The Germanic Confederation underwent rapid economic growth in the 1860s and 1870s, surpassing France in almost every industrial category. In 1870 King Frederick William V initiated a large-scale naval construction program, and in 1873 German merchants began to penetrate French markets in Africa and Asia. These, combined with longstanding border disputes in Europe, led to the outbreak of war in November 1878.
The French military was outmatched by the Germans, and by 1879 all of France's overseas possessions had been seized by the Germans, and two German armies surrounded Paris. In November Paris suffered a series of riots, leading to the abdication of King Louis XX in early December in favor of his son, Louis XXI. However, the new king was unable to quell the growing unrest, and on 25 December the Palace of Versailles was overrun by a mob who murdered Louis XXI, his parents, and his three daughters.
German troops entered Paris on 27 December and attempted to restore order, but within days two German regiments had joined the rioters, and by the middle of January 1880 the entire German army of occupation had become demoralized and radicalized. In February, the uprisings spread to the Germanic Confederation itself, and from there to Austria and the Italian kingdoms.
The breakdown of order in both France and Germany brought an effective end to the war. Order was restored to the Germanic Confederation by March, but in France a year would pass before a republican government was established under Léon Gambetta. France would suffer recurring civil wars for the next generation, leaving the Germanic Confederation as the leading power in Europe.
Sobel's sources for the Franco-German War are Heinrich Himmelstein's The War for the World (London, 1907) and Yves Marchand's The Coming of the Franco-German War (London, 1965).