Holy Roman Empire

Compared to Austria, which was focused on calming public opinion, the Colombian government was under far greater pressure as Panama was still under Austrian military control. If they couldn’t recover it quickly, they might never get it back.

While the Austrian government had made promises, they were just that—promises. Whether those promises would be honored depended entirely on Austria’s goodwill.

In this era, the great powers had notoriously low standards. Breaking promises was so common it was almost expected. If the Austrian government decided not to follow through, Colombia lacked the strength to force compliance.

There had been plenty of precedents for such situations. If it happened again, the Colombian government would be powerless beyond issuing a few verbal protests.

After receiving Austria’s diplomatic note requesting negotiations, President Rafael Núñez had no choice but to step in personally.

This was not the time for political maneuvering or pointing fingers. If he couldn’t recover Panama, his presidency would be over and no amount of excuses or shifting blame would save him.

With both sides eager to resolve the conflict quickly and end this awkward “misunderstanding”, negotiations were approached with a sense of urgency.

Even with the British cheering on the sidelines, it was useless. The power gap between Austria and Colombia was simply too wide. Colombia had no leverage to negotiate aggressively.

While President Núñez hoped to secure better terms at the negotiating table, his greater fear was that delaying negotiations might cause the Austrian government to change its stance.

After all, international reputation is only valuable when it’s intact. If it were to be irreparably damaged and couldn’t be restored in the short term, it would essentially become worthless.

Since resistance was futile, they might as well let the situation unravel. There were plenty of historical precedents for such scenarios, and the British had the most experience with them. And yet, they were still doing just fine today.

The Austrian government was eager to quell the public outcry, mainly to minimize the damage and prevent this stain from spreading further. They wanted to resolve the issue quickly to avoid affecting their future diplomatic maneuvers.

If the situation dragged on and public opinion continued to ferment, it would become impossible to clean up the mess, and further negotiations with the Colombian government would lose all meaning.

For the British, damaging Austria’s international reputation was far more valuable than controlling a small region like Panama. However, from the Colombian government’s perspective, the outcome was the exact opposite.

With a powerful neighbor suddenly emerging next door, the Colombian government hoped that Austria would remain a principled and restrained presence.

If the Austrian government abandoned those principles, Colombia would be in serious danger. This wasn’t just about the Panama region anymore. There was a real risk to the survival of the entire Colombian Republic.

In the face of such a harsh reality, Rafael Núñez didn’t dare to gamble. No matter how much the British tried to fan the flames or promise enticing rewards, those offers were nothing compared to the threat of a gun pointed at their heads.

To prevent the “misunderstanding” from escalating further, President Rafael Núñez approached the negotiation table with genuine sincerity.

With both sides showing good faith and their demands remaining reasonable, the negotiations proceeded smoothly.

In less than a month, the two nations had reached a preliminary agreement.

On May 24, 1880, the Austrian Ambassador to Colombia, Lorella, and Colombian President Rafael Núñez signed the “Agreement on the Settlement of the Panama Accidental Firefight Incident.”

Both countries unanimously agreed that the exchange of fire was purely an accident, primarily caused by heavy foggy weather and the deliberate provocation of roaming “bandits.” Additionally, language barriers and communication failures allowed these opportunists to exploit the situation.

The culprits were the roaming “bandits” who had already been eliminated by joint forces from both nations, making it impossible to pursue accountability further.

Since the operation to eliminate the “bandits” was organized by the Austrian side, and the Colombian government participated at the invitation of the Austrian Central American colonial government, suffering significant casualties in the process, the Austrian government agreed to provide humanitarian compensation.

According to the terms of the treaty, the Austrian government would pay 3.426 million guilders in compensation to the Colombian government, including 584,000 guilders for casualty compensation and 2.842 million guilders for economic and property damages.

(Author’s Note: After the treaty was signed, both countries agreed to the handover of the Panama region within one month. All Austrian forces would withdraw by July 1, 1880. The compensation would be paid in five installments, with the option of substituting tangible assets for part of the payment.)

