In 1556 the Carlos I abdicates in favour of his two sons Ferdinand I and Phillip II who keeps the Spanish lands. Now with Phillip II gone 5 years later and a legitimate issue of Carlos II why any German or Austrian get the Spanish throne?
It's a bit of nitpick, but king and later emperor Ferdinand I was the brother of emperor Charles V (king Carlos I).
Well the Austrian would inherit if TTL Carlos II dies without a heir. Since Charles V only had one son Philip II and ITTL Philip II dies only leaving one son, this will make the children of the eldest daughter of Charles V and thus a sister of Philip II, Mary, his heirs (although in some parts Mary herself could also inherit).