Holy Roman Empire

Stockholm, once it became the capital of the Nordic Federation, this ancient city was once again infused with fresh vitality; the nickname "Northern Venice" is well deserved.

Its beautiful scenery and unique Nordic charm add a special flavor to the city, leaving a lasting impression.

No matter how pleasant the scenery is, it could not move Philip Francis Thomas. As an official of the Russian Ministry of Foreign Affairs, Francis had always been full of pride.

However, the pride he held was ultimately defeated by reality. Ever since he accepted this task, his spirit had been crushed.

To win the new round of Prusso-Russian Wars, the Tsarist Government not only sought to raise funds from England, France, and Austria but did not overlook the closely connected Nordic Federation either.

Of course, Francis’s main task was not to raise money; it was more about keeping the Nordic Federation stable to prevent this old adversary from stabbing them in the back at a crucial moment.

The unification of the Nordic three countries was not a simple 1+1+1=3 situation. After complementing each other’s strengths and weaknesses, the Nordic Federation had become a self-sufficient system, comparable in comprehensive national power to that of Prussia twenty years earlier.

Recalling the old rivalry with Sweden for dominance in Northern Europe, the Tsarist Government dared not underestimate this potential opponent and ultimately decided to first pacify this old adversary.

For diplomats, this is undoubtedly a thankless job. There is no choice but to make concessions in the face of harsh reality.

Having personally experienced the last war, Francis was aware that the advantages of the Russian Empire over the Prusso Federation were not as significant as the government propaganda claimed.

To some extent, the Nordic Federation already possessed the strength to influence the balance of power. To win this war, the Tsarist Government had already given up on saving face.

It was not only about pacifying the Nordic Federation; all their neighbors were targets for their overtures. They did not seek these neighbors’ support, simply their neutrality would suffice.

With a heavy heart, Francis, as the Tsar’s special envoy, entered the Foreign Ministry of the Nordic Federation. Unlike his previous visit, he no longer had the capital to be arrogant.

...

Francis, "Count, we are quite sincere this time. The Russian Empire is willing to use the Finnish territory as collateral in exchange for a loan of 800 million Krone.

We can make a commitment that half of the funds from this loan will be used to import goods from your country. The interest rate will follow the international commercial loan conventions at six percent annually, with principal and interest paid in annual installments."

The currencies of Denmark, Norway, and Sweden are all the Krone, and their value is the same (1 Krone is approximately equivalent to 0.4 grams of gold). After the establishment of the Nordic Federation, there naturally was no need to change the currency name.

"Your Excellency, the special envoy, you’re overestimating us too much. The Nordic Federation is just a small country, not as affluent as yours; not to mention 800 million, we can’t even come up with 100 million," says Carla Valenti, the Foreign Minister of the Nordic Federation, decisively refusing.

Francis was not angered, for the observant man had already noticed that the moment Carla Valenti heard about using Finland as collateral, her eyebrows twitched, although she quickly masked it over.

This was an expected reaction; ever since the formation of the Nordic Federation, the calls within the nation to reclaim Finland had been growing louder.

Militarily reclaiming Finland was unrealistic. The Russian Empire was not a foe that the Nordic Federation could challenge; the disparity in strength was too great.

Moreover, with a pro-Russian Denmark within, rashly starting a war could very well split this fragile new government apart.

If they used economic means to reclaim Finland, however, the situation would be entirely different.

The Danish government would not refuse the return of Finland, for a strong Nordic Federation could help them regain the lost Two Principalities.

Indeed, the Nordic Federation is a national alliance built on mutual compromises. It was established with the support of the major powers while the Russian Empire was in a period of weakness.

Under such a background, when the government conducts domestic and foreign policies, they must also take into account the interests of all parties. For example: Sweden supports Denmark’s efforts to regain the Two Principalities, in exchange for Danish support for Sweden’s reclamation of Finland.

Of course, all this is contingent on having enough power. Although the Nordic Federation is a small country, it also has a historical foundation, and coupled with a comfortable natural environment, strategically, everyone tends to be conservative.

In other words: If they are strong enough and the opportunity arises, they will reclaim lost territories; if not strong enough, then they must endure for the time being!

The Prusso-Russian War is the opportunity they have been waiting for. Oscar II’s strategy is simple: kick whoever loses while they are down.

The problem is quite clear. If the Prusso Federation loses, the country might not even exist anymore, naturally unable to prevent the actions of the Nordic Federation; if the Russian Empire loses the war, they won’t be much better off, and the Finnish territories will definitely not be retainable.

