2 An emperor and a king (1521-1556)

thumb Charles I, King of Spain and Holy Roman Emperor (r. 1516-1556)

In 1521, the Edict of Worms denounced the German reformer Martin Luther, and Charles V, at that point only twenty-one years old, was compelled to divert his attentions to Germany to deal with the crisis of the Reformation. In 1524, one of Luther’s former adherents, Thomas Müntzer led a massive revolt of the German peasantry against the German religious and secular authorities, resisting militantly the perceived excesses and absurdities of the Catholic Church in Germany. The Peasants' War, though put to an end in 1526, demonstrated to Charles the need for stability and order, and in the succeeding years his policy in Germany aimed to establish a permanent and stable order in the Empire.

Charles’s victory at the Battle of Pavia surprised many Italians and Germans and concerned them that Charles would endeavor to gain ever greater power. The papacy switched sides and joined forces with France and prominent Italian states against the Habsburg Emperor in the aftermath. (see War of the League of Cognac ) In 1527, Charles grew exhausted with the pope’s meddling in what he viewed as purely secular affairs, and sacked Rome itself, embarrassing the papacy sufficiently enough that succeeding popes, and Pope Clement VII himself, were considerably more circumspect in their dealings with secular authorities: in 1533, Clement’s refusal to annul Henry VIII of England’s marriage was a direct consequence of his unwillingness to offend the emperor and have his capital perhaps sacked a second time.

King Francis I of France (r. 1515-1547)

In 1543, Francis I, king of France, announced his surprising alliance with the Ottoman sultan, Suleiman the Magnificent by occupying the Spanish-controlled city of Nice together with Turkish forces. Henry VIII of England, who bore a greater grudge against France for being there than he held against the Emperor for standing in the way of his divorce, joined Charles in his invasion of France. Although the Spanish army was soundly defeated at Ceresole , in Savoy, Henry fared better and France was forced to accept terms. The Austrians, led by Charles’s younger brother Ferdinand, continued to fight the Ottomans in the east. Charles went to take care of an older problem: the Schmalkaldic League.

200px Charles V, Holy Roman Emperor at his victory over the Protestants at the Battle of Mühlberg (1547)

The Protestants, after the chaos of the Peasants’ War, had organized themselves into a defensive league to protect themselves from the Emperor Charles. Under the protection of the Schmalkaldic League, the Protestant states had committed a number of outrages in the eyes of the Catholic Church— the confiscation of some ecclesiastical territories, among other things— and had impiously defied the authority of the Emperor. The League had allied itself to the French, but Francis’s defeat in 1544 led to the annulment of that alliance. Charles invaded Germany hoping to restore the Imperial authority. His loyalty to the Catholic cause, however, was doubtful; he backed the principle of “ cuius regio, eius religio” where the rulers of states were free to dictate the religion of their subjects, a principle that was unpopular among conservative Italian and Spanish bishops. He failed to get the support of the Council of Trent in 1545 behind his proposal, and the Protestant leadership, feeling betrayed by the Catholic absolutism at the council, went to war, led by the Saxon elector Maurice . Charles personally inflicted a terrible defeat on the Protestants at the Battle of Mühlberg in 1547. In 1555, Charles signed the historic Peace of Augsburg with the Protestant states and restored stability in Germany on his principle of “cuius regio, eius religio.” A year later, Charles abdicated to a monastery at Yuste, dying in 1558.

3 St. Quentin to Lepanto (1556-1571)

The celebrations following the Peace of Cateau-Cambrésis (1559) between Spain and France

Spain was not yet at peace, however; the aggressive Henry II of France rose to the throne in 1547 and immediately renewed conflict against Spain. Charles’s successor, Philip II of Spain, aggressively prosecuted the war against France, crushing a French army at the Battle of St. Quentin in Picardy in 1558 and defeating Henry again at the Battle of Gravelines. The Peace of Cateau-Cambrésis, signed in 1559, permanently recognized Spanish claims in Italy. In the celebrations that followed the treaty, Henry was killed by a stray splinter from a lance. France was stricken for the next thirty years by chronic civil war and unrest (see French Wars of Religion) and removed from effectively competing with Spain and the Habsburg family in European power games. Freed from French effective opposition, the period 1559- 1643 saw the apogee of Spanish might and territorial power.

