The occupation of Bosnia and Herzegovina in 1878 had reasserted Habsburg interests in Balkan affairs. Facing the possibility of conflict with Russia in this area, Austria-Hungary had looked for an ally, with the result that in 1879 Austria-Hungary and the German Empire had joined in the Dual Alliance, by which the two sovereigns promised each other support in the case of Russian aggression. The signing of the Dual Alliance was Andrássy’s last act as foreign minister, but the alliance survived as the main element in the international position of the Habsburg monarchy until the last day of the empire. Under Andrássy’s successors, Habsburg foreign policy continued its conservative course.

In 1881 an alliance with Serbia, which after the Congress of Berlin (1878) had turned to Austria-Hungary for protection, made this Balkan state a satellite of the Habsburg monarchy. The Three Emperors’ League (comprising Russia, Germany, and Austria-Hungary) of the same year brought Russian recognition of Habsburg predominance in the western part of the Balkan Peninsula. The signatories of this alliance promised to consult one another on any changes in the status quo in the Ottoman Empire, and, while Russia was given assurances that its position regarding Bulgaria and the Straits (the Dardanelles, the Sea of Marmara, and the Bosporus) would be recognized, Austria-Hungary received from Russia the promise that there would be no objection to a possible annexation of Bosnia and Herzegovina in the future.

The Three Emperors’ League was an important element in the structure of alliances that German chancellor Bismarck set up to stabilize Europe. Having decided to rely on Austria-Hungary as the fundamental partner in international affairs, Bismarck had to try to neutralize all the areas in which the Habsburg monarchy might be drawn into a conflict. It was essential to avoid being involved in a controversy at an inopportune moment and in a region of little interest to Germany. Bismarck therefore attempted to lessen the possibility of a conflict between Austria-Hungary and Russia by making them partners in the Three Emperors’ League. And when, in 1882, Italy approached Germany to find a partner in its anti-French policy, Bismarck used the opportunity to neutralize another European trouble spot. He told the Italian foreign minister that the road to Berlin led through Vienna, with the result that the Triple Alliance (comprising Italy, Germany, and Austria-Hungary) was signed in May 1882. It was primarily a defensive treaty against a French attack on Italy or Germany. It further stated that, in the event of any signatory coming to war with another power, the partners of the alliance would remain neutral. The treaty did not settle the problems still existing between the Habsburg monarchy and the Italian kingdom, but for Bismarck it sufficed that they were neutralized.

In 1883 Bismarck acted again to reduce the danger of war in “Europe’s backyard” by arranging a defensive agreement between Austria-Hungary and Romania. The Triple Alliance and the Romanian Alliance not only strengthened the international status quo but also gave security to the internal order of the Habsburg monarchy by weakening the irredentist movements in Transylvania and the Italian parts of Austria-Hungary. (See also Irredentist.)

The deterioration of German-French relations in the following years convinced Bismarck of the indispensability of the Triple Alliance, and he made every effort to force Vienna to renew the alliance in 1887. By threatening to withdraw protection against Russian aggression, Bismarck forced the Austro-Hungarian foreign minister Kálnoky to consent to his demands, but there can be no doubt that Austria-Hungary was impeded in its national interests by having to adapt its foreign policy to the German and Italian demand for the isolation of France. Although Kálnoky succeeded during the negotiations in avoiding any new obligation in western Europe, he was less successful in defending more-immediate Austrian interests. He managed to evade the Italian request for the support of an active Italian colonial policy, but he was unable to keep Italy out of involvement in Balkan affairs. It might be that, in view of his own conservative and defensive policy, he saw an advantage in having Italy as a third partner in the maintenance of the status quo against possible Russian expansion. At any rate, it was on Kálnoky’s initiative that the original Italian demand for a declaration in favour of the status quo along the Ottoman coasts and the Adriatic and Aegean seas was extended to the interior of the Balkan Peninsula. On top of this, Kálnoky granted the Italians the right to ask for compensation in case of any change in the territorial status quo without defining this term. In a certain way, all the differences and clashes between Austrian and Italian Balkan policy in the first decade of the 20th century can be traced to the introduction of this clause (later formulated in Article VII of the treaty) at the renewal of 1887.

