Schuschnigg signed the 1936 German-Austrian Convention. This pact recognized Austria`s independence, but the price to pay was that Austria`s foreign policy had to be in line with that of Germany. The agreement also allowed the Nazis to hold official positions in Austria. Schuschnigg hoped it would appease Hitler. He was wrong. The meeting between Hitler and Von Papen was called at a time when Schuschnigg had virtually given up hope of reaching an agreement with the Empire. Such a decision does not concern the Rome Protocols of 1934 and their additions from 1936, nor does Austria`s relations with Italy and Hungary as partners in these protocols. Since the détente desired by both sides can only become a reality if the governments of both countries meet certain preconditions, the Austrian Federal Government and the German Government will take a series of exceptional measures to create the necessary interim situation. In September 1936, Hitler launched the four-year plan that requires a drastic increase in military spending and a Germany as self-sufficient as possible, in order to prepare the Empire to fight a world war until 1940.
 The quadrennial plan required huge investments in reichswerke steel mills, a synthetic oil development program that soon went beyond budget, and programs for the production of other chemicals and aluminum; The plan called for a policy of import substitution and industry rationalization in order to achieve its objectives, which have not been achieved.  As the four-year plan is increasingly lagging behind its objectives, Hermann Goering, the director of the four-year plan, insisted that it be connected to ensure Austria`s iron and other raw materials as a solution to the problems of the four-year plan.  The British historian Sir Ian Kershaw wrote: After the rise of violence and Hitler`s claims, Austria agreed with a union, Schuschnigg met Hitler on February 12, 1938 in Berchtesgaden to prevent the takeover of Austria. Hitler handed Schuschnigg a series of demands involving the appointment of Nazi sympathizers to positions of power in the government. The main appointment was Arthur Seyss Inquart as Minister of Public Safety with total and unlimited control over the police. In return, Hitler publicly reaffirmed the Treaty of 11 July 1936 and reaffirmed his support for Austria`s national sovereignty. Defeated and threatened by Hitler, Schuschnigg accepted these demands and implemented them.  VIENNA, July 11, 1936 (UP) – Austria and Germany today buried after 10 years of bloodshed and war for Nazi attempts to dominate the country.
Chancellor Kurt Schurschnigg and Reich Minister Franz von Papen have formally drawn up a peace treaty that could ultimately reshape the European political map. The agreement was seen as a huge contribution to European peace. It solves a problem which, with the exception of the Rhineland, was considered the greatest danger of war in Europe. It also paves the way for the powers of Western Europe to resolve their difficulties with Hitler. A great interest in the Austro-German pact because of its likely effects on Italian-German relations. Italy is the avowed protector of Austria`s independence. The way is therefore open to an Italian-German agreement. Thus, Germany, Austria and Italy would be grouped into a new European bloc. In 1936, the German boycott caused too much damage to Austria. [Clarification needed] This summer, Schuschnigg Mussolini said his country had to agree with Germany. On 11 July 1936, he signed an agreement with the German ambassador, Franz von Papen, in which Schuschnigg accepted the release of the Nazis imprisoned in Austria and Germany promised to respect Austrian sovereignty.
 Under the Austro-German Treaty, Austria declared itself a „German state“ that would always follow Germany`s foreign policy lead, and members of the „national opposition“ were allowed into the cabinet, for which the Austrian Nazis promised to stop their terrorist attacks on the government.