The Decline of Spain took place roughly from 1595 to 1665. It was a mess of political strife, economic disaster and financial catastrophe. Disaster and civil war came a hair’s breadth to starting.
Foremost, there was trouble coming from the north. France’s Prime Minister, Cardinal Richelieu, was trying to cause Spain all the trouble he could. An old enmity resided between these two countries. The Hapsburg family was in Spain, and France hated the Hapsburgs.
Meanwhile, Spain’s source of revenue was slowing to a halt. Gold from the New World was becoming scarce.
Plague raged through the cities throwing many people into panic.
Wars going on with Spain against the Netherlands and against France caused huge holes in the pockets of the people and the government. Financially, many people were very badly off.
Philip III (r.1598-1621) was a weak king. He was also extravagant. He felt unfit to rule the kingdom, so he handed the power, unofficially, to the Duke of Lerma. The first move the Duke made was to expel the Moriscos out of Spain. The Moriscos were Muslims who had converted to Christianity. They were the main mercantilists in Spain. Thus, when the Duke expelled them and gave them three days to get out of the country, economic status was thrown into disarray.
Philip IV (r.1621-1665) was also an extravagant ruler. Like his predecessor, he handed power to a noble. This second noble was the Count of Olivares.
At this point the government was controlling pretty much everything. Trade, money, etc. were all controlled to a point of frustration. The people got so tired of it that they rebelled.
The Catalonian Rebellion was composed of both nobles and commoners. The Rebellion screeched to a halt after the nobles backed out, but not without some victory. The Count of Olivares was forced to step down from his office.
Other rebellions started forming. The Portuguese wanted to be rid of Spanish rule. The city of Naples was fed up with Spanish monarchs. Other states and countries started preparing for war. Spain resembled a giant cauldron about to break into a boil.
To resist and halt these rebellions, Spain had to recoil. The monarch decided that all these rebellions were not worth the wars, etc. He forgot his world ambitions and settled down to a more peaceful lifestyle.