"...Popes generally not known for their youthfulness as it was, but nonetheless 65 was early to die, and Gregory XVII's passing in the Apostolic Palace caught the Curia entirely by surprise. His health had been fragile but not acutely so, and just weeks before his death he was working robustly in appointing bishops and cardinals and overseeing the reconstruction of the Sistine Chapel, a huge priority for him that became the lasting legacy of his papacy.
The following conclave that would convene in early April of 1918 was quite different from the Christmas Conclave that had elected Gregory XVII just over four years earlier. A number of liberal cardinals had died in the interim, and most of them had been replaced not even by theological moderates but conservatives often handpicked by de Lai. As such, as the conclave opened, the idea that Gaetano de Lai - too extreme to be papabile just four years ago - could credibly emerge as Pope from the proceedings was hardly far-fetched, even if it made the liberal minority and a great many moderates in the middle otherwise uncomfortable with modern secularizing trends across Europe wince. As revealed four years prior, once a man began to build momentum, it was often hard to stop.
Then again, there was another old saying - that a cardinal who enters the conclave as the favorite rarely leaves it as Pope, and de Lai's day still required a vote. As the power behind the papal throne in Rome for four years and a patron of many of those gathered as the conclave opened on April 2, de Lai was perhaps more than a little privately arrogant coming into the scrutiny, and in accordance with Church tradition he did not campaign on his own behalf amongst the Italian cardinalate in the weeks between his friend and ally's death and the conclave. Had he done so, he likely would have turned a great many off, but perhaps also detected the skepticism amongst them.
The protagonist of attempting to defeat de Lai was an unexpected one - the septuagenarian, Irish-born Archbishop of New York, John Murphy Farley. Farley was a moderate and had made great strides to forge the American Church, perhaps by necessity, into a "broad church" welcome to those of all stripes, and had been a remarkable innovator of Catholic education in the New York Archdiocese. He thus made an excellent "tip of the spear" to advocate against de Lai, whom he allegedly accused in the first scrutiny of being "a man who would close the doors of the Church, rather than one who would throw them open." It was unlikely that Farley could, on his own though, break through. An American simply could not sink an Italian with so many allies, and while de Lai was unlikely to have the needed two-thirds on the first day, he was close.
That was when the intervention arrived. The practice of jus exclusivae was an informal and old one, where a Catholic monarch could intervene to effectively veto a papabile, and it had nearly occurred at the 1891 conclave against Mariano Rampolla to prevent him from becoming Pius X at the behest of Franz Josef I of Austria, only for the Austrian Emperor to change his mind at the last moment. The context of 1918 was very different, however; a new breed of younger, more forward-thinking monarchs sat across the continent, and men like de Lai terrified them, even the conservative ones. For as devout a Catholic as Ferdinand II of Austria was, he was deeply skeptical of allowing "a man who makes Pius IX look liberal" take the reins of the Church after the polarizing papacy of Gregory XVII. The question of de Lai's potential ascendance was so acute that Ferdinand began to mull how, exactly, he could interrupt it - and jus exclusivae was the perfect vehicle.
Ferdinand regarded himself as Catholicism's chief monarch in Europe and the association of the Habsburg realms with their Catholicism was part of their identity, but he also did not want to wield the knife himself against the Church and, it must be noted, part of his hesitation towards de Lai was his concern that, as a man in a deeply unhappy marriage who was living openly with his mistress who had borne him two children, he was at risk of excommunication from the ultraconservative cardinal should he become Pope. As such, Ferdinand needed a catspaw. Victor Emanuel II of Italy, though a Catholic, was obviously out of the question - the hostility between the House of Savoy and the Church was so acute, despite Austria's longstanding attempts to mediate a solution and get the Church to formally accept the Leonine Compromise, that having the King of Italy exercise jus exclusivae himself was likelier to push wavering cardinals over the line in de Lai's favor, rather than help defeat him. Ferdinand's other options thus were Spain and France, the other two monarchies that had traditionally exercised the right. As such, he suggested to Napoleon V via telegram late in March that it was perhaps prudent to attempt to block de Lai, whom he accused of being likely to agitate violently against the Italian state and possibly threaten the treaties that had underpinned peace since 1868.
Napoleon V consulted with his grandmother Eugenie de Montijo, who flatly informed him that he would do no such thing, even at the request of Ferdinand. The papacy was too sacred to her, and the idea of a secular monarch interfering in the "designs of God" deeply offended her, and the episode left a serious rift in the relationship between Eugenie and Austrian officialdom until her death in 1920. As such, Ferdinand was left no choice but to do it himself when he could not get a firm answer from Spain's Charles Joseph I, and subsequently dispatched Archbishop Janos Csernoch to act as his electoral assassin.
Csernoch dutifully and reluctantly presented the jus exclusivae to Cardinal Rafael Merry de Val, the Cardinal Secretary of State who was Spanish-born but associated more with Italy by 1918. Merry de Val dropped the letter on the floor and denounced it in no uncertain terms, citing it as a "refusal of the first order;" nonetheless, the damage had been done. If even a robustly Catholic realm like Austria, which had in the past vetoed liberals (and ironically, nearly vetoed Pius IX in 1846, before his turn to reaction in the wake of the Revolutions of 1848) sought to reject de Lai, then surely there was something amiss with him. He could simply not steer the Church, what with such grave misgivings from the most powerful of his flock.
This served to immediately redound to another's benefit - that of Merry de Val, who had impressed his fellow cardinals with his theatrical refusal of the jus exclusivae. Four years ago he had also been papabile but his Spanishness had held him back; with the defeats of a number of Spanish-speaking countries such as Mexico or Chile in the Great American War in the interim, however, there now emerged a line of thinking that the Church in the West could be reinforced by a man of Spanish origin, and many conservatives had been greatly impressed by Merry de Val over the previous years. Farley sealed the matter in advocating for him to receive the vote; while no vote tallies are ever taken formally (or at least discussed), Merry de Val's motion had won over his peers, and he was voted Pope, the first non-Italian (by birth, at least) to take the role since Adrian VI, 395 years earlier.
Merry de Val took on the name Ignatius I, in honor of the Spanish Saint Ignatius of Loyola who founded the Society of Jesus and was regarded as one of his country's great contributions to the faith, and his selection was met with muted and reserved approval throughout most of Catholic Europe, with him regarded as a brilliant intellectual but his conservatism suggesting more of the same from Serafini. For his own part, Ferdinand II of Austria-Hungary saw his effort to anoint a name other than de Val backfire - Italy still was hostile to the new Pope, and he had earned powerful enemies in France and the Roman Curia whom he now needed to appease, arguably with a more aggressive stance geopolitically against "heathen" Italy and Protestant-dominated Germany..."
- God's Kingdom: The Catholic Church and the 20th Century
(As I've mentioned before, the Church stays much more conservative, and for longer, ITTL, but de Lai was a bridge too far. Merry de Val is one of those cliche alt-Pope choices, but he is one for a reason, so he'll make a perfectly fine Ignatius I for my purposes.)