The Kaiser dismissed British fears, but Britain did not listen and responded by increasing the size of its navy and by launching a new ship, the dreadnought. An unnecessary "naval race" ensued, costing both countries a lot of money. At the same time, the European powers were also building up their armies. Not much planning was involved - the countries were just replying to others" actions.
In 1905, the Kaiser visited Morocco, a French colony. He was disrespectful of the power of the Allies, and he made a speech to say that he supported the Moroccans in their struggle against France. Later, in 1911, the Kaiser sent a gunboat to Morocco. Britain and France could not see why he would want to do this other than to establish a naval base. Each time the Kaiser was humiliated and forced to back down. He had wanted to show that German was an important power, and wanted revenge.
However, it could be argued that the tension was no more than in previous years. Germany and Britain were on friendly terms, their agreement on the Baghdad railway outweighing their naval rivalry. Industrialists in Germany did not want a war, which might spoil the country's economic prospects. They thought that Germany would become the leading power in Europe from economic strength alone. French and British people were more concerned about Russia than they were about Germany, and a future alliance between Britain, France and Germany against Russia did not seem out of the question. Austria-Hungary was the country with the most problems just before the war. It was unquestionably a huge country and a major European power, but it was very unstable. Many groups including nationalistic Serbs, who wanted the part of Austria-Hungary in which they lived to be part of Serbia, inhabited the country. In 1908, Austria took over Bosnia and Herzegovina. Russia and Serbia would have liked to intervene, but Germany's support for Austria discouraged them.