As news of Bulgaria and other nations beginning to mobilize their armies reached Venice, the Venetian government, already despairing about the war's prospects, became even more anxious.
"Negotiations through the Pope have failed; that damned Austrian refuses to make peace at any cost."
The reinforcement fleet recalled from the Aegean Sea brought no joy to the Doge of Venice, Moro; instead, it plunged him into deeper worry.
"The Genoese have become even more brazen in the Aegean and Eastern Mediterranean recently. Every day, we suffer enormous losses.
If this continues, even if the Austrians don't attack, our economy will collapse sooner or later."
The finance officials looked grim. Their current situation was worse than decades ago when the Genoese fleet blockaded the Gulf of Venice.
The Emperor's strategy of using land power to control the sea and forming alliances left them with no means of resistance.
Whether it was the Dalmatia islands or the territories in Greece, they could not abandon them. The former was a bridge connecting Venice with its Mediterranean territories, and the latter was crucial for Venice to maintain its Eastern trade.
However, the contradiction lay in the fact that the naval forces of Austria, Genoa, and Naples had gradually surpassed Venice.
Their fleet was forced to rush between several sea areas, and splitting the fleet, while solving a temporary crisis, sowed the seeds of deeper trouble.
The silver lining was that their old rivals, the Genoese, did not intend to go all out for the Emperor and fight Venice to a mutually destructive end in the Aegean Sea.
Helping the Emperor harass Venice's trade routes, while also maintaining Austria's Eastern trade routes to offset the negative impact of the embargo on Venice, was already the greatest help the Genoese could offer.
And Venice's "good ally," the Ottoman Empire, could also share some of the pressure in the Aegean Sea, and not long ago, they even provided a batch of mercenaries at a low price to support Venice's military operations in Greece.
It was through such mutual assistance that the Venetian government was able to plan an originally grand counter-offensive.
However, the Venetian government did not anticipate the defeat in the Port of Pula naval battle, which led to the fall of all three large islands near Croatia.
To retake these islands, the Venetian government was planning to withdraw troops from Corfu and the Greek coast to reoccupy these areas.
Just then, news arrived that Bulgaria and other nations had begun mobilizing their armies, making their temporarily revised plan somewhat awkward.
"The counter-offensive plan needs to be revised again," an exasperated senator sighed, spreading his hands. "I heard the Emperor has greatly strengthened the defenses on Cres Island. I'm afraid even if we withdraw all troops from Greece, we might not be able to conquer it.
Perhaps we should stick to the original plan and take Morea first."
"If we can take Morea, is it possible to use that as a condition to make peace with the Emperor?"
Someone raised this point.
Moro pondered for a moment, then shook his head, rejecting the idea: "Morea is easy pickings for us, but for the Emperor, it's an insignificant, distant dependency.
He is determined to fight us to the end and will not make peace over such a small matter."
At these words, only sighs could be heard in the meeting hall.
Even the most staunch warhawks were now deflated, feeling a sense of powerlessness, unable to exert their strength.
"If we could also inflict unacceptable losses on the Austrians, then perhaps the Emperor would be willing to make peace with us."
"We have already blockaded all Austrian ports, but this is irrelevant to the Emperor. He transports goods by land to supply these ports.
What else can we do? Should we act like pirates and raid on land?
But Treviso and Port of Pula both have Austrian standing armies stationed, and they are building even stronger coastal defenses, while our army..."
The shortcomings of Venice's old mercenary system were becoming increasingly apparent.
They ceded local tax revenues and other powers to mercenary groups to reduce the cost of mercenaries, but as for the lives of the local people... in special times, they couldn't worry about so much.
These mercenaries were incredibly greedy, but their combat capability, which might have been commendable in the past, seemed less effective after witnessing the armies of Austria and France.
However, as a maritime commercial city-state, Venice was already struggling to maintain its current scale of navy and state-owned fleet. If it also had to support a large number of mercenaries, the country would eventually collapse.