King Philip II of Spain (r. 1556-1598)

Charles and his successors, even while they may have been most comfortable and most fond of Spain, often regarded it as part of their empire rather than the reason for it as France, England, and the Netherlands would. Achieving the political goals of the Habsburg dynasty – which meant in particular undermining the power of France, maintaining Habsburg, Catholic hegemony in Germany, and suppressing the Ottoman Empire – was more important to the Habsburg rulers than the welfare of Spain. This would contribute to the decline of Spanish power.

The Spanish Empire had grown substantially since the days of Ferdinand and Isabella. The Aztec and Inca Empires were conquered during Charles reign, from 1519 to 1521 and 1540 to 1558, respectively. Spanish settlements were established in the new world – Florida was colonized in the 1560s, Buenos Aires was established in 1536, and New Granada (modern Colombia) was colonized in the 1530s. Manila, in the Philippines, was established in 1572. The Spanish Empire abroad became the source of Spanish wealth and power, but contributed to inflation and instead of fueling the Spanish economy made Spain dependent on foreign sources of raw materials and manufactured goods. The economic and social revolutions taking place in France and England were nonexistent in Spain.

The Battle of Lepanto (1571), marking the end of the Ottoman Empire as the dominant naval power in the Mediterranean

After Spain’s victory over France and the beginning of France’s religious wars, Philip’s ambitions began to grow. The Ottoman Empire had long menaced the fringes of the Habsburg dominions in Austria and Africa, and in response Ferdinand and Isabella had sent expeditions to North Africa, capturing Melilla in 1497 and Oran in 1509. Charles had preferred to suppress the Ottomans through a considerably more maritime strategy, hampering Ottoman landings on the Venetian territories in the Eastern Mediterranean. Only in response to raids on the eastern coast of Spain did Charles personally lead attacks against the African mainland ( 1545). In 1565, the Spanish defeated an Ottoman landing on the strategic island of Malta, defended by the Knights of St. John. Suleiman the Magnificent’s death the following year and his succession by Selim the Sot, whose true abilities as sultan defied all underestimation, emboldened Philip, and he resolved to carry the war to the sultan himself. In 1571, a Spanish-led expedition annihilated the Ottoman fleet at the Battle of Lepanto in one of the most decisive battles in naval history. The battle ended the Ottoman naval threat to the Western Mediterranean and marked a period of decline for the Ottoman Empire.

4 The trouble with the Dutch (1571-1598)

200px William the Silent, Stadtholder of the Netherlands (r. 1572-1584)

The time for rejoicing in Madrid was short-lived. In 1566, Calvinist-led riots in the Spanish Netherlands (inherited by Philip from Charles and his Burgundian ascendants) prompted the Duke of Alba to march into the country and restore order. In 1568, William the Silent led a failed attempt to drive the tyrannical Alba from the Netherlands. The Spanish, who derived a great deal of wealth from the Netherlands and particularly from the vital city of Antwerp, were committed to restoring order and maintaining their hold on the provinces. In 1572, a band of rebel Dutch privateers known as the geuzen or ‘Sea Beggars’ seized a number of Dutch coastal towns and proclaimed their support for William and denounced the Spanish leadership. The Eighty Years' War had begun.

The Relief of Leiden (1574) after the Dutch had broken their dykes in the Eighty Years' War

For Spain, the war was a slow-moving disaster. In 1574, the Spanish army under Luis de Requeséns was repulsed from the Siege of Leiden after the Dutch broke their dykes. In 1576, faced with the bills from his 80,000-man army of occupation in the Netherlands and the massive fleet that had won at Lepanto, Philip was forced to accept bankruptcy. The army in the Netherlands mutinied not long after, seizing Antwerp and looting the southern Netherlands, prompting the previously peaceful southern provinces to join the rebellion. The Spanish chose the route of negotiation, and pacified the southern provinces again with the Union of Arras in 1579.

The Dutch crisis seemed to subside with the Arras agreement, and in 1580, the Spanish found yet another stroke of good fortune: Cardinal Henry of Portugal, the last member of the Portuguese royal family, had died. Philip’s controversial inheritance of Portugal was assured by the Duke of Alba, who seized Lisbon in June. The Duke of Alba and the Spanish occupation, however, was little more popular in Lisbon than in Rotterdam. The combined Spanish and Portuguese empires placed into Philip’s hands almost the entirety of the explored New World along with a vast trading empire in Africa and Asia.

