The Church is Divided. The Pope has fled to Avignon, while the heretics of the Protestant Church spread across Europe. Only Poland, Portugal, Spain, and France remain loyal to the Holy See. Venice, in Northern Italy, controls the spice trade, but is in a constant battle with the Hapsburgs. The Tudors of England are colonizing the New World, and in exchange for concessions, may return to the fold.

Despite this, the period between 1550-1570 represents one of comparative tranquility, as Europe collectively catches its breath.

Italy is divided into two states, and more and more two ways of life. In the north, in protestant Venice, the beginnings of industry are developing. Merchants who invested in the spice trade have begun developing large manufactories which use the power of the Po to process Egyptian cotton, and cloth from Northern Italy. The putting-out system develops, in an attempt by merchants to bypass guilds. Merchants loan equipment to small farming families, who complete a step in a production, and then receive a portion of the profits. The system spreads into the low countries, England, and northern Germany. Northern Italy, poor in resources in itself, trades textiles, spices, and other products for Imperial ore and lumber.

Economically, the canal has resulted in the dissolution of the remnants of the feudal system in Venetian Italy. Venetian banks and merchant houses have spread to the mainland, resulting in similar developments there.

Venice, at the close of the war of Polish succession, buys the title "King of Italy" from the Holy Roman Empire. This adds to the Doge’s long list of titles, which now include: Duke of Dalmatia, Sultan of Egypt, Podesta of Milan, and Prince of Verona. The new title represents the growing feeling of Italiano which has characterized Venice, and leads to one of the odder, longest landing, offshoots of the Renaissance.

Venice views itself as the successor to the Roman Republic. The professional, citizen-soldier army has helped to solidify Italy under Venetian control, and confiscating the lands from treacherous nobles (the Medicis) and the Church has allowed it to be broken up into small private farms for retired soldiers. For those who cannot receive land in Italy, of course, there is always a plantation in Brazil…

Also, the civil service is open to all citizens, and the Council of Ten has begun removing nobles from the ranks of the Great Council if they cannot pay the taxes. Italians in northern Italy are undecided on whether they are Venetians, or Italians, but most view themselves as a collective group.

Thus, literature in Italy stresses a commitment to the Roman ideals of Discipline, Hard work, and Education. These go hand in hand, of course, with those of the Federated Church. Documents from the Doge begin bearing the mark SPQV: The Senate and People of the Republic of Venice.

Southern Italy, on the other hand, remains mired in a backwater. Constant Venetian invasions, and brutal oppression by the French have dragged what was once a prosperous area into poverty. The nobles are now thoroughly French, but many hope for the Venetians to conquer the area.

The Empire is also changing. It has become more and more Germanic, to the chagrin of the Dutch. Phillip dies in 1556, but he is replaced with John Albert of Mecklenburg. Albert’s ascendancy triggers a minor civil war in the Catholic remnants of the South. They refuse to swear fealty, as the pope will (of course) not coronate him as Emperor. Although the rebels initially received support from the Hapsburgs, the Venetians cut off the supply of funds and weapons through the Alps, and the rebels die.

This does pose an interesting problem though. What happens to the Empire? The answer becomes obvious. The Empire becomes the Holy Roman Empire of the German Nation, which is but another name for the current Empire. Phillip is its first Emperor.

Located near the North Sea, he knows the value of commerce, and begins to revitalize the Imperial Fleet; and raise taxes on the nobles. Several proposals are floated for a joint navy for the Church, but while the two nations move closer in military spheres, they remain separate militaries. According to Albert, "Only an ally whose alliance is worthless trusts his ally completely."

On a darker note, the Hanseatic League, seeking easy profit, begins the Triangle Trade, selling slaves to Brazil and the Sugar Islands of the Carribean, and returning to Lubeck with the profits.

King Ferdinand I, the new King of Scandinavia, further cements his ties with the middle class. He also founds the town of Christiania (Oslo) in Norway. Although his reign is plagued by revolts among the Swedish nobility, Ferdinand develops the Kingdom’s natural iron deposits, and builds up a fleet which rivals that of England. He makes good use of the fleet, invading the remnants of the Teutonic Order in Prussia.

The Danes also make a halfhearted effort in the colonial rush, claiming the Bahamas.

