In the months that followed, Thiers criticized the Emperor's costly and doomed expedition to conquer Mexico. He also condemned the Emperor's principle of nationalities, as applied in Italy, of supporting the unification into one country of small states whose populations spoke a common language. "This principle will lead," Thiers said, "one day or the other, to a policy of race which will generate future wars." On 3 May 1866, when war seemed likely between Prussia and Austria over the Prussian annexation of Holstein, Thiers told the assembly: "If Prussia is successful, we will see the creation of a new German Empire; the Empire of Charles V which once resided in Vienna, will now reside in Berlin; an Empire which will press against our borders..." After the crushing defeat of Austria by Prussia at the Battle of Sadowa, Thiers declared, "It was France which was defeated at Sadowa." On 14 March 1867, he told the Assembly: "France has no more allies in Europe. Austria is defeated, Italy is looking for adventure, England wants to avoid the Continent, Russia is occupied with its own interests, and as far as Spain is concerned, never have the Pyrenees been so high. We have to secure an alliance with England, and rally the small states. This is a modest policy but confirms with good sense. We cannot afford to commit another error."