Chapter 607: System reform

After Christmas, Franz was busy again. There are always many things at the end of the year, the government's year-end summary, plans for the coming year, budgets ...
The following people are responsible for the specific things, but Franz still has to control the general direction. As a qualified emperor, you must guarantee control of your government.
Chancellor of the Exchequer Carl: "Your Majesty, this is the report on fiscal revenue and expenditure for this year.
The total revenue of the New Holy Roman Empire in 1875 was 865.2 billion Aegis, total expenditure was 876.4 billion Aegis, and the fiscal deficit was 1.12 million Aegis.
Austria's total fiscal revenue in 1875 was 157.4 million Aegis, total fiscal expenditure was 15504 million Aegis, and a fiscal surplus of 2.37 million Aegis.
Bavaria's total fiscal revenue of 1132 million Aegis in 1875, expenditure and income are basically the same, and fiscal revenue and expenditure are balanced.
In 1875, the Kingdom of Jerusalem's fiscal revenue was 220,000 Aegis, financial expenditure was 3.14 million Aegis, and its deficit was 2.92 million Aegis. "
Although the Austrian government is the central government of the new Holy Roman Empire, it is financially differentiated.
If the finances are not separated and the central government has a fiscal deficit, there is no way to reach out to the governments of the states for money.
Not only is it financially divided, in fact the functions of the two are also different.
The Austrian government is mainly responsible for governance in Austria, such as: collecting taxes, maintaining social order, developing the economy, education, infrastructure construction ... these are all confined to the Austrian region.
The central government is different. These specific administrative matters are the functions of the state governments and do not require their intervention.
But the central government is responsible for the entire New Holy Roman Empire. Its main functions include: mediation of relations between states, lawmaking, judicial institutions, diplomatic work, training and management of the army, currency issuance, customs duties, colonies ...
The central government's fiscal revenue is not as high as that of the state, which is also normal. Except for colonial income, the central government only has coinage taxes and customs duties.
The large colony area does not mean that the fiscal revenue is also high. It is now good, and we can basically achieve a balance of payments with a slight balance.
However, this balance only existed on paper. After working with the central government, it was consumed by local construction projects.
In the early years, the central government's deficit was severe, and the governments of the states were required to share the fiscal deficit together. It's always difficult to get money out of someone else's pocket.
At that time, the end of the year was the most painful time for the Vienna government. It is necessary to patiently do ideological work for the governments of the states and allow them to pay willingly.
With the development of the colonial economy, the central government no longer needed to pay for subsidies, and this situation changed.
This change is not what the state government wants to see. It does not require them to pay for it. It also means that their status in the empire has declined.
This is the reality of politics. With the balance of revenue and expenditure of the central government, the merger of the Austrian government and the central government is also on the agenda.
Whether you like it or not, this is an inevitable result. Otherwise, how will the colony rule after localization?
The colonies under the direct jurisdiction of the central government are no problem, but if the provinces are directly under the central government, the political status of these provinces will be on par with the state government.
There is no doubt that the African continent is so large that its potential for future development is certainly greater than that of its native land.
If the system is not integrated now and the system is finalized, these provinces will definitely develop political interests in the future.
If it is over to the era of democracy and freedom, and the decision is made by popular vote, then the emperor of Europe will become non-imperial, and it is just around the corner.
At first, the colony was placed under the empire, not Austria, the main reason was to allow the states to pay together, followed by the orthodox status to facilitate immigration in the German region.
Now that all these tasks have been completed, it is time to unload and kill the donkey. This is the reality of politics, and Franz has decided to merge the executive powers of Austria, Bavaria, and Jerusalem.
In 1875, this was the last time that the fiscal separation was settled, and it will be completely consolidated later. The government will not have to bother with this again and make two budgets.
Franz took the file and looked carefully. The coming 1875 is a good year. This is the first time that the Austrian government has had a fiscal surplus since he took office.
It's a great victory, even with a trivial two million shields.
In the years before his succession, Franz did not have any financial headaches. Until the outbreak of the First Near East War, he was able to get out of trouble by making money from the war.
Later, the pace of colonial expansion was accelerated, and the government's finances also had a long-term deficit. The best time was to break even.
