By 1763, the war in Central Europe was essentially a stalemate. Frederick had retaken most of Silesia and Saxony but not the latter's capital, Dresden. His financial situation was not dire, but his kingdom was devastated and his army severely weakened. His manpower had dramatically decreased, and he had lost so many effective officers and generals that a new offensive was perhaps impossible. British subsidies had been stopped by the new Prime Minister Lord Bute, and the Russian Emperor had been overthrown by his wife, Catherine, who ended Russia's alliance with Prussia and withdrew from the war. Austria, however, like most participants, was facing a severe financial crisis and had to decrease the size of its army, something which greatly affected its offensive power. Indeed, after having effectively sustained a long war, its administration was in disarray. By that time, it still held Dresden, the southeastern parts of Saxony, the county of Glatz, and southern Silesia, but the prospect of victory was dim without Russian support. In 1763 a peace settlement was reached at the Treaty of Hubertusburg, ending the war in central Europe.
In 1763 what was the status of Austria?
facing a severe financial crisis and had to decrease the size of its army