* Absolute monarchies

Absolute monarchs believed that God had given them their power and that they were representatives of God on Earth. They controlled all the powers of the state: they passed laws, governed and were the supreme judges. They had centralised administrations managed from the court. The best example of an absolute monarch was Louis XIV of France, known as the “Sun King”.

* Parliamentary systems

The power of the monarch or the most senior authority was limited by a parliament, which represented the interest of the three estates (clergy, nobility and commoners).

* England.

The decision of the kings of the Stuart dynasty to govern as absolute monarchs without the Parliament was very unpopular. The discontent, together with the revolts which broke out in Scotland over religious matters, led to a revolution in 1640. The confrontations turned into a civil war in 1642. This war ended with the fall of the Stuart dynasty; Charles I was executed and the monarchy was abolished. One of the leaders of the Parliament, Oliver Cromwell established a dictatorship.

After Cromwell´s death, the Parliament restored the monarchy. However, a second revolution, the Glorious Revolution, took place in 1688. This revolution ended with the abdication of James II and the coronation of a Dutch nobleman, William of Orange. He ruled as King William III and signed a Bill of Rights. This Bill obliged the king to obey laws approved by the Parliament, laying the foundations for the separation of powers.

* The United Provinces

These territories obtained independence from Spain in 1648 and became a republic formed by seven provinces, which had their own parliaments. Representatives from all the provinces met at the States General, where they took joint decisions.

Over the 17th century the Hispanic Monarchy declined, but it continued to be an important international power, as it maintained its numerous possessions in Europe and its vast colonial empire.

During this century, Felipe III, Felipe IV and Charles II displayed a weaker personality than their predecessors and delegated the tasks of government to validos or royal favourites, who were

individuals acting in the king´s name: the dukes of Lerma and Uceda during the reign of Felipe III; the Count-Duque of Olivares during the reign of Felipe IV, and Nithard and Valenzuela under Carlos II.

During this period, absolute monarchy was introduced, but no centralised administration was established, and each territory maintained its own form of organisation.

* Political crisis

Felipe III maintained Hispanic hegemony in Europe. Initially, Spain´s international policy was focused on peace-making with the United Provinces and England, as de Duke of Lerma believed that expensive wars could ruin the monarchy financially. However, in 1618 Spain decided to intervene in the Thirty Years´ War in support of the German emperor.

In the domestic sphere, Felipe III decreed the expulsion of the Moriscos in 1609, as they were thought to be insincere in their conversion to Christianity and were suspected of collaborating with the Turks. Around 300000 Moriscos left the country, and this was disastrous for many regions, as the Moriscos were a submissive and hardworking labour force.

Felipe IV faced serious problems.

The Count- Duke of Olivares attempted to restores Spanish military leadership in Europe and tried to reform the monarchy. He introduced finantial reforms to reduce expenses. He created the Union of Arms (Unión de Armas) to make all the kingdoms (and not just Castile) share the military expense of a permanent army, but in 1640 rebellions against it broke out in Catalonia and Portugal. Catalonia started a revolt, that was crushed in 1652. Portugal rebelled too, and with the support of other European powers, became independent in 1668.

* Demographic crisis

The Spanish population fell from 8 to 6 million inhabitants. This was due to the ongoing wars, the poor harvests, epidemics, the high emigration to America and the expulsion of the Moriscos.

* Economic crisis

Spain went through a serious economic recession in the 17th century.

* Agricultural and livestock production decreased, due to the severe climate conditions, the demographic crisis and the expulsion of the Moriscos.

* Craft activities decreased too. The wealth acquired from America during the previous century was not used to promote industry, but to buy good quality foreign products.

* Trade with America decreased as a result of pirate attacks and the widespread contraband and illegal trade of the Spanish colonies with the English and the Dutch. Spain lost its foreign markets due to its lack of technical expertise.

The domestic market shrank due to the demographic decline, and the guilds suffered a profound crisis.

Consequently, the revenues of the Royal Treasury fell, and the Spanish monarchs continued to borrow money to pay for their growing expenses. When they were unable to pay their debts, they declared bankruptcy.