or Ausgleich
Compact that established the dual monarchy of Austria-Hungary .
The kingdom of Hungary desired equal status with the Austrian empire, which was weakened by its defeat in the Austro-Prussian War of 1866. The Austrian emperor Francis Joseph gave Hungary full internal autonomy, together with a responsible ministry, and in return it agreed that the empire should still be a single great state for purposes of war and foreign affairs, thus maintaining its dynastic prestige abroad.