Sixteenth-century Spain, the most powerful state of its time, was comprised of two kingdoms: Castile and Aragon. Following the death of the Portuguese king who was left without a male heir, Philip II of Spain had claimed the Portuguese throne by virtue of being the only son of Isabella, daughter of King Manuel I of Portugal. In 1469, Isabella of Castile had married Ferdinand, heir to the throne of Aragon. Ferdinand and Isabella and their successors were known as the Catholic kings because of their devotion to the Church. But like other monarchs, they brought the Church, its privileges, and some of its incomes from tithes and the sale of indulgences under royal control. While the Reformation shook the foundations of the Church in much of Europe, it barely challenged Spanish religious orthodoxy. The Spanish Inquisition, whose original purpose had been to enforce the conversion of Moors and Jews in the late fifteenth century, served the Catholic Reformation in the late sixteenth century and became a respected agent of royal authority in some parts of Spain. Elsewhere, above all in Sicily and the Netherlands, local people considered the Inquisition another aspect of Spanish domination and resisted it.

Disagreements between the monarchy and the Castilian Cortes were frequent during the middle decades of the sixteenth century. The Cortes excluded nobles and had representatives from only the governments of the twenty most important cities and towns of Castile. The Castilian Cortes, which maintained the right to approve exceptional taxes, continued to refuse to pay special taxes to subsidize the monarchy for thirty-five years (1541-1576). "Despite the crown's efforts, this battle between monarchy and Cortes, over taxes led to an inefficient royal fiscal apparatus." However, it was through marriage and inheritance, Spain's influence and domination reached far and wide. The Spanish throne was passed to the Hapsburg dynasty in 1496, when Princess Joanna (daughter of Ferdinand and Isabella) married Philip the Fair, who was the son of Maximilian, the Holy Roman Emperor. In 1516, Joanna and Philip's son, Charles I inherited the Spanish throne. In 1519, he became the Holy Roman Emperor Charles V when his grandfather, Maximilian, died.

Spain's colonial empire in the Americas contributed to its expanding economy. Although income taken from the colonies never accounted for more than about 10 percent of the crown's income, it was during the first few years of the Spanish colonial period that Mexican gold helped finance the next wave of conquests. In 1545, Spaniards discovered silver mines in Peru, and a year later they uncovered more gold deposits in Mexico. With these new riches, the Spanish empire was able to contribute a lot to the sixteenth-century European trading boom. Spain shipped colonial products and Spanish wool to France and the Italian states. Spanish ships supplied the colonies with wine, oil, grain, shoes, and clothing. The Castilian economy developed rapidly. "Agricultural production was closely linked to manufacturing, as were sheep to the production of woolen goods." However, 85 percent of Spain could not be agriculturally developed because it consisted of either mountains or lay on rocky slopes. "The crown imposed protectionist measures against foreign goods, banned export of gold and silver, and attracted Italian and Flemish Craftsmen to Spain." Spanish royal revenue came from peasant obligations owed on royal domains as well as taxes on commerce, and importing and exporting taxes, tariffs on sheep owned by nobles, and from the Church as payment for collecting tithes (a tax of 10 percent revenue).

When Charles V raised taxes to extraordinary amounts in order to defend the Spanish Italian territories of Naples and Sicily with the war against France, there was the revolt of the Communeros. The revolts began in Toledo and spread to other towns of northern Castile. Charles believed that suspending further supplementary tax collections would cease additional revolts. But when uprisings continued, Charles' army restored order. As a warning to those who would challenge royal authority, one of the leaders of the revolt was hung from a tower.

In 1554, Charles V arranged the marriage of his son, Philip, to the English princess Mary Tudor. Charles stepped down as Holy Roman Emperor in 1558, dividing the Hapsburg domains between his sons Philip and Ferdinand. Philip II inherited Spain, the Netherlands, the Spanish colonies in America, and parts of Italy. Ferdinand was elected Holy Roman Emperor and inherited the Hapsburg ancestral domains. When Mary Tudor died in 1558, it eliminated any possibility of England becoming part of the Spanish Empire.