This also meant they could not compete with the Emperor on land.
"If we can't plunder Austria, what about other regions along the Adriatic Sea?"
"Like Morea, the Emperor doesn't care about their fate."
One sentence blocked all means by which the Venetians could threaten the Emperor.
"Alright, since we cannot threaten the Emperor, let's find a way to maintain our maritime advantage and wait for the opportunity to reverse the situation.
Of course, Morea can be taken; we need more resources to cope with this war."
Moro tapped the table, bringing an end to the disheartening peace talks discussion, and then introduced a new topic.
"Our previously implemented Muda system is no longer sufficient to cope with the maritime threats posed by Austria and Genoa.
In the future, the size of Muda fleets must be expanded from the original 5 to 10 merchant ships to over 20, and the number of escort warships must also be increased.
Then, several nodes in the Flanders route—Messina, Marseille, and Barcelona—will establish new Muda routes. The King of France, the Duke of Anjou, and King Juan II of Aragon have agreed to grant us more trade privileges.
In the future, a large portion of goods departing from Greece will be transported to France for sale."
The so-called Muda system was a special system upon which the Republic of Venice was founded.
They organized state-owned merchant fleets to sail on fixed routes, ensuring the efficiency and advantage of Venice's overseas trade.
They had four fixed Muda routes: Greece, Cyprus, Alexandria, and Flanders. Like four great rivers, these rivers branched into many smaller streams, which were the trade feeder lines.
Through this trade system, the Venetians ensured the safety of important goods and also provided all Venetians with an opportunity to participate in maritime trade.
Venetians with spare money could invest in goods, which would be transported via fixed trade routes to the most profitable places for sale. This way, both investors and Venetian shipowners who leased state-owned merchant ships could profit. But now, almost every investment faced a huge risk of loss. Only truly lucrative commodities, such as spice and saltpeter, would never lose money.
However, trade in these goods was monopolized by the government and the Republic's nobles, which led to increasingly difficult lives for Venetian commoners and a growing resentment towards the high-and-mighty noble oligarchs.
The war with Austria completely blocked the overland trade routes to Central Europe, and the Muda system was gradually collapsing under the impact of the war.
The strict laws regarding ship control, originally formulated to complement the Muda system, were now virtually obsolete.
For example, the prohibition on selling non-old ships to foreigners had been well enforced until the loss of all mainland territories, after which Venice could no longer maintain its large merchant fleet.
Numerous private ships facing losses were sold by their owners in all directions, rendering the ban a joke.
To sustain the Muda system, which was vital for Venice's survival, Doge Moro decided to make some changes.
Building new Muda routes, although requiring profit-sharing with the rulers at the route's destination, could carve out a new path for Venice's survival.
"But what about the Genoese? If we take the new routes, won't we have to pass through the Genoese's doorstep?"
A quick-witted senator immediately raised this question.
Previously, they primarily used the Flanders route to import textiles and other Western European goods from Flanders to sell in the East, exchanging them for high-value Eastern goods. Ultimately, all goods would converge in Venice, from where they would be transported to various parts of the continent for trade.
If new routes were opened directly from the East to the Western Mediterranean, Venice's importance would be greatly diminished. This was indeed a good way to circumvent the Austrian blockade.
However, this route would undoubtedly pass through the territory of their archenemies, the Genoese, greatly increasing the danger.
"Although the Genoese are showing signs of recovery, their power is more dispersed than ours. Their merchant ships can be seen everywhere from the Black Sea to the entire Mediterranean.
However, their naval power is considerably weaker than ours, which is why we have consistently suppressed them.
Even if our fleet is further dispersed, the Genoese cannot confront us head-on.
As for that little risk, now that half of the Dalmatia transit ports are lost and the overland trade routes are blocked, do we have any other choice?"
Moro certainly knew the risks involved, but they were already struggling to maintain Venice's trade network and had no choice but to seek alternative paths.