The Spanish Armada (1588)

Portugal required an extensive occupation force to keep it under wraps, and Spain was still reeling from the 1576 bankruptcy. In 1584, William the Silent was assassinated by a half-deranged Catholic, and the death of the popular Dutch resistance leader was hoped to bring an end to the war. It did not. In 1586, Queen Elizabeth I of England, sent support to the Protestant causes in the Netherlands and France, and Sir Francis Drake launched attacks against Spanish merchants in the Carribean, the Pacific, along with a particularly aggressive attack on the port of Cadiz. In 1588, hoping to put a stop to Elizabeth’s meddling, Philip sent the Spanish Armada to attack England. The disastrous result began Spain’s decline as the queen of the seas.

Spain had invested itself in the religious warfare in France after Henry II’s death. In 1589, Henry III, the last of the Valois lineage, died at the walls of Paris. His successor, Henry IV of Navarre, the first Bourbon king of France, was a man of great ability, winning key victories against the Catholic League at Arques (1589) and Ivry ( 1590). Committed to stopping Henry of Navarre from becoming King of France, the Spanish divided their army in the Netherlands and invaded France in 1590.

5 "God is Spanish" (1596-1626)

King Philip III of Spain (r. 1598-1621)

Faced with wars against England, France, and the Netherlands, each led by extraordinarily capable leaders, already-bankrupted Spain was outmatched. Faced with continuing piracy against its shipping in the Atlantic and the disruption of its vital gold shipments from the New World, Spain was forced to admit bankruptcy in 1596. The Spanish attempted to extricate themselves from the several conflicts they were involved in, first signing the Treaty of Vervins with France in 1598, recognizing Henry IV (since 1593 a Catholic) as King of France, and restoring many of the stipulations of the previous Peace of Cateau-Cambrésis. A treaty with England was agreed upon in 1604, following the accession of the more tractable Stuart King James I.

Peace with England and France implied that Spain could focus her energies on restoring her rule to the Dutch provinces. The Dutch, led by Maurice of Nassau, perhaps the greatest strategist of his time and the son of William the Silent, had succeeded in taking a number of border cities since 1590, including the fortress of Breda. Following the peace with England, the new Spanish commander Ambrosio Spinola pressed hard against the Dutch. Spinola, a general of abilities to match Maurice, was only prevented from conquering the Netherlands only by Spain’s bankruptcy in 1607. Face with ruined finances, in 1609, the Twelve Years' Truce was signed between Spain and the United Provinces. Spain was at peace.

The Duke of Lerma, Philip III's chief minister

Spain made a fair recovery during the truce, ordering her finances and doing much to restore her prestige and stability in the run-up to her last truly great war in which she would play as a leading power. Philip II’s successor, Philip III, was a man of limited ability and mainly uninterested in politics, preferring to allow others to take care of the details. His chief minister was the capable Duke of Lerma. Lerma, a financial wizard, succeeded in turning Spain’s account books around and made himself one of the richest men in Europe (a fortune of 44 million thalers) Lerma’s personal success attracted him enemies and (well-founded) criticism of corruption; in 1618, the king replaced him with Don Balthasar de Zúñiga .

While the Duke of Lerma (and to a large extent Philip II) had been disinterested in the affairs of their ally, Austria, Zúñiga was a veteran ambassador to Vienna and believed that the key to restraining the resurgent French and eliminating the Dutch was a closer alliance with Austria. In 1618, beginning with the Defenestration of Prague, Austria and the Holy Roman Emperor, Ferdinand II, embarked on a campaign against the Protestant Union and Bohemia. Zúñiga encouraged Philip to join the Austrian Habsburgs in the war, and Ambrogio Spinola, the rising star of the Spanish army, was sent at the head of the Army of Flanders to intervene. Thus, Spain entered into the Thirty Years’ War.

The Surrender of Breda (1625) to Ambrosio Spinola, by Velazquez

In 1621, the inoffensive and ineffective Philip III was replaced by the considerably more religious Philip IV. The following year, Zúñiga was replaced by Gaspar de Guzman, Count-Duke of Olivares, a reasonably honest and able man who believed that the center of all Spain’s woes rest in Holland. After certain initial setbacks, the Bohemians had been defeated at White Mountain in 1621, and again at Stadtlohn in 1623. The war with the Netherlands was renewed in 1621 with Spinola taking the fortress of Breda in 1625. The intervention of Christian IV of Denmark into the war worried some (Christian was one of Europe’s few monarchs who had no worries over his finances) but the victory of the Imperial general Albert of Wallenstein over the Danes at Dessau Bridge and again at Lutter , both in 1626, eliminated that threat. There was hope in Madrid that the Netherlands might finally be reincorporated into the Empire, and after the defeat of Denmark the Protestants in Germany seemed crushed. Perfidious France was once again involved in her own instabilities (the famous Siege of La Rochelle began in 1627), and Spain's eminence seemed irrefutable. The Count-Duke Olivares stridently affirmed “God is Spanish and fights for our nation these days,” and many of Spain’s opponents may have grudgingly agreed.

