changed, along with those of many of the south German states, after French emperor Napoleon III began speaking of France's need for "compensation" from its loss in 1814 and included Bavarian-held Palatinate as part of its territorial claims. Ludwig II joined an alliance with Prussia in 1870 against France, which was seen by Germans as the greatest enemy to a united Germany. At the same time, Bavaria increased its political, legal, and trade ties with the North German Confederation. In 1870, war erupted between France and Prussia in the Franco-Prussian War. The Bavarian Army was sent under the command of the Prussian crown prince against the French army. With France's defeat and humiliation against the combined German forces, it was Ludwig II who proposed that Prussian King Wilhelm I be proclaimed German Emperor (Kaiser) of the German Empire (Deutsches Reich), which occurred in 1871 in German-occupied Versailles, France. The territories of the German Empire were declared, which included the states of the North German Confederation and all of the south German states, with the major exception of Austria. The Empire also annexed the formerly French territory of Alsace-Lorraine, due in large part to Ludwig's desire to move the French frontier away from the Palatinate. Bavaria's entry into the German Empire changed from jubilation over France's defeat to dismay shortly afterward because of the direction Germany took under the new German Chancellor and Prussian Prime Minister, Otto von Bismarck. The Bavarian delegation under Count Otto von Bray-Steinburg had secured a privileged status for the Kingdom of Bavaria within the German Empire (Reservatrechte). The Kingdom of Bavaria was even able to retain its own diplomatic body and its own army, which would fall under Prussian command only in times of war. After Bavaria's entry into the Empire, Ludwig II became increasingly detached from Bavaria's political affairs and spent vast amounts of money on personal projects, such as the construction of a number of fairytale castles and palaces, the most famous being the Wagnerian-style Castle Neuschwanstein. Ludwig used his personal wealth to finance these projects, and not state funds, and the construction projects landed him deeply in debt. These debts caused much concern among Bavaria's political elite, who sought to persuade Ludwig to cease his building; he refused, and relations between the government's ministers and the crown deteriorated. At last, in 1886, the crisis came to a head. A medical commission appointed by