In the same year, Bismarck built around the Triple Alliance a system of alliances and agreements that amounted to complete isolation of France and obliged the major European powers to guarantee the status quo along the borders of the Ottoman Empire. The First and Second Mediterranean Agreements of 1887 joined Great Britain to the powers (Austria-Hungary and Italy) interested in blocking Russia from the Straits and enabled Kálnoky to abandon direct agreements with Russia. The Three Emperors’ League of 1881 was allowed to expire, and Austria-Hungary was thus left without any formal understanding with Russia. Gołuchowski, who followed Kálnoky as foreign minister in 1895, decided that direct relations with Russia should be renewed. In April 1897 Franz Joseph and Gołuchowski visited St. Petersburg. The agreements signed as a result of that initiative aimed to exclude Italy from Balkan affairs and sought to entrust preservation of the Balkan order to the bilateral cooperation of the two eastern monarchies rather than to a multilateral alliance system. Thus, the final years of the 19th century were marked by a change from static continental policy to a more dynamic world policy, and the ensuing mobility in international relations reduced the value of the Triple Alliance.

The Austro-Russian agreements of 1897 came to bear in 1903, when a major revolt occurred in Macedonia. After a meeting between Tsar Nicholas II and Franz Joseph in October 1903, their foreign ministers drafted a reform program for the Ottoman Empire. A mutual neutrality agreement was added in 1904, leaving Austria-Hungary a free hand in the event of a conflict with Italy and enabling Russia to turn and face Japan (see Russo-Japanese War).

Explicitly excluded from the agreement with Russia were Balkan conflicts. When King Alexander of Serbia was assassinated in a military revolt in 1903 and the Obrenović dynasty was replaced by the Karadjordjević, Serbian relations with the Habsburg monarchy deteriorated. The Serbs adopted an expansionist policy of unifying all South Slavs in the Serbian kingdom, and, in order to block a Serbian advance, the Habsburg monarchy applied economic pressure. In 1906 all livestock imports from Serbia into Austria-Hungary were prohibited. This conflict, the so-called Pig War, did not crush Serbia but rather pushed it into the Russian camp.

When, in 1906, Gołuchowski was replaced as foreign minister by the former ambassador to St. Petersburg, Alois, Graf (count) Lexa von Aehrenthal, a turning point in Austrian foreign policy was signaled. Aehrenthal made a belated effort to free Austria-Hungary from its submission to German interests and to engage in a dynamic Balkan policy. A first step was his proposal for the construction of a railroad through the Sandžak of Novi Pazar, a strip of land that separated Serbia from Montenegro. The combined Russian and Serbian opposition forced Aehrenthal to abandon the project temporarily and made it clear that any advance in the Balkans would probably result in war with Serbia and perhaps with Russia as well.

The danger of such a conflict arose within a short time. In July 1908, after a revolution in the Ottoman Empire, the Young Turk movement announced the reform of the Ottoman constitution. Afraid that this constitutional change could undermine the Habsburg position in Bosnia and Herzegovina, which nominally were still under Ottoman suzerainty, Aehrenthal decided to use the opportunity to fortify the Austro-Hungarian position in the Balkan Peninsula. In September 1908 he met with the Russian foreign minister, Aleksandr, Count Izvolsky, and secured, so he thought, Russian approval of the proposed annexation in return for Austria’s support in having the Straits opened to Russian warships. On October 6, 1908, the annexation was announced, immediately bringing a violent reaction from Serbia. When Izvolsky found that his plans for the Straits were opposed by Great Britain and France, he retracted his tentative support of Austria and supported the Serbian position. The situation became serious, and for a while war seemed imminent. Franz, Freiherr (baron; later Graf [count]) Conrad von Hötzendorf, the chief of the general staff of the Habsburg monarchy, who had long advocated preventive war, pushed for an aggressive move, but Aehrenthal had apparently never planned more than going to the brink of war. In March 1909 a German ultimatum forced the Russians to withdraw their support from Serbia, and, since the Turkish government had agreed to the annexation of Bosnia and Herzegovina in return for a monetary compensation, Serbia also had to come to terms with the Habsburg monarchy. The Bosnian crisis was settled, but the Serbs felt their national pride deeply wounded and continued to stir unrest in the South Slav provinces of the Habsburg monarchy.