Now is the era of the gold standard, not the era of credit currency. To print currency, the government must first look at the gold reserve.
To play a fiscal deficit to stimulate the economy, we must first see how much money we have in our pockets. There is no way to make up for the deficit by issuing additional currencies, and long-term deficits will increase government debt.
The government's debt carrying capacity is also limited. Once it exceeds that level, finances will be crushed.
In this regard, Greece is a negative teaching material. In the past, the government worked hard to provide benefits, without considering the consequences of fiscal deficits.
There is no doubt that the Austrian government also owed a huge amount of debt. The so-called fiscal surplus only existed on paper, and there was no spray in front of the huge debt.
A moment later, Franz closed the document: "The fiscal surplus should be used to reduce debt! Our debt pressure is still very great, and if there is an emergency, it will be very passive."
When the new Holy Roman Empire was established, the small states were worried that the central government would subsidize Austria with the imperial finances, and they would suffer.
In order to reassure everyone, Franz set the rules: the central government must not borrow, and the fiscal deficits are shared by the state governments.
The effect is very obvious. The central government's own money is not enough to spend. Every year, it must reach out to the state government. Every expense is strictly reviewed by everyone. Naturally, there is no misappropriation.
As a result, the central government's fiscal deficit has fallen on the state government. Austria has the largest body and needs the most money. In addition to the investment in its own infrastructure, debt has continued to grow.
Today, Austria's total debt is as high as 500 million Aegis, nearly 3.2 times the fiscal revenue, which is more than the external debt of the Tsarist government.
Of course, this algorithm is not reasonable. There is still some income that is not included in fiscal revenue, but it can be used to repay debt.
However, this number is still somewhat dangerous. In the period of rapid economic development, it is not a problem. It must enter a period of economic stability or even a recession, and the problem appears.
Franzetti did not mention the budget deficit of the Kingdom of Jerusalem, which was an inevitable result.
All the farmland is fallow, and the city is re-planning and building, which requires money. If Jerusalem is not a holy land, it is estimated that even the income of 220,000 Aegis is not directly invested directly.
Chancellor of the Exchequer Carl: "Yes, Your Majesty."
After a pause, Carl added: "Your Majesty, our fiscal consolidation plan has been opposed by the governments of the states, and there may be trouble in the Imperial Parliament."
The merger of the central government and Austria is a general trend, and everyone is prepared for it. Franz has already talked with the kings of the states. Generally speaking, everyone does not object.
The administrative merger is no problem. The Austrian government has been part-time central government since the beginning. In fact, the two parties have already been one.
Regarding the established facts, the governments of the states clearly understand that their opposition is invalid. Without prejudice to their own interests, everyone will acquiesce.
But the finances are different, and the governments of the states have been paying money to subsidize the central government. After finally realizing the balance of payments, they were picked peaches, and it was uncomfortable for anyone who changed them.
There is no way to compromise on this issue. If the finances cannot be consolidated, how can they be integrated?
After hesitating for a moment, Franz made the decision: "If you can't convince the governments of the states to agree, then shelve the fiscal consolidation first.
Ask Jerusalem to announce the reconstruction plan and prepare the documents. At the Imperial Conference early next year, apply to join the New Holy Roman Empire. "
The Kingdom of Jerusalem was never part of the Shinra Empire, but no one can oppose Jerusalem joining the Shinra Empire.
No Catholic country can refuse to join the Holy Land. Otherwise, the spittle of the people will allow the government to step down.
The addition of Jerusalem to the empire not only increased the discourse power of a state, but also added a major trouble.
The kingdom of Jerusalem is poor, and reconstruction has only just begun, which requires huge sums of money. There is no doubt that the Kingdom of Jerusalem itself has no money.
Reconstruction of the Holy Land is religiously correct. After joining the Shinra Empire, this cost fell on the central government. As usual, the money will eventually fall to the governments of the states.
Franz had already planned to support the reconstruction of Jerusalem by the Holy See's fundraising from around the world, for which he promised the Holy See the right to govern Jerusalem.
However, this is still in secret negotiations. The Holy See wants to take control of Jerusalem and must cooperate with Austria to stabilize the entire Middle East.
This does not prevent him from first using the huge cost of Jerusalem reconstruction to put pressure on the state governments.
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