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OK so this is something I've recently came across and it appears that no one has ever mentioned/explored the idea before. So during the Spanish succession war Emperor Josef I (1705-1711) sequestered a number of states whose Princes had sided with the French. These included Mantua, Montferrat, Mirandola, Cologne and Bavaria. At the end of the war the Italian fiefs were annexed directly to Austria while the German states saw their Princes restored. Here is the part I found interesting: after Bavaria was sequestered Emperor Josef gave Upper Bavaria to his uncle the Elector Palatine, keeping lower Bavaria under imperial occupation.

Now I have no real proof of this but it appears to me that the Emperor intended to permanently partition Bavaria between Austria and the Palatinate, eliminating a major threat to the Habsburgs from within the Empire. So my question is this: what if this potential plan had gone through and the Wittelsbachs never returned to Munich? This would give the Habsburgs effective control over southern Germany while eliminating their (at the time) greatest German rival. So what are the long-term effects, assuming the Habsburgs hold onto Bavaria? No Austrian Succession war or one with a Prussian defeat? The possibility of a Habsburg-unified Germany? A new weapon in the French arsenal against the Austrians (remember that the Bavarian Electors were Bourbon allies)? A rejection of the annexation by the other Prince-Electors and a threat to the Habsburg Emperorship? Other possibilities that I'm not thinking of? Really I find the whole thing fascinating as its basically an early success of Josef II's plan so please discuss!
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