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During the period in which the status of the Papal territories was uncertain, there were a few different ideas floating around on how to resolve the issue. Leonine City was one proposal offered the the Italian government, but there was another one in which the Holy See would have relocated to (soon to be) Imperial Germany. Pope Pius IX asked if Prussia would be willing to grant him asylum, and while Kaiser Wilhelm I was opposed to it because he thought it would corrupt the country and he would be forced to convert to Catholicism, Chancellor Bismarck advised in favor of it.
Assuming that the proposal went forward and the Holy See relocated to Imperial Germany (Bismarck mentions Cologne and Fulda as suitable cities), how would things change?