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Spanish Empire: The Rise and Fall of a Great Power

Learn about the history of the rise, peak, and decline of the Spanish Empire. Reasons for this empire's decline are discussed.

Learn about the history of the rise, peak, and decline of the Spanish Empire. Reasons for this empire's decline are discussed.

The Rise of Spain

The rise of a newly united Spain to become the strongest state in Europe during the 16th and early 17th centuries is one of the surprise stories of world history. As late as the 1460s, Spain was still disunited, the Crown of Castile and Aragon were separate entities ruled by different monarchs. Even worse than this, Castile was in turmoil as King Henry and his half-siblings Alfonso and Isabella fought over the crown. Yet within a decade, the troubles were gone — thanks to the marriage of Isabella of Castile and Ferdinand of Aragon the two crowns were on their way to be united by their monarchs.

In the following decades, Castile finished the Reconquista by subduing Granada, and the joint forces of Castille and Aragon conquered the Kingdom of Naples in the late 15th and early 16th centuries.

To the already substantial holdings of the two crowns were added the Habsburg domains when Charles V succeeded his grandfather, Ferdinand of Aragon, as the ruler of the many kingdoms the Catholic Monarchs united.

During the reign of Charles, the Duchy of Milan was added to the domains of the Habsburgs in Europe, while in America Cortez and Pizzaro conquered the Aztec and Inca Empires.

Left: Isabella I of Castile / Right: Ferdinand II of Aragon

Left: Isabella I of Castile / Right: Ferdinand II of Aragon

Peak and Fall of an Empire

Thanks to his numerous kingdoms, duchies and other fiefdoms, Charles had many enemies and spent most of his reign fighting against the king of France, Protestant German rebels, the Ottoman Empire and Barbary pirates.

He succeeded in keeping together his empire, but when he abdicated he divided it between his son Philip II and his brother Ferdinand. Philip received the Spanish kingdoms and consequently, the American colonies, the Italian holdings and the 17 Dutch Provinces, these territories went on to form the Spanish Empire from the mid 16th century.

Philip added to his already substantial empire the Kingdom of Portugal and its colonies in 1580, however, thanks to his unpopular taxes and religious policy he lost 7 Dutch provinces, which went on to form the Dutch Republic.

From the reign of Philip II until the reign of his grandson Philip IV, Habsburg Spain was the strongest state in Europe, yet despite its great resources and strength, it failed to subdue her numerous enemies( France, the Dutch, the English or the Ottoman Empire).

By 1659 Spain was surpassed by France and when the Habsburg house died out in 1701 after 13 years of bloody war Spain ended up being ruled by the French Bourbons.

Though it would not be correct to classify Spain as a French satellite, however, the country never recovered to become the foremost power of Europe in the 18th century and amidst the chaos that Napoleon’s invasion of the country unleashed in 1808, Spain lost her huge South American Colonial Empire too and definitively exited from the ranks of the Great Powers.

The defeat at the Battle of Rocroi is viewed by historians as the symbolic end of the Spanish dominance in Europe

The defeat at the Battle of Rocroi is viewed by historians as the symbolic end of the Spanish dominance in Europe

Reasons for Spain's Rise and Decline

With the chronology of the events cleared, one might ask the question why? What were the reasons that allowed the Spanish Empire to become the strongest state in Europe for more than a century? And what were the reasons that caused its decline and later fall?

Spanish Army

Europe in the Late Medieval and Early Modern period was still very much a place where political disputes were still settled by the force of arms, so any king with ambitions to build an empire needed a strong military and that is exactly what Castile and Aragon had. The Spanish tercios were regarded as the greatest infantry on the continent for over a century and played a crucial role in maintaining Habsburg power.

Castile had a strong military tradition thanks to the numerous wars the country fought with its neighbours and civil wars.

As European armies were quickly changing in the late medieval period the knights and their feudal levies were changed for a more professional fighting force. Copied from the Swiss who trounced Charles the Bold in the 1470s pikemen became very popular. The newly invented firearms also became more and more common in the militaries of Europe.

Just as the landscape of warfare was rapidly changing the Spanish kingdoms had the luck of having one of the best and most innovative generals of their age, Gonzalo Fernandez de Cordoba, known simply as "The Great Captain." He was one of the first men to combine infantrymen wielding pikes, swords and firearms, from which formation the famous tercios developed and went on to dominate the European battlefields.

The army played a crucial role in the conquest of Naples and Milan. The superb military of the Habsburgs also allowed them to keep the aggressive French at bay during the reign of Francis I and his son Henry II.

Spain's Resources

Having an excellent army was not the only thing that allowed the Catholic Monarchs and their Habsburg successors to maintain their power. Because Europe was going through a military revolution during the 16th and 17th centuries the cost of maintaining armies skyrocketed and only those with large purses were able to keep up.

Luckily for the Spanish monarchs, they had large purses, most probably the largest on the continent. Thanks to conquest and marriage, Charles V and his successors ruled over some of the richest lands of Europe in Italy and the Low Countries, he had access to financiers like the Fuggers or Genoese bankers and thanks to the conquests of the conquistadors the Spanish Habsburgs were the owners of the rich mines of the Americas, these mines during the years of their peak output gave the Crown 1/4 of its total budget.

