STRUCTUAL ANALYSIS OF THE AUSTRIA=HUNGARIAN AUSGLEICH

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The Habsburg Monarchy consisted of a range of territories in the eastern half of Europe and was composed of more than 11 ethnic groups. After the loss in the war against Prussia, excluded from the unification of the German states, the Monachy was forced to reform its governing structure in order to survive.In 1867 the dynastty reached an agreement (Ausgleich) with the most powerful ethnic group, Magyars, by which the kingdom of Hungary received semiindependent status within the Monarchy. From this time the Monarchy was divided into Austrian part and Hungarian part and the so-called 'Dualist system' was thereby inaugurated. While each part of the Monarchy had independent government to reign internal affairs, foreign and military policies remained under the jurisdiction of the common ministries.Although there were always disagreements between the two parts, the Dualist system worked until the last day of the Monarchy. Hungarian part was complaining of its inferior status within the Monarchy to Austrian part, and eager to act more independently. According to the Ausgleich agreement, the representatives of both parts of the Monarchy were to meet in every ten years to assess their economic relations. These meetings gave them the opportunity to talk about various problems of the Dualist system so as to minimize the disagreement between them.