Joseph was succeeded by his younger brother, Leopold II. Leopold’s reign (1790–92) was a short one, which many believe was quite unfortunate for the Habsburg monarchy because, had he lived, he might have been able to salvage many of Joseph’s reforms. In addition, evidence indicates that he planned to introduce a measure of popular representation into the Habsburg government that might have given the monarchy greater stability as it encountered the challenges of industrialization, nationalism, liberalism, and democracy that became increasingly compelling in the next century.

Prior to his accession, Leopold had gained a considerable reputation as an enlightened prince of the Italian state of Tuscany, a land ruled directly by Maria Theresa’s husband and then passed to the second Habsburg son (secundogeniture). When he became emperor, Leopold saw as his primary task ending the war with the Turks as quickly as possible. That, he believed, would relieve a great deal of the strain in domestic matters so that he could slowly implement a reform program of his own.

By the time of Leopold’s accession, the Turkish war had become somewhat complicated—not in a military sense but in a diplomatic one. In 1788 Prussia and Great Britain had formed a coalition to put pressure on Austria and Russia to conclude the war with little or no compensation. This pressure carried with it the threat of war if the two eastern empires did not comply. In 1789 Joseph had wanted to reach such an agreement, but he could not convince Kaunitz to do so, and Kaunitz still had great influence. Leopold, however, did not hesitate to cast aside the old chancellor’s advice. Two weeks after he reached Vienna, Leopold notified the king of Prussia that he sought an accommodation based on the status quo ante, an accommodation reached in April 1790. The war was effectively over, although peace with the Turks was not concluded until August 1791 (Treaty of Sistova). (See also Jassy, Treaty of.)

Initially Leopold accepted the cancellation of many of Joseph’s reforms and the increasing authority of the secret police under the guidance of Johann Anton, Graf (count) Pergen. But soon the new emperor began to twist this apparent reaction into something far more progressive. In 1790 and 1791 there came to him a number of petitions from the lower classes of society demanding redress of various grievances. Leopold welcomed these petitions and began to cite them as reasons for introducing some changes in the nature of government, including providing greater representation for the lower orders in the provincial diets and placing the police under the rule of the law, a proposal that caused Pergen to resign. In fact, Leopold adopted a proposal of Joseph von Sonnenfels, an official often considered the leading enlightened political theorist in the monarchy, to make the police a service institution rather than an instrument of control. He put them in charge of local health measures and authorized them to settle minor disputes so that people would not have to go to law courts with petty arguments.

Apparently, in early 1792 Leopold was beginning to take steps to extend representation in the provincial diets to virtually all classes in society. Clearly he did not intend to establish a constitutional monarchy, but he believed that, by drawing the nonprivileged classes into the government, he could check the resistance of the privileged classes and at the same time create a constituency that would support an improved kind of enlightened absolutism. Whatever he had in mind, however, did not come to pass, for he died prematurely on March 1, 1792.

Succeeding Leopold was his much less able but longer-lived eldest son, Francis II (known as Holy Roman Emperor Francis II until 1806 and as Francis I, emperor of Austria, from 1804 to 1835). Francis’s foremost problem was significantly different from those that had faced his father and uncle. The domestic situation was settled again, but foreign matters had become increasingly perilous owing to events in France. The French Revolution had erupted in the summer of 1789, and the initial Austrian policy had been essentially to leave France alone. Indeed, Leopold had at first made some approving remarks about the changes in France, and Kaunitz had noted that at least France would not be a serious force in international affairs for some time. The event that changed these passive responses was the flight to Varennes, when King Louis XVI and his wife, Marie-Antoinette (the youngest daughter of Maria Theresa and therefore sister of Joseph and Leopold and aunt of Francis), fled Paris in June 1791 for the safety of the Austrian Netherlands. They reached the French border town of Varennes, where they were recognized and placed under arrest; later they were returned to Paris.

The flight to Varennes proved to monarchical Europe that, despite protestations to the contrary, the French king did not approve the course of the revolution and in fact had become a prisoner of it. As a result, Leopold and King Frederick William II of Prussia issued a joint declaration (the Declaration of Pillnitz, August 1791) expressing concern about the developments in France. The French government, now acting without the king, interpreted this declaration as a threat to its sovereignty and responded with a series of provocations—answered in kind by Austria and Prussia—that led to a French declaration of war on Austria in April 1792.

