Großdeutsche Lösung

[DC Al Fine]

I think one thing you would have in that union is increased nationalism on the part of the Czechs, Magyars etc. Instead of being part of a multicultural empire, they would be subject peoples in a German empire.

Internationally, I think France & Russia would almost have to ally as such a large, powerful nation would cause anyone bordering it to become fearful.

[DC Al Fine]

Eh. In abstract, the proposal is ok, but it seems quite unrealistic. These were some of the most conservative monarchies in Europe. I just don't see them suddenly deciding to adopt the model used by American liberals. Plus you still have all the issues involved with minorities in different states.

As for racial tensions not existing, you're venturing into ASB territory. There's very few examples of racial tensions not existing anywhere there is multiple ethnicities. That said, the timeline seems  cool, so if you don't care about realism, have some fun with it.