It is said that the good people die young, but, according to the modern heretics and anti-Imperialists anyway, Albrecht the Great wasn't a good person at all. That was good, because consequently this iron-fisted, ruthless man lived for long after 1558, the year of his greatest triumph, after which the success of the rest of his reign and the survival of the Empire he worked so hard to reform were all but assured. Burgundy, East Flanders, Switzerland, Austria and Bohemia - that's just the major ones, ofcourse - were joined by East Prussia, Poland and West Hungary as the core Habsburg territories, around - or, rather, between - which the Holy Roman Empire was being steadily brought back into the fold.
The Holy Roman Empire officially stretched from Kiel to Florence, but in truth, even now the Holy Roman Emperor's power was limited in Germany itself, whereas in Italy, it was practically nonexistant. Having secured his eastern border and not needing to worry about the northern one (the Kalmar Union was still weak from its civil wars), said Emperor, after a period of consolidation, came before the choice of pursuing a war against the Plantagenets in the west to reclaim West Flanders or, alternatively, going south, to reinforce Imperial power there. The Plantagenets at the time were not at their strongest, yet for a variety of reasons Albrecht the Great decided not to interfere there. An interesting opinion was that he forsaw some of the future events, and accordingly decided NOT to land his blow on the Plantagenets, his blow that, doubtless, could've become a finishing one and accordingly would have radically changed the balance of power in Western Europe - as it, indeed, had under one of his descendants, with the according ultimate consequences for the HRE and the Habsburgs. But that's just as well, anyway, Albrecht went for Italy and ignored the excellent opportunities in Flanders.
Most historians agree that throughout his reign, Albrecht IV worked towards three main objectives - the reorganization and centralization of the Holy Roman Empire, the strengthening of the Holy Church and the stemming of the Turko-Muscovite tide. All three were reflected in the three main goals of his southern operations of the late 1560s-early 1570s. The cause of Imperial Reform would clearly be furthered by the restoration and consolidation of Imperial power in North Italy, the states of which didn't even sign the Treaty of Worms (well, they weren't really asked to sign it, but that's beside the point). The cause of strengthening the Holy Church... well, here we have to take into account Albrecht IV's view on this issue. Basically, he believed in a strong Church, controlled by an even stronger Holy Roman Emperor. The Church, despite its losses in the east, was strong, in name at least. The Popes, however, still considered themselves superior to the Holy Roman Emperors - and the new Pope Leo X - a Medici whose elections bound the Papal States and Florence even closer to each other - was even worse than his predecessors in that regard, agressively trying to establish more control over the Holy Roman Empire and soon querreling with Albrecht IV on the issue of the German bishoprics and the appliance of the Treaty of Worms therein. Fortunately, there was sufficient opposition to Leo X in Vatican, and Albrecht the Great was keen to exploit this.
As for the Turks, well, first of all it would mean domination of Italy by a single power-block - that of Aragon (to which Albrecht IV promised some territories and Cardinal Giuseppe Borgia, from the famed Aragonese family, as Pope; besides, there was the issue of dynastic ties between Aragon and the HRE) and the Holy Roman Empire. In such safe hands, Italy would become a much better challenge to the renewed Ottoman naval power than the way it currently was. Secondly, Albrecht IV was really fond of Venetian strategic position and ship-building capabilities, and believed that it deserved much better rulers than the egoistical and corrupt oligarchs that just weren't up to the task of fighting the Turks. Besides, they by themselves were an impediment to the rest of Albrecht IV's plans for Italy.
Before any campaigns could be started, Albrecht IV, aware of the immense financial problems of going against Florence AND Venice, arranged deals with the bankers of Aragonese Genoa, the German Baltic cities and, ofcourse, Burgundy. They were only too eager to fund the elimination of competition, especially the Genoese...
