German unity as fiasco
with each state viewing itself separate. Cartoon from Münchner Leuchtkugeln
There is, in political geography, no Germany proper to speak of. There are Kingdoms and Grand Duchies, and Duchies and Principalities, inhabited by Germans, and each separately ruled by an independent sovereign with all the machinery of State. Yet there is a natural undercurrent tending to a national feeling and toward a union of the Germans into one great nation, ruled by one common head as a national unit.
On August 6, 1806, Habsburg Emperor Francis II had abdicated the throne of the Holy Roman Empire in the course of the Napoleonic Wars with France, thereby ending the loose Empire. Despite its later name affix "of the German Nation", the Holy Roman Empire had never been a nation state. Instead its rulers over the centuries had to cope with a continuous loss of authority to its constituent Imperial States. The disastrous Thirty Years' War proved especially fatal to the Holy Roman Emperor's authority, as the mightiest entities, the Austrian Habsburg Monarchy and Brandenburg-Prussia evolved into rivaling European absolute powers with territory reaching far beyond Imperial borders. The many small city-states splintered, meanwhile. In the 18th century the Holy Roman Empire consisted of over 1800 separate territories governed by distinct authorities.
This German dualism phenomenon at first culminated in the War of the Austrian Succession and outlasted the French Revolution and Napoleon's domination of Europe. Facing the dissolution of the Holy Roman Empire, the ruling House of Habsburg proclaimed the Austrian Empire in the lands of the Habsburg Monarchy instead, retaining the imperial title. The 1815 restoration by the Final Act of the Vienna Congress established the German Confederation, which was not a nation but a loose association of sovereign states on the territory of the former Holy Roman Empire.
While a number of factors swayed allegiances in the debate, the most prominent was religion. The Großdeutsche Lösung would have implied a dominant position for Catholic Austria, the largest and most powerful German state of the early 19th century. As a result, Catholics and Austria-friendly states usually favored Großdeutschland. A unification of Germany led by Prussia would mean the domination of the new state by the Protestant House of Hohenzollern, a more palatable option to Protestant northern German states. Another complicating factor was the Austrian Empire's inclusion of a large number of non-Germans, such as Hungarians, Romanians, Serbs, Croats, and Czechs. The Austrians were reluctant to enter a unified Germany if it meant giving up their non-German speaking territories.