The exact compensation amount and payment method weren’t worth nitpicking over. For Colombia, securing any form of reparations from a great power was an unprecedented achievement in their history.

As a small nation, Colombia couldn’t afford to ask for too much. The truth behind the incident was something only idealistic dreamers would chase after.

President Rafael Núñez was a pragmatic leader. He understood that even if the full truth were uncovered, it wouldn’t change anything in reality.

Given Colombia’s limited power, they had no means to demand true justice. The only reason negotiations were possible was because the Austrian government preferred a diplomatic resolution to the issue.

If they pushed too hard and provoked Austria, the Austrian government might simply refuse to withdraw from Panama altogether, and that would be a tragedy.

Recovering lost territory and securing financial compensation was already considered the greatest diplomatic victory imaginable.

After the treaty was signed, Rafael Núñez immediately announced the good news to the public, and the Colombian people erupted in celebration.

Núñez’s previously unstable presidency, which had been hanging by a thread, was suddenly solidified. The man who was once labeled an “idiot president” was now celebrated as a national hero.

The few newspapers in Colombia elevated Rafael Núñez to near-mythical status, hailing him as the greatest diplomat in South America.

However, despite his newfound fame, the “great diplomat” didn’t display even a hint of joyful satisfaction on his face.

It was far too early to claim victory. There’s no such thing as a free lunch, and great powers don’t hand out compensation without expecting something in return. The money from Austria wouldn’t be easy to secure either.

Even though the Austrian government had made temporary concessions to calm public opinion, it didn’t mean they had abandoned their ambitions in Panama.

Staring at a map, with the green markings representing the unbuilt Panama Canal, Rafael Núñez sighed deeply.

Deep down, he silently cursed the leadership of the administration that had approved the construction of the Panama Canal.

Aside from a few plains, Panama mostly consisted of mountains and forests, with few discovered mineral resources. By all practical measures, it wasn’t even worth Austria’s interest.

The only real issue could only lie with the Panama Canal, a canal connecting the Atlantic and Pacific Oceans. Its economic and strategic value was immeasurable.

With the precedent set by the Suez Canal, everyone knew that once the Panama Canal became operational, it would become a golden artery of wealth.

Unfortunately, the Colombian government lacked the strength to control such a valuable waterway. Holding on to it was like “a child clutching a gold ingot in a bustling market.”

President Rafael Núñez understood perfectly that the blockade of Peru was merely a pretext. Austria’s true intention was to secure control over this golden waterway.

While it appeared that Austria withdrew from Panama under international pressure, in reality, this was merely the beginning, or perhaps, a trial run.

If the Panama garrison couldn’t stop the Austrian advance, no one else could either. Colombia’s future would undoubtedly be filled with hardship and uncertainty.

Opening a window and taking a deep breath of fresh air, Rafael Núñez slowly asked, “How much intelligence have we gathered on the Panama Independence Organization?”

A middle-aged man replied helplessly, “I’m sorry, Mr. President. The time was simply too short. Our people couldn’t infiltrate them in time.

The information we’ve gathered so far only comes from what they’ve publicly revealed.

Before this, we had never even heard of this organization. It seems to have connections with the former Panama Republic and is deeply tied to Austria.

Under the deliberate indulgence of the Austrian military, this organization has replaced the original Panama local government and even formed its own army.

These troops are organized as militias, primarily composed of German settlers, with officers mostly being retired Austrian military personnel.

The total strength is estimated to be around 15,000 troops. Notably, several regiments are essentially armed civilian groups, formed from recently arrived colonial settlers.”

Even though Rafael Núñez knew perfectly well that the Austrian government was secretly supporting the independence movement in Panama, he could only pretend to be ignorant.

As long as this thin veil of pretense remained intact, the Austrian government would have to consider international repercussions and could only provide covert support to the rebels, with limited resources and involvement.

