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In Magdeburg, Napoleon III secured Prussia's immediate disarmament in preparation for a peace conference. The entire nation was therefore occupied when the three sovereigns met at Frankfurt in October to discuss terms. And the terms were indeed severe.
In the Treaty of Frankfurt, Prussia lost all its possessions in the west. The provinces on the Rhine's left bank were given to Napoleon III in his capacity as the new King of Westphalia. The right bank became a Habsburg possession. To compensate their neighbour to the east, Prussia's Duchy of Posen was given to Russia as an addition to Congress Poland. Prussia was therefore permanently relegated to second-rate power.
The war had awakened Austria to the need for order in Germany. With France under Napoleon holding the Rhineland, a counter influence was clearly lacking. Therefore, the Treaty of Frankfurt decreed the abolition of the German Confederation in favour of a new German Empire, with the Austrian Emperor at its head. Napoleon III in fact submitted to the Habsburg Emperor in his capacity as King of Westphalia.
While for a moment it seemed as if the long-awaited prize of German unity had been achieved, looks were very deceiving. The new Deutsche Reich was in essence a way for Austria to disarm the smaller German states and maintain a buffer from France. All the armies of the individual German states were absorbed into the Imperial Army, ensuring Austria's supreme control.
Further south, Napoleon dissuaded the Austrians from reclaiming Lombardy from the Kingdom of Italy. A new arrangement saw France guaranteeing the borders of the nascent Italian state, as well as sending troops to garrison Rome in support of the Pope. The Austrians were understandably dismayed at the supplanting of their influence, but their gains in Germany precluded much debate.
Thus, on the surface of it, a new European order had been achieved. A Franco-Austrian alliance stabilized Middle Europe, a region stretching from the Pyrenees to Poland. Germany was subdued, Italy contained, and Russia checked in the east by a strong Austria and assertive France. But the situation was not as rosy as it seemed.
France's foothold in Germany was sure to be a bone of contention to Austria, as was their continued presence in Italy. German liberals and Protestants were sure to grow restless under their Catholic oppressor. In the east, Russia sought in vain for territorial aggrandizement, placated with the minor prize of Posen. The Balkans, meanwhile, were fast becoming a powder keg, as Constantinople struggled to maintain control over the Turks' Slavic subjects. And, above all, not a man in Europe was sure as to the extent of France's ambitions besides Napoleon III himself.
Across the sea, Victorian Britain looked with some consternation upon events on the continent. However, the recent developments would seem to assure her of the wisdom of splendid isolation. Thus, Britain stayed out of European affairs, but was ever prepared to intervene if it were necessary.