Editing Charles II of Spain (section)

==Economy==
The so-called "[[Little Ice Age]]" of the 17th century was a period of crisis throughout Europe, leading to poor harvests and economic decline.{{sfn|De Vries|2009|pp=151–194}} Spain was especially affected, due in part to the parlous economic situation, particularly in Castile, where the population dropped from 6.5 million in 1600 to fewer than 5 million in 1680, whilst figures for Spain as a whole were 8.5 to 6.6 million.<ref>{{cite web |title=Charles II |url=https://www.britannica.com/place/Spain/Charles-II#ref70418 |website=Britannica.com |access-date=14 October 2021}}</ref> This was exacerbated by a series of wars with France and the need to defend the Empire, which were a constant drain on public expenditure. In 1663, Philip IV had converted state debt into [[government bonds]], or ''juros'', but high rates of interest meant taxes were often assigned to creditors years in advance to pay current liabilities. Although silver bullion imports from the Americas increased, the vast majority went to paying off foreign debtors.{{Sfn|Kamen|2002|pp=431-432}}

The globalisation of the Spanish trading system meant outsiders often had the most to lose from its collapse. By the 1670s, the bulk of foreign trade was controlled by Dutch and English merchants, while the domestic economy relied on French labour and imported wheat. The Marqués de Varinas, a senior colonial official, observed in 1687 that the Empire continued to exist in its present form "only because it enables the English, Dutch and French to exploit [it] more cheaply".{{Sfn|Kamen|2002|p=434}} 

In the 1680s, Spanish officials issued a series of drastic deflationary decrees, revaluing the coinage at 25% of its previous value.{{Sfn|Darby|2014|p=74}} The immediate impact was the total disruption of commerce and collapse of financial credit; in response, debtors were given three months to repay government debts using the existing rate, later extended to six months. Having stabilised the position, in 1686 the coinage was readjusted to a more favourable rate and thereafter left unaltered.{{Sfn|Kamen|1964|p=63}}