto Barrage.

Horthy's strategic thinking differed from his two predecessors, and shortly after assuming command of the navy he resolved to undertake a major fleet action in order to address low morale and boredom, and make it easier for Austro-Hungarian and German U-Boats to break out of the Adriatic into the Mediterranean.

Planning to repeat his successful raid on the blockade in May 1917,[86] Horthy envisioned a massive attack on the Allied forces with Prinz Eugen and her three sister ships providing the largest component of the assault.

[88] En route to the harbour at Islana, north of Ragusa, to rendezvous with Viribus Unitis and Prinz Eugen for the coordinated attack on the Otranto Barrage, Szent István and Tegetthoff attempted to make maximum speed in order to catch up to the rest of the fleet.

Thus Emperor Karl I's government in Vienna asked the newly formed State of Slovenes, Croats and Serbs for help maintaining the fleet stationed at Pola and keeping order among the navy.

The transfer to the State of Slovenes, Croats and Serbs began on the morning of 31 October, with Horthy meeting representatives from the South Slav nationalities aboard his flagship, Viribus Unitis.

The head of the newly-established navy for the State of Slovenes, Croats and Serbs, fell to Captain Janko Vuković, who was raised to the rank of admiral and took over Horthy's old responsibilities as Commander-in-Chief of the Fleet.

She was first subject to test aerial bombardment attacks and later sunk by the French battleships Paris, Jean Bart, and France off of Toulon on 28 June 1922, exactly eight years after the assassination of Archduke Franz Ferdinand.

[104][34] Following Nazi Germany's incorporation of Austria via the Anschluss of March 1938, Adolf Hitler used Austria-Hungary's naval history to appeal to the Austrian public and obtain their support.

However, concerns over the possible insult to Italy and Benito Mussolini of naming the cruiser after the Austrian victor of the Battle of Lissa, led Hitler to adopt Prinz Eugen as the ship's namesake.

In 1919, following a series of revolutions and external interventions in Hungary from Romania, Czechoslovakia, and Yugoslavia, Horthy returned to Budapest with the National Army and was subsequently invited to become Regent of the Kingdom by parliament.