The Austro-Hungarian Compromise establishes the Dual Monarchy

Background. The Compromise emerged from the financial crisis following the Austro-Prussian War and the Second Italian War of Independence, which had left the Habsburg Empire on the verge of collapse in 1866. It resolved the constitutional usurpation of 1848, when Franz Joseph had arbitrarily revoked Hungarian laws without legal authority. The agreement ended the 18-year-long military dictatorship and absolutist rule over Hungary, establishing a partnership in a real union, distinct from the earlier personal union, and only partially re-establishing the kingdom's pre-1848 sovereignty and status.

Political Structure. Under the Compromise, the lands of the House of Habsburg were reorganized as a real union. The Cisleithanian (Austrian) and Transleithanian (Hungarian) states were governed by separate parliaments and prime ministers. The monarch reigned as Emperor of Austria in the Austrian half and as King of Hungary in the Kingdom, maintaining a military and diplomatic alliance between the two sovereign states.

Ratification and Coronation. The Compromise was signed by Franz Joseph and Deák. It was ratified by the restored Diet of Hungary on 29 May 1867. The constitutional settlement was completed when the Hungarian parliament accepted Francis Joseph as King. On 8 June 1867, Francis Joseph was crowned King of Hungary with the Holy Crown in Buda’s Matthias Church after taking the prescribed constitutional oath.