The Impact of the Main Challenges Facing Spain to 1598

Religious Challenges

During the 16th century, the Spanish Monarchy faced serious religious challenges from two key sources - the Protestant Reformation and the Moors.
Martin Luther’s Protestant Reformation reached Spain in the 1530s, leading to an increase in Protestant thought and thereby threatening the Catholic monarchy’s control over religious institutions.
As well as dealing with Protestantism, Spain - ruled by devout Catholic Monarchs - also had significant struggles with the Moorish population in Granada, following the completion of Reconquista in 1492. Religious tensions here also frequently flared into outright rebellion.

Political Challenges

Internally, the Spanish monarchy faced significant challenges from nobles who resisted attempts to centralise power.
The monarchy’s involvement in overseas wars and territorial claims, especially against France and in the Low Countries, put a huge strain on its finances and administrative resources. This led to increased tensions with both lower classes and the nobility over the increase and collection of taxes.
The comuneros revolt in Castilla during 1520-1521 was an early sign of the resistance that the monarchy’s centralisation efforts would face.

Economic Challenges

The influx of gold and silver from Spanish territories in the New World led to a price revolution and rampant inflation, which hurt the livelihoods of the ordinary people and created economic instability.
Substantial portions of the New World wealth were siphoned off to fund the Habsburgs’ costly foreign wars, thus failing to strengthen the home economy.
Continued dependency on overseas wealth and the failure to develop a self-sustaining domestic economy increasingly limited the monarchy’s financial standing towards the end of the 16th century.

Social Challenges

The profligate spending of the Spanish monarchy led to a decline in the standard of living for the average Spaniard, sparking social discontent.
The growing divide between the rich and the poor, coupled with the declining opportunities for social mobility, fostered resentment and unrest.
The expulsion of the Jews in 1492 and the subsequent expulsion of the Moriscos (converted Moors) in 1609 disrupted Spanish social fabric and led to the loss of significant portions of Spain’s skilled labour force.