6 The road to Rocroi (1626-1643)

200px Gaspar de Guzman, Count-Duke of Olivares, Philip IV's chief minister

Olivares was a man sadly out of time; he realized that Spain needed to reform, and to reform it needed peace. The destruction of the United Provinces of the Netherlands was added to his list of necessities because behind every anti-Habsburg coalition there was Dutch money, and everywhere in the world Dutch entrepreneurship and colonists undermined Spanish and Portuguese hegemony. Spinola and the Spanish army were focused on the Netherlands, and the war seemed to be going in Spain's favor.

King Philip IV of Spain (r. 1621-1665) by Velazquez

1627 saw the collapse of the Castilian economy. The Spanish had been debasing their currency to pay for the war and prices exploded in Spain just as they had in previous years in Austria. Until 1631, parts of Castile operated on a barter economy as a result of the currency crisis, and the government was unable to collect any meaningful taxes from the peasantry, depending itself on its colonies. The Spanish armies in Germany resorted to "paying themselves" on the land. Olivares, who had backed certain tax measures in Spain pending the completion of the war, was further blamed for an embarrassing and fruitless war in Italy (see War of the Mantuan Succession ) The Dutch, who during the Twelve Years’ Truce had made their navy a priority, had devastated Spanish maritime trade, on which Spain was wholly dependent after the economic collapse. The Spanish, after the destruction of the Armada, were simply unable to cope with naval threats.

In 1630, Gustavus Adolphus of Sweden, one of history’s most noted commanders, landed in Germany and relieved the port of Stralsund that was the last stronghold on the continent held by German forces belligerent to the Emperor. Gustavus then marched south winning notable victories at Breitenfeld and Lutzen, attracting greater support for the Protestant cause the further he went. The situation for the Catholics improved with Gustavus's death at Lutzen in 1632 and a key victory at Nordlingen in 1634. From a position of strength, the Emperor approached the war-weary German states with a peace in 1635; many accepted, including the two most powerful, Brandenburg and Saxony. Then France entered.

The Battle of Rocroi (1643), the symbolic end of Spain as a great power.

The intrepid Cardinal Richelieu had been a strong supporter of the Dutch and Protestants since the beginning of the war, sending funds and equipment in an attempt to stem Habsburg strength in Europe. Richelieu decided that the recently-signed Peace of Prague was contrary to French designs and declared war on the Holy Roman Emperor and Spain within months of the peace being signed. The more experienced Spanish forces scored initial successes; Olivares ordered a lightning campaign into northern France from the Spanish Netherlands, hoping to shatter the resolve of King Louis XIII's ministers and topple Richelieu. In the "année de Corbie", 1636, Spanish forces advanced as far south as Corbie, threatening Paris and quite nearly ending the war on their terms. After 1636, however, Olivares was fearful of provoking another bankruptcy, and the Spanish army never made it as far. At the Battle of the Downs in 1639 a Spanish fleet was decimated by the Dutch navy, and the Spanish found themselves unable to supply their forces in the Netherlands. The Spanish Army of Flanders, which represented the finest of Spanish soldiery and leadership, faced a French invasion led by Louis II de Bourbon, Prince de Condé in the Spanish Netherlands at Rocroi in 1643. The Spanish, led by Francisco de Melo , were devastated, with most of the Spanish infantry slaughtered or captured by French cavalry. The high reputation of the Army of Flanders was broken at Rocroi, and with it, the grandeur of Spain.

