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Relations with Western Europe

Catherine longed for recognition as an enlightened sovereign. She refused the Duchy of Holstein-Gottorp, which had ports on the coast of the Atlantic Ocean and refrained from having a Russian army in Germany. Instead, she pioneered for Russia the role that Britain later played through most of the 19th and early 20th centuries as an international mediator in disputes that could, or did, lead to war. She acted as mediator in the War of the Bavarian Succession (1778–1779) between the German states of Prussia and Austria. In 1780, she established a League of Armed Neutrality, designed to defend neutral shipping from being searched by the British Royal Navy during the American Revolutionary War.

From 1788 to 1790, Russia fought a war against Sweden instigated by Catherine's cousin, King Gustav III of Sweden, who expected to overrun the Russian armies still engaged in war against the Ottomans and hoped to strike Saint Petersburg directly. But Russia's Baltic Fleet checked the Royal Swedish navy in the tied Battle of Hogland (July 1788), and the Swedish army failed to advance. Denmark declared war on Sweden in 1788 (the Theatre War). After the decisive defeat of the Russian fleet at the Battle of Svensksund in 1790, the parties signed the Treaty of Värälä (14 August 1790), returning all conquered territories to their respective owners and confirming the Treaty of Åbo. Russia was to stop any involvement in the internal affairs of Sweden. Large sums were paid to Gustav III and peace ensued for 20 years even in spite of the assassination of Gustav III in 1792.