So in 1567, Albrecht IV proclaimed from Trent (where, to the vague complaints of the resident prince-bishop, he had camped with a large army) that the Treaty of Worms was to be extended to North Italy. This was immediately supported by the Duke of Milan and the King of Aragon, both of whom have been in on Albrecht's plans from the start, the Milanese Duke being swayed by promises of restoration of the eastern slice of Milanese territory stolen by the Venetians after the Italian (or Louisian) War, and also by the Elector status immediately bestowed upon him. The next proclamation - in which the bishoprics were confirmed to be equally subject to the Treaty of Worms - was issued in 1569, from newly-captured Mantua (as Venice, which used to own the city, renounced the Trent Proclamation on the grounds that Venice wasn't even formally apart of the Holy Roman Empire). Having captured the western fifth of Venice's Italian ownings, including, aside from Mantua, the cities of Bergamo and Brescia, the Holy Roman Emperor left them to the Milanese, and, bypassing Venice for the moment, moved forwards for Florence, which, too, had not accepted the Trent Proclamation. Meanwhile, the small coastal state of Piombino, near Florence, was occupied by the Aragonese as a forward position. From there, the Aragonese marched out to link up with Albrecht IV's army at Pistoia in 1571, just after a Florentine-Papal army was routed nearby in a fierce battle that hung at the balance for much of its course, both sides making good use of modern infantry tactics and gunpowder weapons, most notably field artillery, which, though still quite primitive, managed to caused grievous casualties to both sides. But regardless, the joint Aragonese-Imperial force soon forced Siena to submit and join them, and then, together with the Siennese, besieged Florence.
Meanwhile, in the north, a Venetian attempt to retake Brescia was defeated; Venice went firmly on the defensive, preparing new fortifications in Terra Firma. In Rome, Giuseppe Borgia survived an assassination attempt, and soon had to flee to Albrecht's camp; despite a chase and another assassination attempt, Giuseppe succesfully reached the Holy Roman Emperor with a few supporters, who promptly had him declared Pope Eugenius V. After Florence finally fell in 1574, Eugenius V took temporary residence there, and soon many of the Church hierarchs opposed to Leo X gathered around him there. Though not having to fear anything in Florence, Eugenius V still did follow the Imperial army as it marched southwards to besiege Rome.
Back in 1573, the Papal troops succesfully fought back an Aragonese attempt to attack Rome. But now that the Imperial juggernaut was rolling in from the north, the Aragonese attacked once more and the Papal forces had to hide behind Rome's walls to avoid being overwhelmed by sheer numbers. And impressive walls these were, capable, it was thought, of withstanding what was perhaps the greatest siege of the 16th century - a century rich with great sieges, I might add.
Rebuilt since Mehmed II's assault on Rome, the Roman fortifications were, first and foremost, modern. A classical swunken profile fortification of the 16th century, it also utilized "Tiranean" (as used by the Turks at Tirane and some other new Balkan forts) earthern ramparts and bastioned traces. Several lines of defenses were to be overcome if Albrecht the Great was to win. He was not a one to reject such a challenge. And so, Imperial and Aragonese forces secured the countryside. Powerful artillery was dragged up, and Rome was shelled day and night. Immense fortifications were built by the Imperial besiegers, and all relief attempts, including a Venetian one in early 1574, were beaten back. All supplies were cut off: the Aragonese fleet, having captured Ostia and turned it into a base of operations, set up a model blockade. Imperial engineers tunneled their way under Roman walls, planting mines there and often skirmishing with the defenders, who begun digging tunnels of their own to intercept the Imperials. Leo X hadn't the time to properly prepare the supplies, and after a few months mass starvation begun despite last-moment rationing attempts. In the end, it was hunger that won the siege for Albrecht IV and Eugenius V, the latter having also helped by inciting the masses to rise up. The starving, desperate Romans rebelled, and eventually forced the Pope to commit troops from the walls to putting them down. Having learned of this, Albrecht ordered a decisive assault. Imperial and Aragonese casualties were devastating as they climbed up the walls and charged through the remaining tunnels, but eventually they engaged the Papal forces and overpowered them in a gory confrontation. Then they broke in Rome itself...
Barbarossa was avenged. Leo X was captured and sent into a distant monastery, while Eugenius V was recognized by the captured cardinals to be the real Pope, and immediately recognized the Treaty of Worms. Rome was slightly ransacked, but Albrecht mostly succeeded in maintaining disciplinne, and having left a small garrison marched north for Venice, along the way receiving Savoyard and Provencal recognition of the Treaty of Worms and the Trent Proclamation. They, alongwith Siena and Milan, sent troops to reinforce the Imperials as they prepared at Brescia to attack Venice.
Just like he had used Eugenius V against Leo X, Albrecht the Great now used the political opponents of Doge Giovanni II Mocenigo, especially the once-powerful Dandolos. Though a few decades earlier the fabled Venetian patriotism would have been stronger than personal rivalry, now, as corruption grew and power-struggles became more and more intense - and all this on the background of the twin Turkish and Imperial menaces, and, perhaps worse still, social strife caused by the widening of the gap between the city's elite and the commoners - Venice was doomed by the fact of the loss of its unity alone. After all, apart from unity its two great strenghts were commercial (Venetian trade network was crippled by the fall of Constantinople and the Iberian takeover trade with India) and naval military (the Venetian fleet was battered badly by the Ottomans, and though it was still strong Albrecht IV secured the assistance of the Aragonese - and thus, Genoese as well - navy, which was a match, if not more than a match, for the naval assets of Most Serene Republic).
