Dynastic and governmental collapse in Spain coincided with the emergence of France as the dominant power in Europe. Louis XIV assumed full responsibility for the government of France when Mazarin died in 1661, and ruled for more than half a century with considerable skill and an infallible instinct for political theater. France became the political and cultural center of Europe with “the Sun King” as its visible symbol. More practically, Louis intended to secure his borders through the annexation of lands he regarded as historically French. These included the Spanish Netherlands which he claimed as the rightful inheritance of his queen. In 1667 he invaded the southern Low Countries, but was driven off by the Dutch with English and Swedish assistance. A second more successful war from 1672 to 1678 gave him parts of Luxemburg, Hainaut, and southern Flanders, together with Lorraine and the Franche-Comté. All except Lorraine had been part of the Burgundian inheritance of Charles V.
Spain may have lost the ability to defend its possessions in northern Europe, but it was not entirely helpless. The wars of Louis XIV enabled Spain and the Dutch Republic to formalize a relationship that had begun to develop even before the Treaty of Münster reopened the Spanish trade to Dutch ships. As the chief economic beneficiaries of the Spanish empire—and its chief creditors—the Dutch had a keen interest in its preservation. Dutch warships began to provide an escort for Spanish vessels in European waters. With the Treaty of the Hague (1673), the commercial alliance became a military pact. Spain’s remaining troops in the Army of Flanders found themselves under the command of the Dutch stadholder, William, Prince of Orange. William was the husband of Mary Stuart, daughter of James II of England and a Protestant. When the Glorious Revolution of 1688 deposed James, Parliament recognized Mary as queen of England and her consort as King William III. Louis XIV now faced one of the greatest crises of his reign. In the War of the Grand Alliance, also known as the War of the League of Augsburg or the Nine Years’ War (1688–1697), a Dutch, English, Austrian, and Spanish coalition fought the French to a standstill. The Treaty of Rijswick (1697) allowed Louis to retain his earlier conquests with the exception of Luxembourg, but a later agreement placed some of the most important fortresses in the Spanish Netherlands under Dutch control. To console Louis XIV, Spain had to cede the western portion of Hispaniola to the French, who developed it into the rich sugar colony of St. Domingue (modern Haiti).
The southern Netherlands remained at least nominally under Spanish rule for another 17 years, but it had changed greatly since the time of Philip II. The reduction in Spanish subsidies and the lack of direction from Madrid weakened the States-General and left provincial and municipal governments to fill the political void. Its cities, however, retained little of their former greatness. Heavy war taxation, the ongoing closure of the Scheldt, and Anglo-Dutch competition crippled their economies while leaving the countryside relatively prosperous even in the midst of almost constant warfare. The wars of Louis XIV, although bloody for combatants, were less harmful to civilians than those of the preceding age. Improved discipline and the logistical systems designed by Louis’s ministers of war (and copied to some extent by the armies of William III), reduced looting and other forms of direct contact between soldiers and the general population. Some rural districts actually prospered by selling supplies to the armies. Others benefited when the breakdown of trade restrictions forced cloth manufacturers to leave the cities in search of cheaper labor. The great days of Flemish cultural achievement had faded, but the society itself remained largely intact.
Spain’s new relationship with the northern powers helps to explain another great paradox of the age. Despite the appearance of governmental paralysis under Charles II, the Spanish empire did not collapse. In fact its economy and that of metropolitan Spain slowly began to revive. The ministers who served Charles in his last years, notably the count of Oropesa and the marquis of Los Velez, demonstrated a tough, quiet competence that had long been needed. By 1675 the premium of silver over vellón had reached 200 percent. In 1680 the government was forced to devalue even the vellón minted since 1660 by half, producing a nationwide flood of bankruptcies and riots in the major cities. Tax receipts from Castile dropped, but the crown’s ministers held firm. From 1677 to 1687 they also attacked the juros that consumed so large a proportion of the crown’s income. By annulling much of their value, reducing the interest rates, and taxing the remaining proceeds at 15 percent the government added to the prevailing misery, but by the end of the reign inflation was under control, the economy was growing, and the king was solvent for the first time in memory.
Silver shipments from Mexico and Peru continued at a high level, although the government’s share still amounted to only a small fraction of the total. There were even a few modest efforts at expansion overseas. Expeditions from Manila established the Marianas (formerly the Ladrones) as a Spanish colony between 1668 and 1685. In a demographic catastrophe that recalls the fate of the Canaries and West Indian islands two centuries earlier, the native Chamorros died or fled in great numbers, and by century’s end only Guam and Rota remained populated. The new colony served primarily as a place for the Manila Galleon to take on food and water, supporting itself through the cultivation of tobacco, sugar, and native crops. Another expedition claimed the Carolines in 1686. These islands were placed under the government of the Marianas in 1696, but no effort was made to settle them until late in the nineteenth century. In North America, the French expeditions undertaken by LaSalle between 1682 and 1687 inspired the Spanish authorities to authorize the first circumnavigation of the Gulf of Mexico followed by the establishment of Texas as a province in 1691. The Texas garrisons proved unsustainable, but the permanent settlement of Pensacola in 1698 gave Spain an important base with which to counter French ambitions on the Gulf Coast and Lower Mississippi valley. These developments proceeded from local initiative with only nominal support from the crown.
On a broader scale, Catalans and Basques began to take a larger role in Spanish economic life, and the informal deregulation of trade seems to have benefited even Castile. In the Americas, improved access to European markets strengthened the economy. It certainly increased the wealth and political influence of the landholding and merchant elites, a development that would have important consequences in the century to come. In short, the government’s inability to regulate commerce or even to protect parts of its empire without the help of foreigners may have profited its subjects even as it revealed Spain’s eclipse as a military power.