Ladislas II, King of Poland, Hungary, and Lithuania, centralizes the three kingdoms into one crown, placing the sejum in Warsaw in 1559. The sejum, unfortunately, will overpower the kings of Poland in the future, dividing the kingdom.

Russia spends the time between 1550 to 1570 expanding East into Siberia. This movement was begun by the Cossacks, who in 1564, under the leader Yermak, conquered the Khanate of Sibir. The gateway to the Pacific was open. Ivan the Terrible, Czar of Russia, takes the opposite route of Ladislas. He crushes the nobles (boyars) and established a central, autocratic government, with the czar as absolute monarch.

Emperor Alexius, meanwhile, is considered to be one of the worst rulers since the 4th Crusade. He wastes the treasury, issues several edicts which inspire revolts amongst the Muslims, and his invasion of Persia fails miserably (thanks to Venetian backing, which will be detailed in the section on the Orient). Henry’s ambassador to the Byzantine court wrote that "one more emperor such as he, and the Republic will have nothing to fear from the Empire."

Henry VIII died in 1550, and is succeeded by his young son, Edward VI. Edward, the boy king, comes to the throne when he is 12 years old. Edward’s Uncle, the Earl of Seymour, becomes Regent for Scotland, England, and the Counties of Flanders and Artois. Under his reign, Protestantism continues apace, and the colony of New England is founded by Catholics fleeing persecution.

Scotland flares up in revolt at the instigation of the Catholic Church, but it is rapidly put down. Edward (the Earl, not the boy-king) grants concessions to the Scottish nobility, include grants of land, pacifying the nation. He also encourages the merging of the navies, which is completed by 1564.

Ireland is invaded once more in 1562, and is conquered. Catholic monasteries are burned, and the plantation of Meath is established, founded by Protestant Scots.

Edward also joins the Hapsburg alliance, coveting the rest of the Low Countries. But his reign also sees the beginnings of the cottage industry, copied from Venice.

Carlos, King of France, Spain, and Naples, personally welcome the Pope in Avignon. Clement gives a stirring speech on how this is the Church’s darkest hour, when the forces of heresy are preparing for the final war. He appoints Carlos as "Emperor of Christ, the West, and God willing, the World." Clement then makes some noises to sooth Ladislas, appointing him the Protector of the Faith. The creation of the Christian Empire backfires, as even the Catholics of England and Italy view this as a political move.

Carlos I dies, and is succeeded by his son, Filippo, in 1563. Not content with his current holdings, Phillip turns his eyes on Portugal, which has been, for the last 40 years, a Spanish vassal anyway. With the support of the Pope, King Sebastian dies, and Ferdinand, Duke of Mexico, is put forward as a candidate for the throne (his wife was a sister of Sebastian). Ferdinand gains the throne of Portugal after a Spanish invasion, and France, Portugal, and Spain are under the rule of the Christian Empire. With that task completed, Filippo begins construction of the Christian Armada, and sends messages to Alexus, Edward, Ferdinand, and Ladislas. Ferdinand politely declines, and begins sending messages to Albert and the Senate regarding an alliance, but Edward and Ladislas agree to support any moves against the nations of Venice and the Empire. In 1572, on Easter Sunday, the galleys of the Empire set sail.

Byzantine rule over the holy land is a rough and turbulent affair. There are strong Christian minorities, but much of the population is Muslim. Attempts to convert them fail, by and large. The area is brimming with revolt, and Venice is constantly encouraging it.

In a move of uncharacteristic genius, Alexius, in 1564, decreed that Muslims could remain free, but they are subject to heavier taxes. Alexus was probably only increasing taxes to supplement his treasury (the Emperor began, at the encouragement of one of his concubines, wearing jewels in his beards. Care to guess how many Byzantine theologists see references to the Pharoah in this?

Byzantine rule is made possible by support of the Christian minority, especially Syrians. The Syrians rule over a Muslim minority, and are uneasily caught between the Byzantine Greeks and the Muslim Arabs of the region. Some believe that the Persians may make a move for the region; but it is unknown if the Sunni Muslims would prefer Shi’ites over Orthodox. One Mufti, who is the leader of the Muslims of Jerusalem, says, "Better an infidel than a heretic."