The Tsarist Government’s willingness to use the Finnish territory as collateral was also based on this reasoning. After all, if they lose the war, they wouldn’t be able to hold onto Finland anyway, so it’s better to use it to stabilize the Nordic Federation first.

Francis, "Count, you are being too modest. With your country’s economic strength, a measly 800 million Krone is truly a trifling matter.

As far as I know, your government’s revenue this year alone amounts to 3.2 billion Krone, and just the liquidity in the Stockholm Financial Market exceeds 8.4 billion Krone.

Your country’s banks are fully capable of handling this loan."

800 million Kroner is equivalent to: 87.43 million Divine Shields, or 43.715 million British Pounds. For any nation, this is a colossal sum of money.

Francis put forth this figure with reason. Although Finland is not a small area, it remains a bitterly cold part of Northern Europe and is considered quite barren in this era.

The Russians also have plenty of such barren lands; they wouldn’t pay it such attention if not for its high strategic value.

In this age where might makes right, the European Continent is far from peaceful, and small countries have no sense of security, with everyone trying to strengthen themselves as much as possible.

The Nordic Federation has set its sights on Finland, not just because of nationalist factors, but more because there are no better options.

Carla Valenti shook her head, "Your Excellency, loans require consideration of risk. Your government’s financial situation has always been poor, and it might go to war with the Prusso Federation at any time.

Once war breaks out, your country’s debt repayment capacity will definitely be compromised, eventually relying only on collateral for reimbursement.

The Finnish region is too barren, with fiscal revenue barely covering expenses. Without sufficient mineral resources, relying on selling timber, how long would it take to recover the cost?

A hundred years, or two hundred? We can’t wait that long."

Being rejected was not unexpected, having a negotiation began was already half a success, indicating that the Nordic Federation was indeed intrigued.

Francis’s mission was to stabilize the Nordic Federation, not actually to borrow a specific amount of money. To raise funds for war, solutions must still be sought from England, France, and Austria; other countries are simply too poor.

After the inconclusive probing inquiry, Francis took his leave, leaving Carla Valenti quietly fretting.

Though a pie falling from the sky is good, one must consider whether it is poisoned. The Russians are not an easy adversary; trying to take advantage of them could easily backfire.

...

In the Palace, upon receiving this news, Oscar II’s first reaction was not joy but alarm.

After pondering for a moment, Oscar II voiced his concern, "What if the Russians win the war and then refuse to honor their commitments?"

No way around it, the Tsarist Government’s credibility is indeed that stellar. If the war is lost, Russia will certainly honor the commitments, because they would neither have the money to pay back the debt nor the strength to hold onto Finland.

But winning the war is a different matter; even though the Tsarist Government is mostly still insolvent, it doesn’t stop them from daring to default!

At that moment, if the Tsar declines to pay the debt and also refuses to hand over the Finnish region, then they would be in a fix.

They couldn’t possibly use force to collect debts, right?

This is a method reserved for strong countries to collect debts from weaker ones; it simply does not work the other way around.

Foreign Minister Carla Valenti uncertainly said, "That shouldn’t happen! The Tsarist Government is raising funds for the war, not only borrowing from us but also from Austria.

If the Tsarist Government defaults..."

Before she could finish her sentence, Countess Carla Valenti herself did not believe it. Borrowing money from Austria and from the Nordic Federation are two entirely different concepts. Find more adventures on NovelBin.Côm

If the Tsarist Government were to default on Austria’s debts, they would have to think thrice and consider the political risks and potential countermoves from the Vienna Government.

It’s different with the Nordic Federation; a default would just be a default. At least Carla Valenti could not find any countermeasures they could take.

No doubt about it, lending money to the Tsarist Government is far too risky, already far exceeding the risk tolerance of the Nordic Federation.

After a prolonged silence, Oscar II said, "Continue negotiations with Russia. No matter what, this is an opportunity.

Being able to reclaim the Finnish region through economic means is something we simply cannot refuse. Right now, the most important thing is to minimize the risk.

Since Russia has proposed a loan, they surely have measures that would reassure us. For example, if a third party provides a loan guarantee."

"If the Tsarist Government could persuade one of England, France, or Austria to provide a guarantee for the fulfillment of the debt, it might be worth considering."

The Tsarist Government might not care about credibility, for theirs is already poor. It’s different for England, France, and Austria; their credibility in economic matters is top-notch, not something that can be bought with merely 800 million Kroner.

...