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In 1860 – 61, Napoleon III made more concessions to placate his liberal opponents.
He allowed free debates in Parliament to be held and published, relaxed press censorship, and appointed the Liberal Émile Ollivier as Prime Minister in 1869.
This later period is described by historians as the " Liberal Empire ".
Napoleon acted because his popularity had declined in the face of the Italian war and a commercial treaty with Britain.
He hoped to revive parliamentary life, foster the creation of political parties, and exercise his power indirectly, by working through the parliament.
Both major parties seized upon Napoleon's concessions as an opportunity to demand wider powers, and the revival of parliamentary institutions.
Napoleon's large-scale program of public works, and his extravagantly expensive foreign policy, had created rapidly mounting government debts ; the annual deficit was about fr. 100 million, and the cumulative debt had reached nearly fr. 1 billion.
The Emperor had full control of the budget, but was managing it poorly.
He needed to restore the confidence of the business world, and to involve the legislature and sharing responsibility.
Therefore, he renounced his right to borrow money when the legislature was not in session, and agreed the budget should be voted on item by item.
Nevertheless, he retained the right to change the budget estimates section by section, thereby defeating parliamentary control and angering the parliamentarians.
The opposition formed an increasingly powerful coalition, ranging from Catholics outraged by the Papal policies to Legitimists, Orleanists, protectionists and even some republicans.
Napoleon's position was further undermined during the 1860s by his failures in foreign policy.

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