Battles: very hard. You fight on equal terms with the AI.

Campaign: medium or hard. On very hard diplomacy isn't working and the AI faction's attacks like madmen weakening their own position. Once you have beaten them back it becomes very easy. You will notice that at the time when you have late units the AI still has town militia and so on. On medium or hard the AI is more cautious and upgrades its castles and cities better which gives it a better chance to train better armies.