Their economical positions didn’t help the fact they were a declining power. Their exclusion of the Prussian run Zollverein, in 1834, was a huge kick in the teeth and this led to their trade being blocked. The Zollverein allowed all German states (except Austria) to trade freely with each other without taxes and tariffs. This prospered trade between the states, but as Austria were excluded, they suffered big time. Without trade from fellow German states, it was almost impossible for them to stay at the top of confederation and would eventually lead to them being excluded from the confederation. Austria needed to find a different avenue for trade, but they were restricted to using the river Danube. This certainly restricted their trade boundaries and left Austria in an economical trouble by the 1850’s.
Cracks appeared in the Austrian army as nationalism swarmed through. Throughout the state and army, nationalism became a popular movement and led to a divide in their military. Nationalist refused to work with other races and led to huge collapse of the army.
Austria’s defeat to Italy in 1859 almost gave Prussia the place at the top of the confederation. They lost prestige, reputation and were severely punished financially. This defeat hit Austria hard and this caused great rifts with Prussia over their lack of intervention and support.
The Battle of Sadowa (1867) was probably the most important factor in the demise of Austria. Prussian forces defeated Austrian ones at the town and gave Prussia the win over their bitter rivals. This led to Austria being expelled from the confederation and it allowed Prussia to take over official dominance.
After Sadowa, Austria were basically forced to ausgleich with Hungary. The newly formed state, Austria-Hungary were still not strong enough to compete with Prussia, and that was the end of Austria as an influential and dominant state. The lack of strong leadership, economical support and other factors led to the demise of Austria and the possible unification of Germany.
The strength of Austria’s opposition cannot be forgotten. Prussia was a state that was committed to progression and would do all that she could to achieve this. Financially and economically, she was booming. The creation of the Zollverein is a clear advantage they had over other German states, especially Austria. Prussia was clearly aiming for the dominant role in the confederation and building the strongest, most efficient army possible. Bismarck’s coming to power in 1862 was a clear sign that Prussia wanted to be top of the game. The expertises that von Roon had were going to be integral in the unification of Germany. It became apparent that Bismarck wanted to unite Germany and it was also obvious he wanted to do it without Austria involved. Bismarck obviously had the diplomatic skills and expertise to manage the task of uniting Germany, and I believe he used them perfectly. The fact that Prussia became so strong was down to previous Minister-Presidents and Kaisers. They had brought together the structure that Bismarck inherited, but he used them to his advantage and created something.
Prussia’s military strength was excellent. They had a huge military tradition, but in the years before Bismarck came to power, they hadn’t managed to make this blossom. The fact that Prussia’s army and economy was so strong combined with the lack of power in the Austrian military or economy, allowed Bismarck to take full advantage of this situation. Prussia was also getting a steady income from the Rhineland’s coalfields. This gave Prussia the upper hand over Austria as they had the natural resources that Austria needed.
There can be no doubt that Austrian demise and their weakness can be a hugely significant factor in the unification of Germany. Their fall from power can be one of the major issues in the unification, but calling it the main factor, I feel, is wrong. Prussian superiority can also be claimed to be the most important factor, and I believe that due to Bismarck’s appointment and the resources he had at his disposal, I can be in no doubt that Germany’s main reason in it’s formation is the strength Prussia had. Prussia could also be held responsible for the demise of Austria, as they gave no support during the war with Italy (despite offering) and their exclusion from the Zollverein is undoubtedly the reason why they collapsed financially.