In 1600, the word "decline" was first used to describe the overstretched Spanish Empire. Castilians themselves still regarded Spain as a haven of peace and prosperity compared to the rest of Europe, which had been torn apart by religious wars. The decline of Spanish power began in the Netherlands, when the Dutch revolted over higher taxes imposed by the Spanish crown. To make matters worse, many of the Dutch Calvinists were angered by the Spanish king's attempt to promote Catholic Reformation by imposing the Inquisition. In 1567, Philip II appointed duke of Alba to restore order in the north with 10,000 Spanish troops. The ruthless Castilian executed Calvinist nobles on the central square of Brussels, established military courts, and almost destroyed self-government in the Netherlands. But Alba's reign of terror also helped transform the resistance into a national revolt, led by William of Orange. Alba believed that "Everyone must be made to live in constant fear of the roof breaking down over his head, I am resolved not to leave a creature alive, but to put them all to the sword."

Alba executed thousands of innocent people from 1567 to 1573, which led to a Catholic Bishop claiming Alba had hurt the Church more than Luther and Calvin combined. In 1572, unrestrained rebellion had swept the Netherlands, and while Spanish troops dominated the land, the Dutch controlled the sea. However, Alba's successor won many victories in the Southern Netherlands. There, Catholic nobles began to think twice about continuing a struggle that was started by Dutch Protestants. In 1579, the Southern Dutch provinces formed the Union of Utrecht, and two years later declared their independence from Spain as the Dutch United Provinces. For the time being, Spain could supply its armies because Alba's armies had recaptured some of the Southern Netherlands, while Philip kept his peace with England. However as the Dutch revolt kept on, , the problems of fighting a war a thousand miles away upset Philip. Spanish routes for troops and supplies to the Netherlands had to be maintained through diplomacy. The Spanish military forged the "Spanish Road" as a military corridor. Regardless of the Spanish Road, by 1577, the Spanish army in the Netherlands had shrunk in size from 60,000 to 8,000 men.

Throughout the war, the Dutch fleet kept the Spanish ships in port, while the English navy allied with the Dutch in 1586, controlled the channel. When the Spanish fleet sailed north in 1588, the outcome was the defeat of the Armada. A truce between Spain and the Dutch, signed in 1609, ended in 1621. The "war party" led by Maurice of Nassau, who was the son of William of Orange, was stronger, appealing for Calvinist orthodoxy and a crusade against Catholicism. Spain's economy was damaged by the ongoing war that would also set free the Southern Netherlands from its rule.

Although economic decline triggered Spain's fall from a position of European domination, it remained an important state. While its population had risen to 8.5 million people between 1541 and 1591 and fell by almost a quarter to 6.5 million by the middle of the seventeenth century, plague, smallpox, and harvest failure took their toll. "During the period 1568-1598, Spain had five times the military expenditures of the Dutch, English, and French combined, at least partially because it had to reconstitute the Armada." One of the results of so many expensive wars was that Spain had lost its boundary of safety when it experienced a number of epidemics and harvest failures, starting in 1576 and following through most of the final quarter of the century. Spain attempted to find new sources of income when the state was forced to take out large loans from foreign bankers at high rates.

Taxes were raised, as new ones were imposed all over the state in order to replenish the treasury. This weakened the economy by encouraging the middle class to abandon business in favor of gaining permanent privileges, and therefore tax exempt, as they would obtain noble status. In 1609, the monarchy expelled about 300,000 Moriscos from Valencia and Aragon. The region of Valencia lost about one-third of its population, including many skilled craftsmen and farmers, which proved to be quite unhelpful. Spain's increasing economic problems were worsened by the fact that the empire's interests, some of whom were defended in costly wars, were spread so widely, and not only in Europe, but also overseas. The insurrection throughout the Netherlands during Spain's "Golden Age" was most definitely the main catalyst in the empire's decline.

Bibliography

1. Roberts, J.M. A History of Europe (the Penguin Group, 1996)

2. Fuentes, Carlos The Buried Mirror: Reflections on Spain and the New World (Houghton Mifflin Company, 1992)

3. Blacker, Irving R. PRESCOTT'S HISTORIES: The Rise and Decline of the Spanish Empire (The Viking Press, Inc., 1963)

4. Livermore, Harold A History of Spain (Grove Press, Inc., 1960)

5. McKay, John P. A History of Western Society (Houghton Mifflin Company, 1999)