However, things didn't go at all well. The Venetians, somehow forewarned of the incoming assault, begun preparing for a siege beforehand and moving troops from all over the country to Venice. Dalmatia was consequently abandoned and fell like a ripe fruit into Imperial hands. Terra Firma, the Venetian mainland Italian territory, was degarrisoned as well but for a few troops to hinder the Imperial advance. By the time the Imperials broke through, the Venetians had already prepared for this and launched an attack on the Imperial camp, using the exhaustion of Albrecht's men. The attack was driven back, but barely, and the Imperials had to further postpone their assault. The campaign was bogging down, especially as the Venetian fleet defeated the Aragonese one at Lissa, a strategic island in the middle of the Adriatic Sea. Though the Venetian victory - as all their victories in this war - was obviously just a tactical one, strategically the Venetians were also furthering their goal of making the war so expensive and difficult for Albrecht as to make him end it. After all, Giovanni II mused, Venice is practically impenetrable, a natural fortress. And Albrecht couldn't besiege it forever, sooner or later other problems would come up, and he would have to withdraw.
Problems indeed came up after the defeat of the first assault, during which it became clear that the Dandolos were not at all trustworthy, as it was clearly one of theirs who had informed Giovanni of the Emperor's plans and as many of them betrayed the Imperials during the assault itself, destroying its surprise effect altogether and allowing the Venetians to force the Imperials out with heavy casualties, destroying practically the entire fleet Albrecht had built up for this purposes and later defeating yet another Aragonese naval expedition. That was in May 1577; in June of the same year, in the Emperor's absence his young son Friedrich, manipulated by some powerful members of the nobility, including the elector of Brandenburg, tried to launch a foolish coup d'etat, which was easily defeated; however, the Imperial pax clearly begun showing some cracks, encouraging the Venetians, especially as soon after a minor peasant rising commenced in North Germany. Though it was defeated before it could spill out into anything more major, Albrecht IV rightly saw in his absence in Worms one of the factors damaging the stability of his empire. Leaving the siege of Venice to Franz von Schauenburg, a trusted lieutenant, the Emperor with his retinue made haste to Worms, just in time to uncover and crush a conspiracy against him, once more with the involvement of the Brandenburger elector, Friedrich III. As this and his previous plots became uncovered, Albrecht IV decided to confront Friedrich III, and, bluffing about levying more troops here in Germany and using them to put Brandenburg in line, persuaded the elector to apologize (not publically, as publically he was innocent anyway) and agree to the status quo. Albrecht IV also made sure to monitor the activities of von Hohenzollern's agents; evidently, though, no further transgressions happened, especially as Friedrich III was killed by his new horse that evidently wasn't properly tamed.
Albrecht IV died in 1584. Since his arrival at Worms in 1577, he had stomped out numerous conspiracies and furthered the cause of Imperial Reform, not to mention the various other activities, such as patronage for many famous artists and scholars, great public works and construction projects, and, ofcourse, the never-ending diplomatic activities both within and outside of the empire. He never did take Venice, but von Shauenburg took it for his Emperor, five days before the latter's death during his final journey to accept Venice's surrender. Albrecht's second son, Johann I, accepted it in his father's stead. Venice, devastated by war and by the last rising of the starving, desperate lower classes that greatly assisted von Shauenburg, was in a bad shape, and its political institutions in an even worse one after the slaughter of Giovanni and his supporters. Johann I was thus free to end the Most Serene Republic's existance altogether, annexing Terra Firma and Dalmatia into Habsburg holdings directly and turning Venice into an Imperial free city, ruled by the Dandolos under Habsburg supervision. Milan's retaking of the lands lost to Venice after the Italian War was formalized. Piombino was annexed by Aragon. In Rome, a puppet Pope sat. In Central Italy, puppet rulers didn't dare think of defying the Habsburgs. Italy, for now at least, was under the Habsburg boot.
