Maximilian II (1564-76), Rudolf II (1576-1612), and Matthias (1612-19), not only failed to arouse the princes to a more intelligent treatment of the affairs of the empire, but by their own policy they encouraged the princes to pursue purely personal ends. For, unlike Charles V who had ruled a world-empire, his successors governed territories, the political importance of which barely exceeded that of the majority of German states, and which only surpassed these latter in extent. Accordingly, as none of them were men of pre-eminent ability, their political aims were narrow, their need of peace urgent, and their credit inadequate, while the credit of the western powers had largely developed since the time of Charles V. Moreover they had harder conditions to face in their own dominions than the other princes. Most of their territories were in the eastern part of Europe where, from the end of the fifteenth century, the landed petty nobles, who formed a large class, opposed with ever-increasing success the progress of the commonalty and the introduction of orderly administration under the control of the sovereign. With this inferior nobility in the dominions of the German Hapsburgs, the Protestants, who attracted to themselves all the opposing elements, made common cause. Thus the emperors were by degrees so harassed in their family possessions that, towards the end of Rudolf's reign, the power fell into the hands of the nobility, and Matthias, though advised by his able minister Cardinal Klesl, was hardly able to maintain his authority.
In the period from 1556 to 1618 the only general movement in the inner politics of the empire, and one that caused important changes in the relative influence of the German rulers, namely, the endeavour to place the ecclesiastical principalities in the hands of the younger sons of reigning princes, was entirely due to the desire of these princes to increase their territories. The ecclesiastical domains in the eastern provinces of Germany were few and insignificant, whereas in the north-west as well as throughout the west and south they were numerous, some being large in extent and of great importance. With exception of the territorially powerful Diocese of Münster and the small diocese of Hildesheim, those in the east and north came under the control of Protestant princes as "administrators" to the aggrandizement of the Houses of Wettin, Hohenzollern, and Guelph. In this way these territories were made ripe for secularization. Bavarian princes became Bishops of Cologne and Hildesheim, which were, thereby, saved from the fate that befell the others. These measures quickened the process of consolidation by which the territories of a few dynastic houses in northern Germany steadily grew in extent, the result being of considerable importance in the future political development of Germany. On the other hand, the attempts of the princes to annex the spiritual principalities of southern Germany failed. Protestantism entered these territories at a later date and with less force than it had in those of northern Germany. Consequently the ecclesiastical lands in the south had more power of resistance than those in the north, while the princes were weaker, because their number was large and their possessions all small, excepting what belonged to the Austrian Hapsburgs on the Upper Rhine and perhaps also the territory belonging to Würtemberg. In these circumstances the Ecclesiastical Reservation (Reservatum Ecclesiasticum), adopted at the instance of the Catholics in the Recess of the Imperial Diet of 1555, proved an effective precautionary measure in southern Germany. It provided that any bishop or abbot who turned Protestant could not take advantage of the rule cujus regio, ejus religio, but must resign.
The chief opponents of the ecclesiastical principalities in southern Germany were the representatives of the House of Wittelsbach, rulers of the Palatinates and of Bavaria. Prominent because of their noble descent, the Elector Palatine being in fact the ranking temporal elector, they were all poor in land. The branch that ruled the Palatinate of Neuburg acquired a heritage on the Lower Rhine by marrying into the ducal House of Cleves-Juelich, which was becoming extinct. The other branches sought to extend their domains at the expense of their neighbours. What decided the predominance of the Catholics in the south was the result of two movements which settled the question whether the Protestants, in spite of the successes in 1543-47 of Charles V, were finally to seize Cologne and the whole country of the Lower Rhine and from these centres crush the Catholics of southern Germany. In the first of these contests, the "Cologne War" (1582-84), which arose from the apostasy of Archbishop Gebhard Truchsess, the last Archbishop of Cologne who was not a Bavarian, the Catholics were successful. In the second, the contest over the Cleves-Juelich succession on the extinction of the native ducal family, the inheritance, it is true, passed to Protestant rulers, the Palatines of Neuburg and the Hohenzollerns; but of these the Neuburg line became Catholic in 1612, so that the danger was dispelled once more. As a consequence the Catholic Church gained sufficient time, after the Council of Trent, to accomplish gradually the reconversion of the greater part of southern and western Germany, especially since Bavaria in the south, and Münster as well as Cologne in the west, remained faithful to it. The political consequence of the Catholic victory in the south-west was that this part of the empire, in contrast to the northern sections, continued to be split up into many principalities. This caused a constant state of unrest among the reigning princes and the nobles of the empire in south-western Germany. The electors palatine, especially, were dissatisfied with their fortunes. They pursued within the empire a policy of hostility to the Catholics and to the imperial house that became more and more reckless with each succeeding decade. Moreover they were in league with France and other foreign countries. In accordance with this policy they turned from the Lutheran to the Calvinistic faith and put themselves at the head of all the discontented elements in the empire. Up to 1591 their aim was to bring about a union of all the German Protestant princes, including the Lutheran, for the purpose of enforcing the claims of Protestantism in south-western Germany. Even Saxony eventually took part in these negotiations. At the same time Calvinism also penetrated surreptitiously into central Germany (the so-called Crypto-Calvinisin). But in 1592 a complete revulsion took place in Saxony. After that, the only remaining adherents of the palatine princes in central Germany were a few petty reigning princes and counts of that section. One of them, Christian of Anhalt, appears actually to have guided the policies of the Electorate of the Palatinate from 1592-1620. After sixteen years more of persistent urging, a few princes of south-western Germany joined the palatine princes in 1608 to form the "Protestant Union." Their value as allies, however, was in inverse ratio to their historical fame. The hopes of foreign succour that the palatine princes had entertained also proved vain; in 1609 the Netherlands concluded an armistice with Spain; in 1610 Henry IV of France was assassinated. In their disappointment the Calvinists brought the entire machinery of the empire to a standstill by breaking up the Imperial Diet in 1613. In their freebooting temper the party was ready to snatch at whatsoever spoil presented itself.
The Calvinistic party was, nevertheless, too weak to inflict any serious harm. The Lutherans, under the leadership of Saxony, drew back more and more. The Catholics, led by Bavaria, maintained a purely defensive attitude. The revival of religious life among them made but slow progress, despite the strenuous exertions of the Bavarian rulers, of the Hapsburgs,