7 Spanish society and the Inquisition (1516-1700)

An auto de fe, painted by Francisco Ricci , 1683

The Spanish Inquisition was formally launched during the reign of the Catholic Monarchs, continued by their Habsburg successors, and only ended in the nineteenth century. Under Charles I the inquisition became a formal department in the Spanish government, hurling out of control as the sixteenth century progressed. Charles also passed the Limpieza , a law that excluded those not of pure Old Christian, non-Jewish blood from public office. Although torture was common in Europe, the way the Inquisition was practiced encouraged corruption and betrayal, and it became a driving factor in the decay of Spanish power. It became a method for enemies, jealous friends and even quarreling relations to usurp influence and property. An accusation, even if largely unfounded, led to a long and agonizing trial that might take years before coming to a verdict, during which time the accused's reputation and esteem was destroyed. The notorious auto de fe was a combination of public humiliation of the repentant and a gross spectacle of human torture for the "guilty."

Although Charles continued the practice of the inquisition, Philip II greatly expanded it and made church orthodoxy a goal of public policy. In 1559, three years after Philip came to power, students in Spain were forbidden to travel abroad, and the heads of the Inquisition were placed in charge of censorship, and books could no longer be imported. Philip vigorously tried to excise Protestantism out of Spain, holding innumerable campaigns to eliminate Lutheran and Calvinist literature from the country, hoping to avoid the chaos taking place in France.

Saint Theresa of Avila's Vision of the Dove by Peter Paul Rubens

Saint Ignatius of Loyola

The church in Spain had been purged of many of its administrative excesses in the fifteenth century by Cardinal Ximenes , and the Inquisition served to expurgate many of the more radical reformers who sought to change church theology as the Protestant reformers wanted. Instead, Spain became the scion of the Counter-reformation as it emerged from the Reconquista. Spain bred two unique threads of counter-reformationary thought in the persons of Saint Theresa of Avila and the Basque Ignatius Loyola. Theresa advocated strict monasticism and a revival of more ancient traditions of penitence. She experienced a mystical ecstasy that became profoundly influential on Spanish culture and art. Ignatius Loyola, founder of the Jesuit Order, was influential across the world in his stress on spiritual and mental excellence an contributed to a resurgence of learning across Europe. In 1625, a peak of Spanish prestige and power, the Count-Duke of Olivares established the Jesuit colegia imperial in Madrid to train Spanish nobles in the humanities and military arts.

The expulsion of the Moriscos from Valencia

The Moriscos of southern Spain had been forcibly converted to Christianity in 1502, but under the rule of Charles I they had been able to obtain a degree tolerance from their Christian rulers. They were allowed to practice their former custom, dress, and language, and religious laws were laxened. In 1568, however, under Philip, the Moriscos rebelled (see Morisco Revolt ) after the old laws were enforced again. The revolt was only put down by Italian troops under Don John of Austria, and even then the Moriscos retreated to the highlands and were only defeated in 1570. The revolt was followed by a massive resettlement program in which 12,000 Christian peasants replaced the Moriscos. In 1609, on the advice of the Duke of Lerma, Philip III expelled the 300,000 Moriscos of Spain.

The " Enlightenment" chiefly critiqued the Spanish for excessive religious zeal and "laziness." Among the aristocracy, who enjoyed increasing security in their positions of power unlike their colleagues in France and England who were increasingly competitive, the argument of "Spanish sloth" might apply. The expulsion of the industrious Moriscos and Jews certainly did little to help the Spanish economy and society that relied on their work and expertise far more than the Christians realized.

8 The Spanish bureaucracy (1516-1700)

The Seville House of Trade , today the Archive of the Indies

The Spanish received a massive influx of gold from the colonies in the New World as plunder when they were conquered, much of which Charles used to prosecute his wars in Europe. It was not until the 1540s that large deposits of silver were found at Potosí and Guanajuato and a steady source of income was obtained. The Spanish left mining to private enterprise but instituted a tax known as the "quint" whereby a fifth of the metal was collected by the government. The Spanish were quite successful in enforcing the tax throughout their vast empire in the New World; all bullion had to pass through the House of Trade in Seville, under the direction of the Council of the Indies . The supply of mercury, vital to extracting silver from the ore, was controlled by the state and contributed to the rigor of Spanish tax policy.

A Spanish Galleon, the symbol of Spain's maritime empire.

Although the initial conquests in the Americas provided sharp spikes in gold from the colonies, it was not until the 1550s that gold imports became a regular and vital source of Spain's income. Inflation - both in Spain and in the rest of Europe - was primarily caused by debt; Charles had conducted most of his wars on credit, and in 1557, a year after he abdicated, Spain was forced into its first bankruptcy.