One might ask why did the Ottomans not use this war in Italy to regain Hungary and otherwise make things unpleasant for the Imperials. Normally they would have at least tried to pick up the Venetian holdings in Dalmatia. But the way things were, the Ottoman Empire was in no shape for foreign adventures, being in the middle of an Arabic rebellion and trully Byzantine intrigue at the court of Osman II, a weak ruler who spent most of his time in the harem, trusting various favourites to run the empire. Thankfully, one of his favourites at least was a competent, skilful man - Kirklareli Ahmad Pasha, who managed to maintain order and to pacify most Arab tribes by 1580 after the great victory at Homs. But he also had to thwart the various conspiracies against him, the last of which had cost him life in 1583. So the Ottoman Empire was mostly paralyzed during much of the 16th century, though far from out of the game as later events have shown.
They also had another problem. With Poland-Lithuania destroyed, the Ottoman Empire and Muscovy lost a mutual enemy. Though Muscovy still had grudges with the Catholic church and the Habsburgs, its grudges with the Ottomans and their Tartar allies now came to the forefront, Lithuania having fallen to the Velikiy Knyaz. Speaking of the Velikiy Knyaz, that title, after Dmitriy II's death in 1561, was at first born by his young, weak-willed son, Vladimir I. He died in 1571. His slightly-younger brother, Ivan V, proved much more competent and ruthless, and proceeded to massacre the boyars. His father Dmitriy II would certainly have approved. Having thus asserted his power at home, he moved on to do the same abroad. Soon enough this got him into a war against the Crimean and Astrakhan Tartars, against whom the gulai-gorods previously used to fight the Cossacks (by 1571 practically extinct due to a nifty combination of slaughter and slavery) were employed with much success. Astrakhan was attacked by a large Muscovite army, breaking an unwritten Russo-Turkish agreement and violating Ottoman commercial interests in the north. But the Ottomans were at the time too weak to do anything about it. After Astrakhan fell, Ivan V moved his troops to attack Azov, a key fortress of the Crimean Tartars, who themselves were direct Turkish vassals. Enough was enough, and Kirklareli Ahmad Pasha, using a pause in the wars with the Arab rebels, led in 1576 an expedition to Azov. In a fierce battle, the Muscovites, surprised by the Ottoman attack, were driven back. Ivan V planned a new campaign, but then, plagues broke out behind his lines, a pretty natural result of a lenghty population boom. In combination with droughts, it caused a demographic crisis. While Ivan had to deal with that, the Ottomans reinforced the Crimean garrisons, strenghthened their grip on the Crimean Tartars just in case they might try anything and modernized Azov and some other forts along Tiranean lines. Crimea thus remained outside of the Muscovite grasp.
But this wasn't enough of a compensation for the horrible diplomatic defeat Kirlareli knew he had suffered. All attempts to reconcile with Ivan V have failed. The Velikiy Knyaz found himself a new ally, Albrecht IV; both have once more recognized their respective gains in the previous wars and concluded a "pact of friendship"; it wasn't too advertised, as the pious would've been disturbed, even though the Church was subservient to the Emperor now. But who cared? The eastern front of the Holy Roman Empire was closed now, whereas before the Ottomans, a frightening prospect of an united front to their north appeared...
And as if that was not bad enough, Ivan V, still being at war with the Ottoman Empire (although no military action was taking place whatsoever, not even Tartar raids - the gulai-gorods have done their work well), decided to strike at it where it hurt, without using any weapons but the quill. Aware of the Ottoman internal troubles and seeking to shake Osman II's throne even further, Ivan V was also guided by domestic concerns (where he intended to fortify his power at the same time, thus killing two birds with one arrow) when he wrote his infamous 1578 letter to Gennadius III, Patriarch of Constantinople, callign for him to break with the Ottomans and announce official support for Ivan V as the successor of the Byzantines (as the ruler of the last indepnedent Orthodox country in the world).
Unlike its Russian counterpart (which was forcefully united and subjugated, but at least had the certainty of subservience), the Greek Orthodox Church was in a tumultous, uncertain state. There were many factions and even more opinions on what should be done about its present fairly-dubious situation. Some proposed an alliance with the Holy Roman Empire and a new Florentine Council; others fiercely defended the status quo or something near it; and a nascent Puritan faction in the church hierarchy believed that the Muscovites were right; that it was the sinful practices and avarice that bound the Church to the Ottomans; that a great reform was needed, that the hierarchy needed to be purified and that the church, enheartened by the Muscovite struggle with the Ottomans, needed to break with the Babiali (in OTL called the Sublime Porte) and lead the resistance. Gennadius didn't belong to or sympathise with any party apart from - surprise-surprise! - the one that believed that the Patriarch was always right, which, by the way, still was stronger than all other factions taken together, though not quite as vociferous or active. The cautious old man didn't seek martyrdom, especially for a somewhat dubious (as he saw it) cause; as a realist, he quite clearly saw that, even if the Ottoman yoke was to fall, it would not fall any time soon, much less due to some senile old men with the naivity and idealism of young children saying that it should. But the problem was that he was just about the only one that he knew of (in part because everybody in the Greek Orthodox hierarchy realized that personal opinions are best left unstated) who disagreed with the letter. Everybody else that mattered seemed to believe that at the very least it merits a discussion. The Puritans, especially their rabble-rousing leader Athenagoras who, by a sad twist of fate, went on and on avoiding the stake the Patriarch prayed he would be one day put on, didn't even give it a second thought, immediately stating that they believed Ivan V should be declared the Roman Emperor without any delays (even though he didn't explicitly demand that one himself, only hinting that he wouldn't really be against that). Finally, a secret council of the highest hierarchs was called to discuss this letter and make one final decision on the matter.
