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The King is Dead! Long Live the Queen!
Queen Claimant of Spain, Maria Antonia of Austria, Electress of Bavaria
"I'm the Heir! Not that French Bastard!"
- Queen Maria I of Spain
When the sickly King Carlos II of Spain died, the succession was disputed even though it was cleared early on that the heir to Habsburg Spain would be Maria Antonia, daughter of Holy Roman Emperor Leopold I and his wife Margaret Theresa of Spain, sister of the deceased King Carlos II. The other side of the dispute was the French under King Louis XIV who claimed the throne for his grandson, Phillip of Anjou by the line of his first wife, Maria Theresa of Spain.
The succession was in the clear even before the King's death with Carlos' mother, Marianna of Austria in 1696 stated that the line of Maria Antonia of Bavaria would be the heirs of Spain.
Phillip of Anjou, French backed King of Spain
But in the deathbed of Carlos II, the French claimed that he changed his will so that Phillip of Anjou would be named king of Spain and so this complicated the affairs of the succession and with King Louis XIV never having received his dowry to his marriage to Maria Theresa of Spain took say that Spain was his dowry.
The Talks on London
There were calls for a truce for the succession and so the two claimants, the Austria-Bavaria diplomats and the French diplomats with a few Spanish delegates met in London, hosted by the King of England and the Statdholder of the Netherlands to talk about the succession. The Austrian-Bavarians wanted the Spanish throne and the French agreed to it reluctantly if only the Austrians give them the Spanish Netherlands (OTL Belgium) for his grandson, Phillip of Anjou which they agreed on and again they agreed when Savoy gained Milan but Austria was given Mantua but then negotiations broke down when King Louis XIV demanded either a payment for his dowry or for Louis XIV to gain Catalonia or the rest of Navarre which was rejected and so Louis left the talks and named his grandson as King Felipe V of Spain and his son, the Grand Dauphin Louis as Duke of Wallonia and Count of Flanders.
The two claimants, France and Austria-Bavaria wanted the empire to be under their influences and so pacts were made. The French were allied with Portugal, Savoy, Cologne and even a few Spaniards while the Austrians were allied with the Bavarians, Dutch, English and like the French were supported by some nobility.
The French alliance or more known as The Bourbon Alliance was rumored to be shaky with Portugal only signing in if only the French would protect their fleet but everyone knew that they couldn't face the British fleet and Savoy was guaranteed to gain Milan and Mantua but the Savoyard being opportunists opened a backdoor into their alliance while Cologne and Liege were trapped by the Austrian Alliances members, Bavaria and Netherlands respectively.
The Austrian camp or called as The Grand Alliance also faced a few problems like that rumors swirled of a rebellion in the making in Hungary, some Bavarians were also thinking about succession already even though the war haven't been won yet with Max Emmanuel's younger brother already disputing it and the British & Dutch were facing leadership problems with commanders both from the Dutch and British camps fighting who would be in charge in the upcoming war even though they shared a ruler, King William III (most people knew that he wouldn't survive the decade).
Duc de Villars invades Catalonia
The war finally started not long after negotiations broke down when on July of 1701 when the Duc de Villars invaded Catalonia and the Duke of Berwick invaded Navarre on the basis of putting Phillip of Anjou to the throne of Spain. The War of Spanish Succession had begun.