Spain Under Manuel Godoy: The Crisis of the Old Regime

Manuel Godoy and the Reign of Charles IV (1792-1808)

Between 1792 and 1808, Manuel Godoy (who served a brief hiatus from 1798–1800) embodied Enlightened Despotism amidst a pervasive fear of revolution. Following the execution of Louis XVI and the subsequent war with France, Spain attempted to manage the War of the Convention (1793). Originally, Spain sought to win the war rather than sign a peace treaty.

The War with France and the Peace of Basel

Great Britain offered the support required to assist Spain against France by sea, but this cooperation was declined. By 1794, certain factions—including the forces of Catalonia, Barcelona's defense committee, and the Council of Gipuzkoa—found it easier to negotiate peace. Godoy eventually sought to end the war, leading to the Peace of Basel (1795). Spain lost territory, ceding its portion of the island of Santo Domingo to France in exchange for commercial advantages.

The British Threat and Naval Defeat

A year later, the alliance between Spain and France was restored through the Treaty of San Ildefonso to fight against England. Under Charles IV, the British monarchy posed a real threat to American market access. The Spanish fleet was devastated in the Battle of Cape St. Vincent (1797), and henceforth, overseas trade remained unprotected.

Economic Reforms and Enlightenment Influence

During a brief period, Godoy's reformist spirit returned; he protected agricultural transformation, eliminated certain taxes, liberalized manufacturing prices, and reduced the power of unions and guilds. In 1797, the government appointed some of the Enlightenment's most prestigious names. While monarchical absolutism was anti-revolutionary, many of these Enlightenment ideas expanded among the clergy. However, the well-known Enlightenment program was altered due to fear of the Inquisition.

Fiscal Crisis and the Seizure of Church Property

An economic and fiscal crisis followed: food prices rose, and the financial situation became unsustainable. The Treasury also faced significant problems, leading to the early seizure and sale of Church property for the first time. Since 1804, the state was plunged into a situation of failure. Regimes utilized the seizure of property as a new weapon to transition toward the 19th-century liberal order, challenging the traditional social structures sustained under Charles IV. This process of disentailment, which ended in 1808, saw one-sixth of Church property pass into private hands. The sale of this land established a new rural society.