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Do you imagine A-H to have looked like the USSR?

??? A-H spent c.2,5% of GDP on its military, the lowest figure among the Great Powers (same league as Italy). France and Russia regularly spent 4-5%, Germany and UK - c.3,5%. I cannot imagine Hitler duplicating his OTL career in a world with a surviving A-H.

You mixed up the dates - 1866/67 versus 1878 :) Yes, IMO federalisation - need not be on US model, it is enough if the individual Crown Lands get a measure of autonomy - would help save it as the country will be less dysfunctional. Three distinct military budgets passed by two parliaments...