But if that veil were torn away, aside from losing face, the Austrian government would most likely brazenly recognize Panama’s independence outright.

In this era, recognition by major powers was a critical step for any nation seeking sovereignty and independence.

Rafael Núñez was painfully aware that the recent blockade of Peru not only offended Austria, but also deeply angered France, Peru, and Bolivia.

If one country were to lead the way in recognizing Panama’s independence, the others would follow suit. And if the Austria and France-aligned nations joined in as well, more than half the international community might end up recognizing Panama as an independent state.

The historical precedent of the Republic of Panama, which existed before being annexed by Colombia, provided a legal and historical basis for independence. If half the world recognized Panama, then it would effectively become independent.

At that point, the military suppression of a rebellion would transform into an international war between two sovereign states which was a completely different scenario.

Rafael Núñez said, “Keep investigating! I need to know exactly who is leading the Panama Independence Organization and just how deep their ties to Austria go.

Ideally, find concrete evidence of Austria manipulating them. Without such proof, Britain won’t intervene.”

There was no other choice. Britain and Austria were still allies, bound to follow the established rules.

During the War of the Pacific, when John Bull openly supported Chile, the Austrian government only operated behind the scenes. Publicly, apart from protesting the seizure of ships, Austria mostly chose to turn a blind eye.

Just like the earlier “Panama Incident”, the British also operated covertly while the British government publicly accepted the narrative of a “misunderstanding.”

This alliance treaty served to limit the scope of conflicts and, when necessary, allowed the parties to cover for each other. This was the key reason why the Anglo-French-Austrian Tripartite Alliance remained intact.

Colombia’s hope for British intervention was essentially wishful thinking. Even with irrefutable evidence, the British government would, at most, issue a mild diplomatic condemnation.

This was determined by interests and power dynamics. The Panama Canal wasn’t operational yet. Its strategic value hadn’t materialized, making it not worth a direct confrontation with Austria.

Furthermore, in the Panama region, Britain lacked the strength to challenge Austria. Even with Colombia as an ally, they would still struggle to match Austrian power.

The Austrian Central American colonies might not seem impressive compared to European powers as they wouldn’t even rank in the top ten militarily.

However, they were a formidable force in the Americas. In terms of military strength, Austrian Central America would comfortably rank in the top five on the American continent. With secure sea routes, they might even break into the top three.

Everything is relative to the opponent. South American countries were primarily agrarian states with small populations and deep ethnic divisions, resulting in limited military capability.

…

While the Colombian people celebrated this great victory, the European media landscape was also shaken, with newspaper sales skyrocketing.

The media was divided, and opinions varied greatly. The mainstream narrative split into two camps. The supporters argued that the Austrian government’s willingness to pay compensation demonstrated a sense of responsibility and respect for the sovereignty of other nations.

The opposition, however, claimed that this was merely a political performance, a concession made under international pressure, and thus a victory for global public opinion.

However, this victory was viewed as incomplete. Critics pointed out that an act of aggression had been whitewashed as an “accidental conflict,” and the aggressor had not been adequately punished. They warned that such “misunderstandings” would likely recur in future international conflicts.

Beyond these mainstream views, there were also a variety of fringe opinions.

Some criticized the Austrian government for weakness, claiming that conceding to a small country like Colombia was a disgrace to the great powers of Europe.

…

From their respective positions, experts and scholars flooded the newspapers with arguments, engaging in heated public debates. Just how many of these voices were genuine and how many were orchestrated by interest groups remained unclear.

In the end, as the debates dragged on, the discussion drifted off-topic. It went from the “Panama accidental firefight misunderstanding” to the ongoing “Guano War”, then to the power play between Britain, France, and Austria in South America, and finally circled back to the Russo-Prussian War.

With so many topics to discuss, attention naturally shifted elsewhere. Compared to ongoing conflicts, the “Panama Incident”, already resolved, faded from the headlines, becoming old news and gradually slipping out of public view.

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