Changing Economic Landscape of Europe

Yet despite having a superb army and huge resources, the Spanish Habsburg Empire was eventually eclipsed by France in the middle of the 17th century and never recovered her previous strength from this point on.

There were many reasons for this decline of course like economical decline, the disorganised nature of the empire or the endless wars the Habsburgs fought, just to give a few.

First of all to call the Empire of the Spanish Habsburgs was never a centralised state. This meant that the different kingdoms they ruled over were separate entities, which happened to be ruled by the same man. This in turn meant that the burden of the empire was not always shared fairly by the different states that made up the empire.

For most of this period(1516-1659), Castile was the country that was hit by the worst taxes, while the rest, especially the Kingdom of Aragon, contributed less to the budget of the empire. As a result of the heavy taxes Castile declined during this period and by the middle of the 17th century, it was quite badly impoverished and slightly depopulated.

Most of the industries of Castile regressed during this period( shipping, clothing, armament) and Castile subsequently was unable to supply enough manufacture to the American colonies, this inability gave the chance for foreign merchants to penetrate the Spanish trade with the colonies.

The position of the Spanish Habsburgs was also eroded by a general shift of the epicentre of European commerce from the Mediterranean to the Atlantic.

If the heavy taxes and declining industries were not bad enough on their own, Spain and Europe were hit by inflation thanks to the stupendous amount of silver the mines of Peru and Mexico were pouring into Europe.

The price of foodstuffs escalated to the point of the monarchs being forced to maximise prices. As the population was already impoverished thanks to the inflation and heavy taxes plague hit the Old Continent in the 1590s and wiped out a good portion of Europe’s population.

Overextension Through the Endless Wars

Of course the heavy taxes the Habsburg were forced to collect did not come out of the blue, they had a reason, to pay their armies. The standing armies of Europe grew exponentially during the 16th century and the states struggled to maintain them out of their own pockets, the Habsburgs were no exception from this rule.

By the 1540s Charles V was forced to commit several years of tax revenue as collateral to get his loans to pay his armies. When he abdicated he left his son a debt of 20 million ducats, a sum that was several times larger than his yearly revenue, by the time Philip II died this sum had risen to 100 million ducats, more than 5 times his yearly income.

Thanks to the huge loans the Spanish Crown ended up paying a huge part of his yearly revenues just to repay interests, and thanks to their numerous bankruptcies lenders often gave them money with extortionate interest rates.

The struggles of the Spanish crown to keep solvent were not uncommon in early modern Europe, however, unlike their rivals whose military conflicts were often interrupted by decades of peace, Spain was more or less constantly involved in at least one conflict, and more often than not in multiple conflicts.

The endless conflicts sucked the Spanish crown dry of money, ironically as the conflict was often in foreign regions such as Flanders the huge quantity of silver, the payment of the famous Army of Flanders was directly pumped into their enemies economy, as the Spanish Netherlands were reliant for goods on the Dutch Republic.

Decline of the Spanish Military

The financial struggles of the crown had their effect on the armed forces also. Throughout most of the 16th century, the Spanish army was, for the age, a surprisingly meritocratic army, this started to change in the late 1500s and the process continued in the 1600s.

As a result of this process, the veteran soldiers who led the army of the Duke of Alba were changed by relatively inexperienced men by the time of the Cardinal-Infante. At the Spanish defeat at the Battle of Rocroi, most of the Spanish officers were inexperienced nobles and the lack of leadership cost the Army of Flanders dearly.

End of the Spanish Empire

As a result of the endless wars, financial struggles and slight decline of the military the Spanish Empire was eclipsed by the France of Louis XIV by the middle of the 17th century, the 1659 Treaty of the Pyrenees is seen as the symbolic moment.

When the Spanish Habsburg House died out in 1701 the War of the Spanish Succession erupted. In the end, the French Bourbons ended up as the rulers of Spain, however, at the cost of conceding the Spanish Netherlands and the Italian provinces.

The Bourbons tried to reform their new kingdom and up to a certain extent, they succeeded in their reforms. The Spanish navy was expanded and commerce with the colonies was liberalised when the monopoly of Cadiz was ended during the reign of Charles III.

Unfortunately, their heavy favouritism of peninsulares (Spanish born in Spain) over local Spaniards won them the disapproval of the colonials. Despite the best efforts of Charles III, Spain was still not a match for France in a direct conflict, a fact that became painfully obvious when Napoleon decided to take over the country.

Napoleon named his brother Joseph as the king of Spain in 1808, however, his ascension was not accepted in the colonies. At first, the colonials upheld the rights of Ferdinand, but soon colonials favouring full independence took the initiative and chose to secede from Spain, the Spanish Crown tried to retake the colonies by force, however, they ultimately failed and during the 1810s and 1820s the large colonial empire of Spain was lost.


Kamen, Henry. (2005). Spain, 1469-1714: A Society of Conflict. Routledge.

Kennedy, Paul. (1989). The Rise and Fall of the Great Powers. Vintage Books.

De Leon, Fernando Gonzalez. (2009). The Road to Rocroi. Brill.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2022 Andrew Szekler