The "Greater Germans," the proponents of a German nation-state including the Germans of the Austrian Empire, organized their own society in 1862, the Reform Association, to press for their version of a united Germany. Comparing their founding declaration with that of the competing National Association, we can see that the "Greater Germans" had a more favorable opinion of the German Confederation.
An important impetus for the Greater Germans was religious and confessional conflict. A large majority of the inhabitants of the Austrian Empire were Roman Catholics and Austria had always been the Catholic Great Power in Central Europe, opposed to predominantly Protestant Prussia. Were Austria's Catholics excluded from a united, small German nation-state (as they would be in 1866), then Catholics would be a permanent minority in Germany. The September 1862 declaration of the Katholikentag, the yearly assembly of Roman Catholic clubs, organizations, and societies from across Central Europe, clearly demonstrates how Germany's Catholics linked the question of a small German versus a greater German nation-state with threats faced by the Catholic Church across all of Europe.
The government of the Austrian Empire instituted a diplomatic initiative in the early 1860s to gather support among the governments and people of the many German states for its position against both the Kingdom of Prussia and the small German nationalist movement. Part of this diplomatic initiative was the July 1863 proposal for the reform of the German Confederation. For all its evocation of German nationalism, the proposal shows the considerable difficulties the government of the multinational Austrian Empire had with the idea of a German nation-state.
The final document in this section is the famous "Blood and Iron" speech of Prussia's Prime Minister, Otto von Bismarck, which he delivered at a meeting of the budget commission of the Prussian parliament on September 30, 1862. At the time, the parliament, dominated by its liberal majority, was refusing to pass the Prussian government's military budget. In condemning the actions of the parliament's liberals, many of whom were affiliated with the National Association, Bismarck made it clear that he favored the creation of a small German state, dominated by Prussia, although not a liberal and reformed Prussia, as the National Association advocated. In effect, he was calling less for a small Germany than for the creation of a greater Prussia, which is what would happen following the war of 1866.