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Maria Theresia’s first set of reforms included updating and expanding the army. She also engaged in financial reform by collecting more form the territories and centralizing the
Government.
In 1745 Austria ceded Silesia to Prussia. In 1756 she ended relations with her old allay England to alley herself with Austria’s old enemy France, who was now too weak to be a direct threat to Austria.

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Austria was allied to France, Russia and Spain in the Seven Years’ War (1756-1763) and opposed Britain and Prussia. The war was fought in European colonies more than in Europe and resulted in Great Britain annexing Canada, Bengal and Florida and France transferring Louisiana to Spain. However, Austria did not gain back Silesia as she had hoped. The revenge that Maria Theresia plotted on Prussia never materialized.

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The expenses of the Seven Years War added to Austria’s existing debt. After studying the situation Maria Theresia felt that the best way to bring in more money was to improve the economy – this became the focus of her next series for reforms. Foreign workers skilled in manufacturing and artist were recruited from the Low Countries, Italian lands and Germany. Farmers from Western Europe immigrated to the severely depopulated regions in southern and eastern Hungary. Some sectors of the economy like textiles and iron making were freed from their guilds. A public education system was introduced with compulsory education implemented which consisted of elementary schools, secondary schools and normal schools to train teachers. Agrarian reforms were also introduced. A new penal code was also adapted.

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Joseph II: 1765- 1790 (2 minutes)

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In 1765 Maria Theresia made her son Joseph II (1765-1790) co-regent on the death of Holy Roman Emperor Francis Stephen but did not allow him to make major decision. Joseph was an enlightened absolutist, believing in absolute rule but holding to enlightenment ideals to bring about reforms for the people. He was a Catholic but believed in state control over religion. Joseph of course assumed control upon his mother’s death in 1780, but until then he roamed his future territories incognito posing as “Count Falkenstein” in order to gage the true condition of Habsburg subjects.