16th century was extremaly lucky for House of Habsburg-they get thrones of all Iberian Kingdoms, Bohemia and Hungary, were also close
to get Polish and English throne in addition. Let's see what would happen with that chain of lucky events reversed and Habsburgs reduced back to Austria.
One of these unfortunate events that hit House of Habsburg would be death of Ferdinand Habsburg at age 5-nothing unusual back then, when children mortality was sky-high, the fact, that all six children of Joanna the Mad survived to adulthood was more unusual. There is still Charles, Habsburgs are not lost yet! But death of grandson may cause Emperor Maximilian to consider another marriage (and get annulment of current one, still even without annulment he had 8 years after death of Bianca Sforza)-I want Habsburgs to fall, but not to die out, so Max would marry again, and there is something, that could make him more willing to take new wife-Vladislaus II of Hungary has no daughter-ITTL Anna de Foix gave birth to a son in 1503, so marriage between Max' grandson and Vladislaus' daughter is not possible, Vladislaus has no daughter, but still has one unmarried sister-Elizabeth, born in 1482 (definitely too old for Charles) IOTL Vladislaus and Sigismund proposed him her hand in 1511 after death of Bianca, but Max refused, ITTL he would be more interested-not only is future of his dynasty less secure, he needs also to make ties with King of Hungary and Bohemia by marrying his sister to strenghten Habsburg claims to these thrones. So Emperor marry Elizabeth ITTL and have one child with her-son named Frederick born in 1513. Max has moment of joy before next catastrophe-in 1517 his grandchildren left Low Countries for Iberia-Charles to take thrones of Castile and Aragon, Eleanor to marry Manuel of Portugal. Charles' reign doesn't last long. He fell ill and died on 25 September 1518, exactly 12 years after his father. Spain really is Habsburg's grave. Maximiliam soon follows his grandson and dies in January 1519. Manuel Aviz, who is from few months married to Maximilian's oldest granddaughter, claims thrones of Castile and Aragon and Burgundian inheritance. King Francis of France surely would try to use opportunity to get at least Artois and Franche-Comté. Only remaining male Habsburg-5 years old Frederick, inherits Austria, but that is all which is left to him-he had no claims to Spain and Burgundian Inheritance and is too young to be elected as Emperor. But Imperial throne would not remain empty. Who's going to win? Would François still try his chance, now when there is no danger of Habsburg encirclement of France? Or he'd just use opportunity to grab as much of Burgundian Inheritance as possible. Perhaps Frederick the Wise of Saxony would be elected? He had electoral vote, would have support of Fuggers, who had their mines in Saxony, IOTL get even support of Pope. That would have interesting effect on Martin Luther's career if Elector of Saxony gets Imperial throne...
to get Polish and English throne in addition. Let's see what would happen with that chain of lucky events reversed and Habsburgs reduced back to Austria.
One of these unfortunate events that hit House of Habsburg would be death of Ferdinand Habsburg at age 5-nothing unusual back then, when children mortality was sky-high, the fact, that all six children of Joanna the Mad survived to adulthood was more unusual. There is still Charles, Habsburgs are not lost yet! But death of grandson may cause Emperor Maximilian to consider another marriage (and get annulment of current one, still even without annulment he had 8 years after death of Bianca Sforza)-I want Habsburgs to fall, but not to die out, so Max would marry again, and there is something, that could make him more willing to take new wife-Vladislaus II of Hungary has no daughter-ITTL Anna de Foix gave birth to a son in 1503, so marriage between Max' grandson and Vladislaus' daughter is not possible, Vladislaus has no daughter, but still has one unmarried sister-Elizabeth, born in 1482 (definitely too old for Charles) IOTL Vladislaus and Sigismund proposed him her hand in 1511 after death of Bianca, but Max refused, ITTL he would be more interested-not only is future of his dynasty less secure, he needs also to make ties with King of Hungary and Bohemia by marrying his sister to strenghten Habsburg claims to these thrones. So Emperor marry Elizabeth ITTL and have one child with her-son named Frederick born in 1513. Max has moment of joy before next catastrophe-in 1517 his grandchildren left Low Countries for Iberia-Charles to take thrones of Castile and Aragon, Eleanor to marry Manuel of Portugal. Charles' reign doesn't last long. He fell ill and died on 25 September 1518, exactly 12 years after his father. Spain really is Habsburg's grave. Maximiliam soon follows his grandson and dies in January 1519. Manuel Aviz, who is from few months married to Maximilian's oldest granddaughter, claims thrones of Castile and Aragon and Burgundian inheritance. King Francis of France surely would try to use opportunity to get at least Artois and Franche-Comté. Only remaining male Habsburg-5 years old Frederick, inherits Austria, but that is all which is left to him-he had no claims to Spain and Burgundian Inheritance and is too young to be elected as Emperor. But Imperial throne would not remain empty. Who's going to win? Would François still try his chance, now when there is no danger of Habsburg encirclement of France? Or he'd just use opportunity to grab as much of Burgundian Inheritance as possible. Perhaps Frederick the Wise of Saxony would be elected? He had electoral vote, would have support of Fuggers, who had their mines in Saxony, IOTL get even support of Pope. That would have interesting effect on Martin Luther's career if Elector of Saxony gets Imperial throne...