Finance under Charles V

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As king of Spain Charles has received most criticism from historians for the financial management of his Spanish inheritance. To what extent is this criticism deserved? Finance was Charles greatest problem as the ruler of not just Spain but also the German states, much of Italy and Flanders, including its lucrative cloth market. In theory each state would provide enough money to serve its own interests and each country would not be excessively financing another. Charles, however, used money from any region that was willing to give it to him to finance any of his many wars. The Low countries and Italy initially financed his active foreign policy but following the 1539 revolt of Ghent Charles turned to Spain as his main source of revenue His reliance upon the tax from the Castilian Cortes and loans using Spain as collateral to pay for wars that weren’t strictly in Spain’s interest almost ran the country into bankruptcy. Charles was using extraordinary sources of Spanish revenue to maintain his control of Europe. Such sources of revenue could not be continued in the long run and it is no surprise that by 1558 Philip II had declared bankruptcy. The powerful Spanish Church contributed much to Charles V treasury. Extremely wealthy it gave an official and expected but not compulsory source of revenue. From the 1530s onwards Charles became increasingly dependent on it, not least to subsidise his losses through the new taxation system of the alcabela called the encabezamiento. The Church’s largest contribution was 25% of all tithes towards the crown in the form of the “tercias reales”. An irregular Church organized subsido was organised granting one million ducats during all of Charles reign, this was for times of real emergency and contributed little to Spain’s overall revenue. The cruzada, a tax that granted bulls of indulgence in return for money, paid 150 000
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