Heated, controversial debate ensued. No decision was reached apart from continuing the council next day. All-in-all, it took four days for the Patriarch to finally persuade the majority of the hierarchs that they should support the status quo and should avoid making such rash and foolish moves as Ivan V had suggested. The Velikiy Knyaz himself shrugged when informed of this debacle; he didn't really have his hopes up for this. His real plan did pay off - a schism in the Greek Orthodox Church took place. Athenagoras refused to recognize the decision of the council. Soon, his supporters begun inciting rebellions in the Balkans, and though only a few actual rebellions have happened (and they were put down quite quickly), the Ottoman situation in the Balkans detiriorated sharply. Ottoman relations with the Church almost followed suit, but, quite infamously, Gennadius III - and his closest retainers - had averted this by allowing and assisting the Ottomans to help the Church deal with certain heretics. Athenagoras did get his stake after all... Unfortunately, he became a martyr and a saint in the process, as did those of his followers who had perished, while the numerous priests sympathizing him soon openly or secretly broke with the Church. As they gained much following in all of the Balkan countryside, the Greek Orthodox Church became not just more dependant on the Ottomans than ever before, but also largely confined to the cities. It never quite recovered from this blow, while the Balkans begun transforming into the biggest ulcer on the body of the Babiali.
And meanwhile, in Kiev, to which Ivan V had moved the capital (to a) mark the beginning of a new age, b) distance himself from the Muscovite intrigues and corruption and thus reinvigorate the state and c) bring the old and new lands under his rule closer together), a momentous event took palce as the local patriarch had bestowed upon Ivan V the title of the Caeser of the Rus. The title at first was corrupted to "kesar", but a different form prevailed in the end - the rulers of Russia, as Muscovy from now on was called, were commonly known as "tsars", from "tsesar" as the other corrupted pseudoRussified form of "Caeser" went. Naturally, the Russian Orthodox Church - now united under the Patriarch of Kiev as opposed to the Muscovite one - blessed all and any actions taken by the tsars. Also, having become Tsar Ioann I, the Russian ruler firmly broke away from the Muscovite past by starting a major buerocratic overhaul. Legal reforms followed, most notably easing serfdom - though the Tsar himself had by now at least as many serfs as all other noblemen taken together, the only one who had to suffer from this were the noblemen, for not all of them could afford to create liveable conditions for their serfs, and now were unable to stop them from just going to someone else. Such as the Tsar...
The constant purges of the nobility, though greatly strenghthening the Tsar's power, did create some problems. The diplomatic one wasn't too bad - Russia hadn't much to lose in the eyes of the Catholic world, in that regard anyway. But it also cost the Russian army practically all of its officer corps, the replacements coming from the streltsy and the remaining nobility being quite slow to come. Which is one of the main reasons none of Ioann's ensuing Crimean campaigns have succeeded and he died somewhat disillusioned in 1587, his other campaign - in Finland - having resulted in casualties both to the Kalmarese garrison and to frostbite.
The Kalmar Union - having reformed under Christian III, who turned it into a personal union of an united Denmark-Norway and Sweden-Finland and generally standardized and codified previius priveleges, and other laws along the way - gradually begun to recover at this time. Though the Russo-Imperial alliance threatened it, in short-term it seemed safe as the Imperials were not too eager to attack it, not yet viewing its recovering economy and nascent navy strong enough a threat. Relations with Russia detiriorated (clashing commercial interests, overlapping claims in the former Teutonic Order that were only now renewed), as already mentioned there has even been some fighting in the 1580s, but the Kalmarese have held their ground. Back at home, apart from the aforementioned reforms, they didn't do much, quietly developing their manufactories and commerce.