Faced with the growing threat of piracy, in 1564 the Spanish adopted a convoy system far ahead of its time, with treasure fleets leaving the Americas in April and August. The policy proved efficient, and was quite successful. Only two convoys were captured - in 1628 when one was captured by the Dutch, and another in 1656 captured by the English. However, even without being completely captured, the convoys came under attack and Dutch and English privateers devastated trade along the American and Spanish coastlines.

Allegory on Charles V as ruler of the World by Peter Paul Rubens

The growth of Spain's empire in the New World was accomplished without the close direction of the leadership in Madrid. Charles I and Philip II were primarily concerned with their duties in Europe, and thus control of the Americas was handled by viceroys and colonial administrators who operated with virtual autonomy from Madrid. The Habsburg kings regarded their colonies as feudal assocations rather than integral parts of Spain. The Habsburgs, whose family had traditionally ruled over diverse, noncontiguous domains and forced to devolve autonomy to local administrators, replicated those feudal policies in Spain, particularly in the Basque country and Aragon.

200px Gaspar de Guzman, Count-Duke of Olivares, reformist chief minister of Philip IV of Spain

This meant that taxes, infrastructure improvement, and internal trade policy was defined independently by each region, leading to conflicting policies even within the Habsburg domains. Charles I and Philip II had been able to master the various courts through their impressive political energy, but Philip III and IV allowed it to decay, and Charles II was wholly incapable of controlling them. The development of Spain itself was hampered by the fact that Charles I and Philip II spent most of their time abroad; for most of the sixteenth century, Spain was administrated from Brussels and Antwerp, and it was only during the Dutch Revolt that Philip returned to Spain, where he spent most of his time in the seclusion of the palace of El Escorial. The patchy empire, held together by one monarch chaining together a bloated bureaucracy, unraveled when that monarch was weak.

There were attempts to reform the antiquated Spanish bureaucracy. Charles, on becoming king, clashed with his nobles during the Castilian War of the Communities when he attempted to fill government positions with effective Dutch and Flemish officials. Philip II encountered major resistance when he tried to enforce his authority over the Netherlands, contributing to the rebellion in that country. The Count-Duke of Olivares, Philip IV's chief minister, always regarded it as essential to Spain's survival that the bureaucracy be centralized; Olivares even backed the full union of Portugal with Spain, though he never had an opportunity to realize his ideas. After Charles abdicated, the bureaucracy became increasingly bloated and increasingly corrupt until, by Olivares's dismissal in 1643, it had become obsolete.

9 The Spanish economy (1516-1700)

The city of Zaragoza, painted by Velazquez

Like most of Europe, Spain had suffered during the fourteenth and fifteenth centuries from famine and plague. By 1500, Europe was beginning to emerge from that, and populations began to explode - Seville, which was home to 60,000 people in 1500 burgeoned to 150,000 by the end of the century. There was a substantial movement to the cities of Spain to capitalize on new opportunities as shipbuilders and merchants to service Spain's impressive and growing empire.

Inflation in Spain, as a result of state debt and the importation of gold from the New World, triggered hardship for the peasantry. The average cost of goods quintupled in the sixteenth century in Spain, led by wool and grain. While reasonable when compared to the twentieth century, prices in the fifteenth century moved very little, and the European economy was shaken by the so-called price revolution. Spain, which along with England was Europe's only producer of wool, initially benefited from the rapid growth. However, like in England, there began in Spain an enclosure movement that stifled the growth of food and depopulated whole villages whose residents were forced to move to cities.

The Harvesters by Pieter Brueghel the Elder

Sheep-farming was practiced extensively in Castile, and grew rapidly with rising wool prices with the backing of the king. Herds of sheep were annually moved from the mountains of the north to the warmer south every winter, ignoring state-mandated trails that were intended to prevent the sheep from trampling on farmland. Complaints lodged against the shepherd's guild, the Mesta, were ignored by Philip II who received a great deal of revenue from wool. Eventually, Castile became barren, and Spain was wholly dependent on imported food that, given the cost of transportation and the risk of piracy, was far more expensive in Spain than elsewhere. As a result, Spain's population grew much slower than France's; by Louis XIV's time, France had a greater population than Spain and England combined.