Moreover, he was confident that the small amount of spice trade the Genoese were involved in was nowhere near enough to satisfy the immense demands of the Habsburg Family and the entire Empire.
If the Emperor could withstand the immense domestic and international pressure and continue to intercept Venice, then he would concede; Venice's position as the ultimate hub for East-West trade would cease to exist.
But, what if the Emperor couldn't hold out much longer? At that time, they would have a chance to negotiate peace with the Emperor.
Indeed, deep down, what Moro most hoped for was to end this cruel war through peace talks.
Even if it meant reparations, ceding territory, and abandoning some rights, as long as Venice's trade network could continue, everything would be worth it.
For the state of Venice and its people, war only brought losses, endless losses; peace and diplomacy were what brought them wealth.
Unfortunately, they were too far from heaven and too close to Austria, and thus were always drawn into various regional conflicts.
Recently, some even proposed restarting the Crete immigration plan, moving the Venetian government to the island of Crete, known as the "Heart of the Republic."
Of course, this defeatist plan was ultimately not approved, but it did gain some support.
Moro had no idea what the future of the Republic would hold.
He hoped to become a heroic figure like Enrico Dandolo, leading Venice to rise again, but unfortunately, he lacked such talent, and the current environment was vastly different from when the Byzantine Empire was overthrown.
The Great Council of Venice passed this risky resolution. As long as they controlled the spice trade, the Republic had hope of survival.
Venetian diplomats and merchants stationed in important ports in the Western Mediterranean began negotiating with local powers, attempting to expand their former trade network.
Venetian trading posts in places like Marseille and Barcelona also began expansion.
Western Europe had never been Venice's core market, but now it had become the best option for Venetians to cut their losses.
Fortunately, the King of France, considering their alliance, allowed Venetians to trade there, though this benefit was not free. The reason for Aragon's assistance was much simpler: the Kingdom of Aragon was currently experiencing an unprecedented noble rebellion.
King Juan II, overwhelmed, desperately sought all forms of aid.
The Venetians promised to help Juan II protect Sicily and Sardinia from the threat of Naples, in exchange for trade rights.
The impact of this new policy would not bring immediate benefits to Venice, but as Moro expected, Austria's blockade of Venice's overland trade routes had already had a very serious impact.
The merchants of Augsburg were among the most affected. They relied entirely on Venice's transit trade—importing Eastern goods from Venice for distribution to the Empire and Nordic regions, and then transshipping Imperial goods to Venice.
Originally, Austria's maritime trade had seen some improvement, and the merchants of Augsburg saw the possibility of an alternative trade route.
However, now that Austria was facing a maritime blockade and Venice's overland trade routes were blocked, it was like going from one bottleneck to two. The Imperial merchants were the ones suffering.
Fugger, who proposed the privateering law, was now both happy and worried.
Under his management, the Fugger Family had long since transitioned into mining magnates. Although Eastern trade still brought in a good amount, it was no longer the pillar industry of their family.
He originally proposed the privateering law to develop Austria's naval power, hoping to expand his commercial Empire in the future, but the Emperor directly went to war with the Venetians.
Now, the business elites of Augsburg were all facing the dilemma of broken trade chains. Many hoped Fugger could persuade the Emperor to stop, otherwise, the merchants within the Empire might suffer.
And another core business of the Fugger Family—lending—was likely to suffer significant losses as a result.
Thus, while taking advantage of the industry downturn to acquire many high-quality assets at rock-bottom prices, Fugger also wrote a report to Laszlo.
Eyczing, who was temporarily in charge of government affairs in Vienna, was also annoyed by the constant diplomatic letters from various free cities and Imperial princes who were suffering losses, so he asked Fugger to personally go to Port of Pula to persuade the Emperor.
The war certainly had to be fought, but business also had to be done, and one couldn't indiscriminately harm the innocent, could one?