The Danubian Federation is the latest incarnation of an ancient empire centred around Vienna, currently led by Volkskaiser Otto von Habsburg. Its predecessor, the Greater Habsburg Empire, spanned from Prague to Athens and from the Adriatic to the Black Sea following its victory over the Entente. However, this blind imperial ambition only exacerbated its internal problems of language, nationality and inequality. In the 1920s, the Austro-Hungarian Empire was the battlefield of one of history's bloodiest civil wars, as practically every ethnic group vied for independence or supremacy in the face of a collapsing Imperial and Royal Army. During the chaos, paramilitaries of the pan-Danubian Imperial Federal Party seized key locations in Vienna with support of the KuK Armee, and forced both the Emperor and the Imperial Council of Austria to sign the Federal Decree of 1924, which divided its territories into states, with a moderately powerful central federal government, over which the Emperor only had few powers.
Losing all of its gains from the previous war, and even some of its previous territory, not even the Federal Decree was able to solve underlying tensions. But the Danubian Socialist Party could, perhaps. They were elected in 1930, promising progress and advancement for all. The next 10 years were spent promoting public education, reconstruction, industrialisation and internal development. However, Soviet infiltrators in the DSP were able to increasingly sway the Federation towards collectivist policies, and an increasingly militaristic anti-imperialist stance. In December of 1938, the Emperor was forced to abdicate and the monarchy was abolished, with the State being reorganised into the Danubian Workers' Federation, quickly entering the South European Pact (SEUROP) as an ally of the Soviet Union. By the end of World War II, though most balkan communist states had survived, Danubia had been largely occupied by German forces.
In 1946, as part of the Second Treaty of Versailles, the Habsburg monarchy was restored and German-American investments poured into the broken federation, allowing it to recover much faster than it would have otherwise. The development of a truly democratic federal empire has created a staunch NATO ally, guided by the reborn Imperial Federal Party. What awaits the Federation, nobody knows, but it is sure to be a prosperous future.