Hongo-Herwanese relations, although always tense, have lately reached new lows. Two developments, notably the Congress of Hongolia and a Chercagoan intervention in Danikistan, mark the sudden deterioration in relations.
In February 2005 tourists and businesspeople in Danikistan (a Hongolian mandate) noticed that several Danikistani companies had been quietly transferred so that they fell under Hongolian ownership. While Danikistan was a Middle Power exempt from a differential tax on the construction of new multinational companies, Hongolia was not.
From then on word slowly spread to the Congressional Parliament which promoted Danikistan to Major Power on March 9 in an attempt to prevent further such transfers in ownership from occurring.
When news reached Herwan, the President found these 'unfair trading practices' to be unacceptable and put forth a motion in the Congress of Hongolia to prosecute Hongolia for its actions. The Herwanese wanted the Hongolians to pay the differential tax it circumvented by seizing control of Danikistani-constructed multinationals.
Although ultimately unsuccessful, the Herwanese motion led many Hongolians to question the motives of their expansionist neighbour in Terra Exortus.
On March 27, 2005, they found further reason.
Days earlier, a Chercagoan business delegation had arrived in Danikistan. In meetings with the President of Danikistan, the head of the delegation suggested he fire the Hongolian prime minister (who carried out day-to-day rule of the country), citing the unfair trading practices for which Herwan wanted to prosecute in the Congress, as outlined earlier.
The President agreed, leading to a crisis in Hongolia. Incensed at Chercagoan intervention, which was widely perceived as a Herwanese puppet, the Head Honcho of Hongolia made an emergency telephone call to the Danikistani President. Within hours, the decision to become a Chercagoan mandate was nullified and Danikistan remained a Hongolian sphere of influence.
Because the Herwanese had sold Danikistan a year earlier when they found themselves in financial difficulty, many Hongolians saw the Chercagoan move as a veiled Herwanese diplomatic attack against their country in an attempt to take back Danikistan. Coupled with the Congress of Hongolia, it becomes clear why Hongo-Herwanese relations have stayed at historic lows during the month of April.
