DescriptionDue the enormous budget deficit in Habsburg Spain sovereign default is declared by Philip II of Spain, who also will declare state bankruptcies in 1560, 1569, 1575 and 1596
RateVery important (8)
SphereEconomics & Agrocaltures
Charles V had left Philip with a debt of about 36 million ducats and an annual deficit of 1 million ducats. This debt caused Phillip II to default on loans in 1557, 1560, 1575, and 1596. This happened because the lenders had no power over the king and could not force him to repay his loans. These defaults were just the beginning of Spain's economic troubles as Spain's kings would default six more times in the next 65 years. Aside from reducing state revenues for overseas expeditions, the domestic policies of Philip II further burdened Spain, and would, in the following century, contribute to its decline, as maintained by some historians.