Eypt, meanwhile, is enjoyed prosperity unseen since the Caliphate. The Venetian merchant, Vitale Falier, imported Indian cotton and a primitive cotton gin known as a charka from India in 1540, and the growth of the material has rapidly expanded.

In addition, Egypt also grows rice, some sugar cane, and a few other "oriental" crops. It exists as a depot for East and West, and has become more profitable than once imagined.

Revolts, of course, are common, particularly after bad harvests. But by 1560, Christianity has made significant inroads in Egypt once again, especially among the literate urban classes. The largest Christian religion is the Coptic Church. Venice has greatly encouraged the development of the Church, and there is talk of a council to hammer out the differences between it and the Federated Church.

Cyprus and Crete were victims of mass deportations of the Greek populace. The Senate and Council of Ten were fearful that the Greeks would welcome the Byzantines as their new rulers, and since 1540 began shipping them to the New World or to Egypt. This has had the welcome side affect of breaking the backs of the aristocracy of the two islands, who were largely French. In addition to producing cash crops, the islands are major naval bases for the defense of the canal, and with the completion of new fortifications at Fagamagusta in 1562, are expected to remain so.

North America is divided into two territories. Starting with the expeditions of Cabot in the early 15th century, English sailors have been fishing off of New Foundland, and sending men ashore for lumber. Fur quickly became a valuable commodity, and the trading post of Nieu Flandern became a thriving town by 1535. 1540 marked the effective beginning of New England, which centers around Massachusetts. New England was settled by Catholics fleeing persecution, and the populace rapidly expands.

Further South, New Scotland is founded in 1550, as a gift from Edward to the Scottish parliament. Technically, it is Scottish territory, but as the two kingdoms have the same monarch, for all essential purposes it is English territory. New Scotland (some times called by its Latin name, Nova Scotia) is located roughly where Baltimore would be. Tobacco cultivation is a cash crop for the area, and younger sons of Scottish nobles often emigrate there to raise it. As a consequence, Glasgow becomes a flourishing center of the tobacco trade, and a canny Scottish merchant develops cigarettes, when he begins selling the scraps in small rolls of paper to the poor.

After Nova Scotia, there is a wide buffer zone (roughly encompassing north Carolina) before one enters New France, part of the Christian Empire. New France is largely undeveloped, as the French Hugenots can’t afford to leave France, and the Christian Emperor has no use for the land. There’s no gold, after all.

The Carribean is a mess. Cuba is Imperial (Spanish), the Bahamas Danish (Christian wanted to flex his muscles outside of the Baltic), Puerto Rico a Venetian outpost, and England holding Haiti, Guadelope, Jamaica, and the Virgin Islands. The Empire has taken Trinidad and Tobago, but it is uncertain how long the islands can support this many players. Piracy runs rampant, as everyone engages in privateering on one another.

Mexico is known as the Duchy of Nueva Aragon, and is controlled by Ferdinand, now King of Portugal. The economienda system has been imported from Southern Spain, and the natives have been wiped out, toiling away on plantations and silver mines. The limpios (pure) are the large landowners, while the cities are home to the poorer populace of Spain. In recent years, dispossessed peasants from France have emigrated to New Aragon and Peru, and many end up in the city.

Trade with New Aragon is restricted to Christian ships officially, but it is not uncommon to see a Venetian ship in the port, trading gold for spices. Occasionally an honest Spanish official will stop them, and this has heightened tensions between the two nations. Venetians continue to harass the fringes of the Spanish Empire, supplying guns to the Mayans in the jungles of the Yucatans, and to the tribes to the north of Nueva Aragon.

Chile is another profitable mining territory, but the gold follows a circuitous route up the coast to Panama.

After the fiasco involving the League and Newfoundland, Emperor Phillip established firm Imperial control of all trade abroad. German South America, known as Atlantica, runs roughly from Curitaba to the Ferdinands (Falklands). The chief colony if Phillipsburg, located on the Bay of Sconset. Various religious dissidents have fled from the Empire, and the area has developed a society which best resembles colonial Pennsylvania. It is the most densely populated territory of the colonies, and thanks to the trading agreements with the Venetians, is part of the Triangle Trade. In particular, it is home to a rapidly growing portion of the Imperial fleet, and several of its leading burghers have expressed desires to take Peru. Venetian merchants have invested extensively in ships and join-stock companies that participate in the slave trade, and the city of New Berlin is the center of most privateering operations in the Pacific.

