Final answer:
Bismarck, as the German Chancellor, feared the creation of an alliance against Germany which would disrupt the balance of power he meticulously crafted through strategic alliances, such as the Triple Alliance. His policies aimed to prevent a coalition that could threaten German security and dominance in Europe. However, after his era, Germany's aggressive stance and the formation of the Triple Entente contributed to the onset of World War I.
Step-by-step explanation:
Otto von Bismarck, the German chancellor, was chiefly concerned with maintaining and strengthening the power of Prussia, later Germany, through adroit diplomacy and strategic alliances. The 'nightmare of coalitions' Bismarck feared referred to the danger of facing a coalition or alliance of other European powers that could threaten the security and dominance of Germany. Bismarck's foreign policy aimed at preventing France's isolation by aligning with other major powers, keeping potential enemies separated from each other, and ensuring that Germany remained the central power in Europe.
His foreign policy successes included the creation of the Triple Alliance between Germany, Austria-Hungary, and Italy, designed to counteract the influence of Russia and France. However, under Kaiser Wilhelm II, a more aggressive German foreign policy along with the formation of the Triple Entente between Russia, France, and Britain heightened international tensions and contributed to the ambient factors leading up to World War I.
Earlier, Bismarck had been adept at using international crises to his advantage, such as manipulating the Ems Dispatch to provoke France into declaring the Franco-Prussian War, leading to rapid German unification. Through these strategic maneuvers, Bismarck was able to shift the balance of power in Europe in favor of Germany, preventing a united front against him until his dismissal in 1890.