The declaration of war inaugurated a period of 23 years of almost continuous conflict (or preparation for conflict) between Austria and France (see French revolutionary and Napoleonic wars). During that time Austria and France fought five wars for a total of 14 years, and Austria lost all of them but the last. At one time (1809–12), Austria was stripped of all its Italian possessions, the Austrian Netherlands, its western German lands, its access to the Adriatic Sea, and the portion of Poland that it had acquired in the Third Partition in 1795 (see Poland, Partitions of). In 1804 Francis added to his titles that of emperor of Austria, but he did so because he anticipated being stripped of his most venerated title of Holy Roman emperor, which he indeed was in 1806 at the insistence of Napoleon I (who had had himself declared emperor of France in 1804). French armies occupied Vienna twice, and in 1810 the Habsburgs had to endure the indignity of giving the hand of one of Francis’s daughters, Marie-Louise, to Napoleon in marriage.

For the first two wars, that of the First Coalition (1792–97) and that of the Second Coalition (1799–1800), Austrian policy was guided by Franz Maria, Freiherr (baron) von Thugut, the only commoner to reach the rank of minister of foreign affairs in the history of the Habsburg monarchy. Thugut was an experienced diplomat and knew France very well, and he was convinced that the French Revolution represented a threat to the traditional European powers less in ideological terms than in terms of pure military might. He believed that the revolution had somehow reinvigorated an almost moribund French state and had resurrected its military power to a surprising—and dangerous—degree. Therefore, he looked upon the war against Revolutionary, and later Napoleonic, France as akin to the wars against France in the time of Louis XIV. In other words, what was required was a coalition of the great and small European powers to resist what was fundamentally French aggression.

Regardless of his interpretation of the France he was fighting, his efforts ended in failure. In the War of the First Coalition, both Prussia and Spain dropped out in 1795, and for the next two years Austria carried the brunt of the struggle with some help from Britain. In 1797 serious defeats at the hands of the young Napoleon Bonaparte in Italy forced Austria to seek peace. By the Treaty of Campo Formio (October 1797), Austria gave up the Austrian Netherlands and Lombardy but acquired much of Venice.

Thugut was convinced that war would begin again soon, and for the next one he secured Russia as an ally. The War of the Second Coalition began in 1799 when Bonaparte was in Egypt and the French government was in crisis, and it looked for a time as if the Austro-Russian forces would win. However, a terrible defeat inflicted upon the coalition in Switzerland, followed by recrimination and blame heaped upon each ally by the other, resulted in Russia’s leaving the alliance as the campaign of 1799 ended. Thugut convinced Francis to continue the struggle, which ended in significant Austrian defeats at Marengo in Italy and at Hohenlinden in Germany in 1800 and in the ouster of Thugut himself in early 1801. Austria sued for peace, which came in the Treaty of Lunéville (February 1801), by which Austria agreed to the cession of the left bank of the Rhine to France (originally a provision of the Treaty of Campo Formio) and recognized French domination of the Austrian Netherlands, Switzerland, and Italy.

From 1801 to 1805, the Austrian government again focused on internal reform, especially in finances. The ongoing wars had cost a great deal of money, and the debt had risen to an astonishing degree. However, most of the expenses of the wars had been paid for by printing paper money, massive amounts of which were in circulation by 1801. Most merchants had accepted this paper money at face value during much of the 1790s, and there is evidence that some of it was invested in technology and industry, suggesting that Austria enjoyed at this time its first hint of industrial revolution. Unfortunately, by 1801 merchants were doubting the value of the currency they received, and inflation assumed serious proportions. From 1801 to 1805 many proposals were advanced to reduce the debt and curb inflation, but none succeeded in doing so.

The other major area of reform was military, and here hope for success seemed higher because the genuine Austrian military hero of the time, Archduke Charles, brother of the emperor, undertook the task of improving the armed forces. He reduced the time of service for all ranks, curbed harsh disciplinary measures, and introduced a number of administrative changes. Yet he firmly believed that an army of long-serving and well-drilled enlisted men was the key to success, and he did not advocate the introduction of the draft that had led to such an incredible increase in the size of the French armies since 1794.