• Economic expansion in Europe, which began in the late 15th century, slowed down and ended in various regions between 1600 and 1620.
• During the 16th century, economic activities and trade shifted from Italian city-states to Iberian states (Spain and Portugal) and further north to Holland and England.
• The 17th century marked an overall contraction of the European economy after a century of agricultural expansion, supporting trade and industry.
• This decline in commercial and industrial sectors was due to the lack of agricultural support.
• Europe experienced uprisings, conflicts, wars, and political disorder during this period.
• The 17th century is often described as a period of crisis by many scholars, with the decline of Mediterranean states emphasized.
• Growth in the European economy during the 16th century was halted by the end of the century, first in the Mediterranean and then in other regions, with exceptions in the northeast, mainly in Holland and England.
• Efforts to transition to a modern economy in the 16th century were unsuccessful, and economic growth largely occurred within existing feudal structures.
• The old feudal mode of production continued and even strengthened during the crisis in most regions.
• Europe had to wait until the 18th century to transition to new economic systems and embrace capitalism.

Decline of the Mediterranean Economy

• Fernand Braudel characterized the Mediterranean in the 16th century as a world-theatre or world-economy.
• Despite political, cultural, and social divisions, the Mediterranean region displayed economic unity, mainly driven by trade.
• Dominant northern Italian cities like Venice, Milan, Genoa, and Florence imposed economic activity on the Italian peninsula.
• Christian merchants were active in Syria, Egypt, Istanbul, and North Africa, while Levantine, Turkish, and Armenian merchants reached the Adriatic Sea.
• Venice was the epicenter of this economy, with a vast trading network reaching various parts of Europe, the Levant, the Indian Ocean, and northern Africa.
• From the mid-14th century, certain Italian cities became centers of industries.
• Venice, with extensive trade networks and a large fleet of trading vessels, became the heart of the world economy.
• Spain, under the crown of Castile and Aragon, rose as a supreme power in Europe in the 16th century.
• Spain’s zenith of power was in the 1580s when it had an expansive empire that included territories in Italy, the Netherlands, the Philippines, Central and South America, and rich mines in the New World.
• By the mid-17th century, the dominance of Mediterranean states waned, and they were marginalized in the world economy.
• Antwerp lost its importance, and Amsterdam rose as a significant economic center.

Decline of Spain

• In the 16th century, Spain was a dominant European power with an extensive empire within and outside of Europe.
• Spain’s vast colonial possessions, silver wealth, and trade with its colonies contributed to its prosperity.
• The Habsburg rulers of Spain controlled a large part of Europe, including the Netherlands, Austria, several German states, and some Italian states.
• However, Spain’s decline as a major power became evident in the following century, raising questions about its causes.
• The Arbitristas, a group of 17th-century Spanish writers, discussed the decline of Castile and criticized the state of governance.
• Historians have debated when the decline began, whether it was all-encompassing or limited to specific regions, and the actual causes.
• J.H. Elliott suggests that the decline should be viewed in a broader European context of commercial contraction and demographic stagnation.
• Some historians reject the decline thesis, arguing that Spain had not experienced a rise to begin with, hindered by fundamental economic weaknesses.
• The exact period of decline varies among historians, with views ranging from the 1550s to the 1620s.
• A second controversy surrounds whether the decline affected all of Spain or only specific regions. Some argue it was mainly the decline of Castile and not the entire nation.
• Regional variations are noted, such as growth and expansion in Valencia and Catalonia during the 16th century, followed by stagnation and decline in the 17th century.