After the death in 1700 of Spain's last Habsburg king, Charles II, the resulting War of the Spanish Succession led to the ascension of Philip V of the Bourbon dynasty, which began a new centralising state formation, which came into being de jure after the Nueva Planta decrees that merged the multiple crowns of its former realms (except for Navarre).

As undisputed ruler in most of the Peninsula, Ferdinand adopted a more aggressive policy than he had as Isabella's husband, going on to crystallize his long-running designs over Navarre into a full-blown invasion led initially by a Castilian military expedition, and supported later by Aragonese troops (1512).

His mother Joanna remained titular queen of Castile until her death in 1555, but due to her mental health and worries of her being proposed as an alternative monarch by opposition (as happened in the Revolt of the Comuneros), Charles kept her imprisoned.

Following the pattern established in Spain during the Reconquista and in the Caribbean, the first European settlements in the Americas, conquerors divided up the indigenous population in private holdings encomiendas and exploited their labor.

Pope Clement VII switched sides and now joined forces with France and prominent Italian states against the Habsburg Emperor, in the War of the League of Cognac.

In 1527, due to Charles' inability to pay them sufficiently, his armies in Northern Italy mutinied and sacked Rome itself for loot, forcing Clement, and succeeding popes, to be considerably more prudent in their dealings with secular authorities.

In 1533, Clement's refusal to annul Henry VIII of England's marriage to Catherine of Aragon (Charles' aunt) was a direct consequence of his unwillingness to offend the Emperor and perhaps have his capital sacked a second time.

Under the protection of the Schmalkaldic League, the Protestant states committed a number of outrages in the eyes of the Catholic Church (the confiscation of some ecclesiastical territories, among other things) and defied the authority of the Emperor.

In 1543, Francis I, King of France, announced his unprecedented alliance with the Ottoman sultan, Suleiman the Magnificent, by occupying the Spanish-controlled city of Nice in cooperation with Turkish forces.

The victory curbed the Ottoman naval threat against European territory, particularly in the western Mediterranean, and the loss of experienced sailors was to be a major handicap in facing Christian fleets.

In 1574, the Spanish army under Luis de Requeséns was repulsed from the Siege of Leiden after the Dutch destroyed the dykes that held back the North Sea from the low-lying provinces.

[9] In the western Mediterranean, Philip pursued a defensive policy with the construction of a series of military forts (presidios) and peace agreements with some of the Muslim rulers of North Africa.

Both Drake and Hawkins died of disease during the disastrous 1595–96 expedition against Puerto Rico (Battle of San Juan), Panama, and other targets in the Spanish Main, a severe setback in which the English suffered heavy losses in men and ships.

The combined Spanish-Mexican-Filipino forces also built a Christian walled city over the burnt ruins of Muslim Maynila and made it as the new capital of the Spanish East Indies and renamed it Manila.

Seri Lela's daughter, the Bruneian princess, left with the Spanish and went on to marry a Christian Tagalog, named Agustín de Legazpi of Tondo, and had children in the Philippines.

The Spanish expeditions into the Philippines were also part of a larger Ibero-Islamic world conflict[35] that included a rivalry with the Ottoman Caliphate, which had a center of operations at its nearby vassal, the Sultanate of Aceh.

They clung to the idea of placing the Infanta Isabella on the English throne after Queen Elizabeth I's death and sent a limited expeditionary force to Ireland to aid the Spanish-supplied rebels.

The English defeated it, but the long war of attrition there had drained England of money, men, and morale: Elizabeth's successor, James I, wanted a fresh start to his reign.

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 instead on its colonies (via the Spanish treasure fleet).

The Dutch, who during the Twelve Years' Truce had made their navy a priority, proceeded to plunder Spanish and (especially) Portuguese maritime trade, on which Spain was wholly dependent after the economic collapse.

In 1559, three years after Philip came to power, students in Spain were forbidden to travel abroad, the leaders of the Inquisition were placed in charge of censorship, and books could no longer be imported.

Philip vigorously tried to excise Protestantism from Spain, holding innumerable campaigns to eliminate Lutheran and Calvinist literature from the country, hoping to avoid the chaos taking place in France.

A council set up to investigate the matter in Castile found little effect, but in parts of Aragon and especially the Kingdom of Valencia, where half the Moriscos had lived, and had made up a substantial minority of the population, the impact was certainly noticeable for the noblemen who had lost rents.

Few Spaniards initially gave a thought to the wholesale slaughter, enslavement, and forced conversion of Native Americans either, although some men such as Bartolomé de las Casas argued for more humane treatment of them.

Not all shipping of the dispersed empire could be protected by large convoys, allowing the Dutch, English and French privateers and pirates the opportunity to attack trade along the American and Spanish coastlines and raid isolated settlements.

More seriously, the Portuguese part of the empire, with its chronically undermanned African and Asian forts, proved nearly impossible to defend adequately, and with Spain so fully engaged on so many fronts, it could spare little for their defense.

The Habsburgs, whose family had traditionally ruled over diverse, non-contiguous domains and had been forced to devolve autonomy to local administrators, replicated and continued those feudal policies in Spain, with the Basques, the Crown of Aragon and each of its constituent kingdoms retaining their Fuero rights.

Southern cities like Cádiz and Seville expanded rapidly from the commerce and shipbuilding spurred on by the demands of the American colonies and enjoyed a monopoly on trade with Spanish America.

The higher inflation, the burden of the Habsburgs' wars and the many customs duties dividing the country and restricting trade with the Americas, stifled the growth of industry that may have provided an alternative source of income in the towns.

Although these trends laid 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.