A surviving Kingdom of Italy in the 10th century

Hnau

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What if, instead of King Otto I of Germany taking the Italian throne and creating the Holy Roman Empire, the native dynasty retains power?

Wikipedia said:
In 888, with the death of Emperor Charles the Fat, the empire of Charlemagne was permanently divided into four kingdoms: East Francia, West Francia, Kingdom of Burgundy, and the Kingdom of Italy with each of the four realms being ruled by their own kings. Though the Pope in Rome continued to appoint the kings of Italy as "Emperor" to rule Charlemagne's empire, these "Italian Emperors" never exercised any authority north of the Alps. With the assassination of Emperor Berengar I of Italy in 924, the last nominal heir to Charlemagne was dead and the title "Emperor" was left unclaimed.

King Rudolf II of Upper Burgundy, and Hugh, Count of Provence and effective ruler of Lower Burgundy, held competing claims to the vacant throne of Emperor in Italy. By 926, Hugh forced Rudolf to flee Italy, establishing de facto control over the Italian peninsula. Hugh later induced the Italian nobility to recognise his son Lothair II of Italy as their next king and crowned him in April 931. Hugh and Rudolf II eventually concluded a peace treaty in 933, with Rudolf II renouncing his claims to the Italian throne and Hugh granting control over Lower Burgundy to Rudolf II, which he combined with Upper Burgundy into a new Kingdom of Burgundy. To seal the peace, Rudolf II betrothed his infant daughter Adelaide to Hugh's son Lothair.

In 940, Margrave of Ivrea Berengar II, the grandson of former King Berengar I, led a revolt of Italian nobles against his uncle, Hugh. Forewarned by Lothair, Hugh exiled Berengar II from Italy and Berengar II fled to the protection of [King Otto of Germany]. In 945, Berengar II returned from exile in Germany and was welcomed by the Italian nobility. With the aid of hired mercenaries, Berengar II defeated Hugh in battle and forced him into permanent retirement in Provence. As part of the peace negotiations, Hugh was allowed to remain nominal king of Italy with Berengar II as the decisive power behind the throne. Lothair finally married the sixteen-year-old Adelaide on 16 December 947. When Hugh died on 10 April 948, his son Lothair succeeded him as nominal king, but Berengar II continued to hold all real power.

Lothair's brief "reign" came to an end with his death on 22 November 950, presumably poisoned by Berengar II, leaving Adelaide widowed before her twentieth birthday. Berengar II crowned himself king with his son Adalbert of Italy as his co-ruler and heir apparent. Failing to receive widespread support for his right to the crown, Berengar II attempted to legitimize his reign and tried to force Adelaide, the respective daughter, daughter-in-law and widow of the last three Italian kings, into marriage with Adalbert. Adelaide fiercely refused and was imprisoned by Berengar II at Garda Lake. With the help of Count Adalbert Atto of Canossa, she managed to escape from imprisonment. Besieged by Berengar II in Canossa, Adelaide sent an emissary across the Alps seeking Otto’s protection and marriage. Otto, widowed since 946, knew a marriage to Adelaide would allow him to fulfill his ambition of ruling Italy and, ultimately, claiming the imperial crown as Charlemagne’s true heir. Knowing of Adelaide’s great beauty and immense wealth, the thirty-eight-year-old Otto accepted nineteen-year-old queen's marriage proposal and prepared for an expedition into Italy.

The expedition was successful. By taking Italy, King Otto I of Germany established the Holy Roman Empire. The Point-of-Divergence is this: during Berengar II's revolt against Hugh in 940, Berengar is NOT forewarned by Lothair of the impending attack. Instead of fleeing to Germany, Berengar is killed in the fighting. Lothair goes on to marry Adelaide as IOTL and takes de facto control of the kingdom when his father dies in 948. He is never poisoned. Adelaide remains happily married to Lothair and Otto never has his chance to secure the Italian throne.

How do you think the Kingdom of Italy would fair under Lothair II, and what divergences might happen elsewhere?

It is important to note that many historians believe that when the Italian throne went to a distant German who rarely visited the region, it made it possible for the merchant families, local nobility and cities to assert themselves in the power vacuum. If the Italian kings check the rise of the cities and merchants, northern Italy will be much less divisive in the 13th, 14th, and 15th centuries. Some say that it was precisely this divisiveness and lack of monarchical power that fueled the intellectual competitiveness that fostered the Italian Renaissance. What do you think?
 
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It is important to note that many historians believe that when the Italian throne went to a distant German who rarely visited the region, it made it possible for the merchant families, local nobility and cities to assert themselves in the power vacuum. If the Italian kings check the rise of the cities and merchants, northern Italy will be much less divisive in the 13th, 14th, and 15th centuries. Some say that it was precisely this divisiveness and lack of monarchical power that fueled the intellectual competitiveness that fostered the Italian Renaissance. What do you think?

Well, Renaissance is quite far ahead, and even communal era at this point.
I'd argue that Italy being where it is, she's somewhat bound to become a centre of trade and cultural exchange anyway. After all, the Emperors for quite a while were not all that distant, tending to spend in Italy as much time than in Germany if not more and being generally more concerned with Italy overall. And indeed, Germany DID develop self-governing urban life and DID decentralize a lot, though in a very different way. Of course, if you have two different dynasties with a focus on Germany and Italy respectively, as opposed to an Emperor forced to part his attention between the two, you might see some more effective effort at centralization. In the case of Italy however this is going to be tricky, with the Pope quite likely to prove a pain in the ass for any royal attempt at centralized unchallenged rule. By the way, this would affect heavily the rise of the Papacy as a universally recognized spiritual power. Key characters like Gerbert d'Aurillac (Pope Sylvester II) would likely never come to Rome.
Which, thinking of it, would be quite huge in itself.
 
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