150px Jakob Fugger, the banker who financed Charles I

Credit emerged as a widespread tool of Spanish business in the sixteenth century. The city of Antwerp, in the Spanish Netherlands, lay at the heart of European commerce and its bankers financed most of Charles V's and Philip II's wars on credit. The use of "notes of exchange" became common as Antwerp banks became increasingly powerful and led to extensive speculation that helped to exaggerate price shifts. Although these trends lay the foundation for the development of capitalism in Spain and Europe as a whole, the total lack of regulation and pervasive corruption meant that small landowners often lost everything with a single stroke of misfortune. Estates in Spain grew progressively larger and the economy became increasingly uncompetitive, particularly during the reigns of Philip III and IV when repeated speculative crises shook Spain.

The church had always been important to the Spanish economy, and particularly in the reigns of Philip III and IV, who had bouts of incredible piety and church philanthropy, large areas of the country were donated to the church. The later Habsburgs did nothing to promote the better distribution of land, and by the end of Charles II's reign, most of Castile was in the hands of a select few landowners, the largest of which by far was the Church.

10 The last Habsburg (1643-1700)

200px Turenne at the Battle of the Dunes (1658)

Supported by the French, the Catalonians, Neapolitans, and Portuguese rose up in revolt against the Spanish in the 1640s. With the Spanish Netherlands effectively lost after the Battle of Lens in 1648, the Spanish made peace with the Dutch and recognized the independent United Provinces in the Peace of Westphalia that ended both the Eighty Years' War and the Thirty Years’ War.

War with France continued for eleven more years. Although France suffered from a civil war from 1648- 1652 (see Wars of the Fronde) the Spanish economy was so exhausted that they were unable to effectively cope. Naples was retaken in 1648 and Catalonia in 1652, but the war came effectively to an end at the Battle of the Dunes (1658) where the French army under Vicomte de Turenne defeated the remnants of the Spanish army of the Netherlands. Spain agreed to the Peace of the Pyrenees in 1659 that ceded to France Roussillon, Foix, Artois, and much of Lorraine.

250px John IV of Braganza (r. 1640-1657) being proclaimed King of Portugal

Portugal had rebelled in 1640 under the leadership of John IV of Portugal, a Braganza pretender to the throne. He had received widespread support from the Portuguese people, and the Spanish – who had to deal with rebellions elsewhere, along with the war against France – were unable to respond, and the Spanish and Portuguese had existed in a de facto state of peace from 1644 to 1657. When John IV died in 1657, the Spanish attempted to wrest Portugal from his son Alfonso VI of Portugal, but were defeated at Ameixial (1663) and Monte Claros (1665), leading to Spain’s recognition of Portugal’s independence in 1668.

Philip IV, who had seen over the course of his life the devastation of Spain’s empire, sank slowly depression after he had to dismiss his favorite courtier, Olivares, in 1643, and further after his son Baltasar Carlos died in 1646 at the age of seventeen. Philip became increasingly mystical near the end of his life, and ultimately attempted to undo some of the damage he had done to his country, but died in 1665 before anything could be changed, hoping his son would somehow be more fortunate. His only surviving son was Charles, who was seriously deformed and mentally retarded and remained under the influence of his mother all his life. In living with his deformities under the expectations and ridicule of the family and court Charles led a miserable existence.

200px Charles II, the last Habsburg king of Spain (r. 1665-1700)

Charles and his regency were incompetent in dealing with the War of Devolution that Louis XIV of France prosecuted against the Spanish Netherlands in 1667- 1668, losing considerable prestige and territory including the cities of Lille and Charleroi. In the Nine Years' War Louis once again invaded the Spanish Netherlands. French forces led by the Duke of Luxembourg defeated the Spanish at Fleurus (1690), and subsequently defeated Dutch forces under William III fighting on Spain's side. The war ended with most of the Spanish Netherlands under French occupation, including the important cities of Ghent and Luxembourg. The war revealed to the world how vulnerable and backward the Spanish defenses and bureaucracy were, though the ineffective Spanish government took no action.

The final decades of the seventeenth century saw utter decay and stagnation in Spain; while the rest of Europe went through exciting changes in government and society - the Glorious Revolution in England and the reign of the “Sun-King” in France - Spain remained adrift. The Spanish bureaucracy that had built up around the charismatic, industrious and intelligent Charles I and Philip II demanded a strong monarch; the weakness of Philip III and IV led to Spain’s decay. As his final wishes, the childless king of Spain desired that the throne pass to the Bourbon prince Philip of Anjou rather than to a member of the family that had tormented him throughout his life. Charles II died in 1700, ending the line of Spanish Habsburgs exactly two centuries after Charles I was born.

Spain Spanish history

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