Currently, there are only 3 free cities in German territory. As the population grows, though, there is a demand for greater say in Imperial government. The population reaches 400,000 by 1570.

In the early 16th century, the Portuguese began setting up factories, much like their ones in Africa, along the coast of Brazil. The Venetians were following them as well, and the two began an unofficial trading war for Brazil wood. But the Venetians planted the first colony, and in 1520 planted the city of Berretta (named after the Berretta trading family, who financed the expedition) in the site of OTL Recife. As the Venetians didn’t try to force the natives to convert, they had popular support, and muscled the Portuguese out of the market. Greeks were deported in the 1550’s to resettle the cities, along with the surplus population of Sicily. The end result is a system of small landowners intermingling with a population of gentry. Coffee is beginning to be introduced, as the drink is spreading across Europe from Egypt, making Verona one of the thriving ports on the coasts. (the Gold of Minas Gerais will be discovered towards the end of the century).

The Portuguese were very successful in trading for slaves in northwest Africa, but gradually they fell into a decline. Although the Spanish would happily buy the slaves and ivory, Hanseatic merchants expanded further south, and supported tribes in West-Central Africa. Portugal was unable to develop a market in Brazil, where Venetian tariffs kept them out, but welcomed the Hanseatic League, or in English north America, which did not need a slave population until the end of the 16th century. Thus, their empire proved to be the least valuable of them.

This was the scene when Phillip began Hanseatic expeditions to Africa. Although German merchants were making money through the canal (indeed, they monopolized trade with China), they were hoping to establish a monopoly on one good that would be readily sellable to the Venetians. Slaves were the unfortunate result, and a triangle trade was established. Slaves would be sold in Verona, which would sell tropical goods, such as coffee, sugar, and cotton for Western Europe (the Venetians had no problem with other Italians in the new world developing industries; after all, they were also citizens, with the same rights. For now).

The German merchants would sell the products in Flemish and German ports, thus earning a tidy sum. The Republic frowns on slavery, but views itself as having little other options for raising the crops.

Improvements in ship design have made it easier for nations to compete with the canal, as the waters around the canal are relatively calm. Venetians would dearly appreciate a way to sail without wind.

Once the Canal opened, it was a foregone conclusion who would dominate the Indies. Venice took Calicut from a Muslim ruler, and expanded across the subcontinent, especially the coast. An expedition established a foothold on the East Coast, and only Sri Lanka remains in the hands of the Christian Empire. The English have made attempts to trade with India, but such attempts have largely been unsuccessful.

In the East Indies, Venetians captured Malacca in a quick battle in 1527, and have since expanded across Java, Ternate, and Tindore. The British, though, have lately begun making an appearance, and have established a colony near Mindanao.

In 1564, members of the Royal Cathay Trading Company negotiated an agreement with Nippon. The Royal Cathay company encourages the daimyo Nobunaga to equip his armies with muskets, and he is so impressed by the missionaries of the protestants that he allows them to preach. He crushes his fellow warlords, Hideyoshi and Obunaga, and establishes himself as Shogun of Japan. He also encourages free trade, castle building, and in 1572 invades Korea.

Ever since the reign of the Shah Tahsmap began, the Venetians have had trading contacts in Persia. They approach him with the offer to train his military with Venetian weapons, and he accepts. Persia, already strengthened by the infusion of Ottoman nobles, Lebanonese merchants, and other refugees from Byzantium, deploys an army equipped with muskets against the Byzantines when they invade the Euphrates. He chases the Byzantines west, and actually besieges Antioch in 1566. Tahsman renounces Shiiteism (most of his population is Sunni still) and declares that the Abassids (the caliphate’s dynasty) has been in hiding amongst the Persians. No one believes it, but Persia is still viewed as the leader of Dar-Islam. Eastern products such as rugs and silk are traded along the canal, and in 1567 the first Qu’ran is printed by a printing press in Ishafan. Tashmap’s gunpowder army smashes the tribes, and establishing the Shah as the supreme head of Persia.