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Previous: The North Is Annexed
Everything goes according to the new Emperor Luitpold's plans: After conservative and Catholic parties gained a majority in the new Reichstag, he can appoint Josef Jörg, a Catholic Conservative, as chancellor.
The new government formalises its strong ties with Austria-Hungary and quickly adds an alliance with the Russian Czar, effectively recreating the "Holy Alliance" of 1815.
Building a strong imperial military is the government`s main project. Germany`s European neighbours are unsettled and increase their military spending, too.
As far as the economy is concerned, protectionist policies are pursued. The lack of external trade, together with a generally expansionist nationalism, make Germany a late but fervent participant in the race for colonies. Some parts of Africa and some islands in the Indian and Pacific Ocean soon become German colonies. To defend them - and the colonial merchant navy that trades between them and (not only) Germany - the Reich invests in enlarging its navy.
Naval build-up and colonial competition increase already existing tensions between Germany and England, while Germany`s relations with France are at an all-time low.
In 1897, the atmosphere in Europe is not unlike that of OTL 1914: tensions everywhere.
Austria-Hungary, Germany`s closest ally, is haunted by ethnic conflicts and secessionist movements it can barely contain. German generals worry: How much help could the Austro-Hungarians really be, if push came to shove? (The emperor doesn't harbor such unpleasant thoughts, though.) While Germany is allied with Russia, Austria-Hungary feels more ambivalent because Russia supports Slavic independence movements in the Balkans. Also, border disputes with Italy still simmer.
The Ottoman empire still resents having to give up the Balkans after losing the war against Russia. Although it is weakened by internal conflicts, too, and barely deals with the obnoxious Greeks, there are rumours about plans for revenge.
Italy, another late colonial power, grabs colonies in Africa, too, and has more than once come into conflict with the Ottomans over this. This may have wider implications because Italy has forged a bilateral alliance with the now Catholic-dominated Germany - an alliance which the Austro-Hungarians view with skepticism.
France is very unsettled about Germany's unification and military investments. It had seen England as its major rival for a long time, but now, surrounded by hostile colonial competitors, the French begin to turn towards Britain for an alliance, an "entente". While the British are still reserved, the French think that the more time Germany and its south-eastern allies have to build up their armed forces, the more dangerous will the situation become.
Britain also fears that the balance of power on the continent might tip. But since they do not suspect any German attack in central Europe, they consider strengthening the Ottoman empire and halting Italian, Austro-Hungarian and Russian expansion in the eastern Mediterranean region their main objective.
Any spark might ignite the powder keg. But which conflict will it be?
One or more Slavic nations start a fight in the Balkans.
Italy annexes Austrian territory in the Alps and/or at the Adriatic shore.
Italy and Germany start a common colonial expansion war against Ottoman possessions in Africa or Arabia.
France launches a pre-emptive attack on Germany.