Why did Spain’s economic development slow down in the 16th century?

Spain in the 16th century was one of the dominant countries of Western Europe. Spanish society developed steadily, and the financial reserve was constantly fueled by the colonies, since Spain was one of the first leading states during the Great Geographical Discoveries. At the same time, a number of internal and external reasons “threw” Spain on the sidelines of the Western European history of the New Time.

Internal factor
Among a number of reasons for a really deep crisis in Spain – a state that at first glance is successfully developing, several factors should be highlighted:
Spain was ruined by its own colonies: the irregular and unstable flow of gold and precious metals from the colonies to the Spanish metropolis practically devalued any monetary principle of the state. Prices soon rose, production plummeted, and the population quickly became impoverished;
the economic crisis and the so-called “price revolution” devalued the Spanish goods themselves, foreign trade was profitable only with the colonies;
wasted and openly neglected by the Spanish economic problems Emperor Philip. He shared the crown of the Spanish house with the legacy of the Holy Roman Empire and did little about the internal crisis;
Philip’s indifference worried the Cortes – representatives of the estate body, who began an open policy against the king, which led to the decentralization of the state.

External factor
While Spain, rich in gold, began to vegetate in complete inability and unwillingness to manage cash flows, the political and economic position of a number of other countries has noticeably increased. The times of Geographical Discoveries were supported, for example, by Holland and England, Portugal continued to develop new lands and markets.

Attempts to regulate the economy began to emerge on the political arena of medieval Europe – the policy of “mercantilism” and “protectionism”. While Philip of Spain did not pay attention to the rapid fall of his state, the kings of France, England, and the leaders of the Netherlands introduced such a system of measures that supported their bankers, merchants, merchants, and seafarers.