The death of Charles II on November 1, 1700 marked the end of the Habsburg dynasty in Spain and the beginning of a gradual but revolutionary transformation in imperial government. On his deathbed Charles staunchly resisted the influence of his Austrian queen and chose Duke Philip of Anjou, second son of the French dauphin and grandson of Louis XIV, to succeed him. The choice had been difficult and would lead to a world war of 12 years’ duration.
When the War of the Grand Alliance ended with the Peace of Rijswijk in 1697, there were three potential candidates for the Spanish throne: Philip of Anjou, Prince Joseph Ferdinand of Bavaria, and Archduke Charles of Austria, second son of the Holy Roman Emperor. Louis XIV naturally favored the candidacy of his grandson, while Charles II’s queen, Mariana of Neuberg and some members of the Spanish elite supported the Austrian claimant. The Dutch and English favored the Bavarian because the acquisition of Spain and its empire by either France or Austria would threaten the balance of power in Europe. Knowing that France was in no condition to fight another war, Louis XIV signed the First Partition Treaty (October, 1698), a compromise agreement with William III of England and his allies that would give Spain, the Spanish Netherlands, and Spain’s American colonies to Joseph Ferdinand. Archduke Charles would get Milan. The rest of Spain’s Italian possessions plus the Basque Country would go to the French dauphin.
Charles II, however, was determined to avoid the breakup of his monarchy and drew up a will giving the entire inheritance to Joseph Ferdinand. When the seven-year-old Joseph Ferdinand died in 1699, a second partition treaty between Louis and William gave his inheritance to the Archduke Charles. Still unwilling to countenance the breakup of his empire and fully supported by his Council of State, Charles II wrote a second will in the days before his death that named Philip of Anjou as his sole heir. Louis XIV now realized that war was inevitable. Even if he honored the second treaty of partition he would have to fight the emperor and his maritime allies for Spain’s Italian possessions. If he did not, he would still have to fight, but he might at least be able to place a Bourbon on the Spanish throne. With nothing to lose, he refused to exclude Philip from the French succession and in December, 1700, Philip of Anjou became Philip V of Spain.
When the 17-year-old king entered Madrid for the first time in April, 1701 he discovered, apparently to his surprise, that he commanded only a vestigial fleet and an army that was in the last stages of decay. Its 10,000 infantry and 5000 cavalry had obsolete equipment or none at all. The kingdom’s fortresses were in disrepair, and the available military budget amounted to no more than about 3 million escudos. Spain was for all practical purposes defenseless. Alarmed, Louis XIV tried to support his grandson’s succession by garrisoning Spanish fortresses in the Netherlands with French troops and sending an army to protect Milan. These actions convinced the English, Dutch, and Austrians that Louis still harbored aggressive intentions. They renewed the Grand Alliance in September, 1701 and declared war against France and Spain in May, 1702. Portugal and Savoy joined the Alliance in 1703.
When the War of the Spanish Succession ended in 1713, Spain and its American colonies remained intact, but the European empire assembled by Charles V no longer existed. The 1688–1697 war had provoked an economic crisis in France, and by 1705 it was apparent that France could no longer confront the allies on equal terms nor could it fully protect Spanish interests. The English navy now dominated the seas because Louis had allowed his fleet to deteriorate after the treaty of Rijswijk. France could still raise formidable armies, but they were rarely a match for the allied forces in the north under the Duke of Marlborough or for the Austrians in Italy under Prince Eugene of Savoy. In Spain, the Archduke Charles captured Barcelona and Valencia with the help of the English fleet in 1705, and in 1706 the Portuguese army, to its own amazement, captured Madrid. Spain itself might have been lost had not a Franco-Spanish army under the Duke of Berwick defeated the English and Portuguese in the battle of Almansa on 25 April, 1707. Berwick, one of Louis XIV’s greatest commanders, was the illegitimate son of the exiled King James II of England. His victory paved the way for the re-conquest of Aragon and Valencia. Outside the peninsula, however, Spain’s position continued to deteriorate. Eugene of Savoy, who had grown up at the court of Louis XIV, forced the French out of northern Italy, and in July, 1707 an Austrian army occupied Naples. One year later, Marlborough having already defeated the French at Ramillies in 1706, defeated them again at Oudenarde, thereby securing most of the Spanish Netherlands for the allies. After the failure of peace talks in 1709, Marlborough completed his conquest of the Netherlands.
The treaties that ended the war, Utrecht (April 11, 1713) and Rastatt (September 7, 1714), reflected conditions on the ground with only a few modifications. Philip V retained Spain, including Catalonia which had been under Austrian control since 1705, and the Indies. The British (as they may now be called after the union of England and Scotland in 1707) retained Gibraltar and Minorca which they had captured during the war. Gibraltar’s importance was, and is, largely symbolic, although its survival as a British colony on Spanish soil is still deeply resented today. Minorca became an important base for the British navy which could now hope to control the Western Mediterranean by monitoring the French fleet based at Toulon. The Archduke Charles, who had been elected Emperor Charles VI in 1711, gained the most without actually signing the treaties. The allies gave him Naples, Sardinia, Milan, and the Tuscan forts, all of which enabled him to dominate the remaining states of northern Italy as Spain had done since the 1550s. The Spanish Netherlands was gradually transferred to Austrian rule as well after 200 years of Spanish rule, while Sicily went to Victor Amadeus II of Savoy.
Spain preserved its American empire primarily because France and the maritime powers knew that Philip’s cause was popular in America and had little stomach for waging war on the other side of the Atlantic. They hoped in any case to maintain the existing arrangement by which they harvested the profits of the Indies trade without the expense and trouble of maintaining a colonial government. Philip had already granted the French the right to trade in the Caribbean as a condition of Louis XIV’s support. By the Treaty of Utrecht he ceded the slave trade to to Britain as well.