The decline of the hispanic monarchy: Felipe III had the largest empire and he delegated his authority to a valido that depended on king's favour. He faced several problems and he solved them with pacifist policies->Peace with England-Treaty of London, Peace with France,Twelve years Truce with the Netherlands, this was an indirect wayof recognizing the Northern provinces independence as this truce wasn't able to be renewed. At the Thirty years war, this was confirmed thanks to the Treaty of Westphalia. Felipe IV, Duke of Olivares, his valido, began an agressive foreign policy participating in the Thirty years war against the German protestant princes, but as an ally of the Holy Roman Empire. France wanted to reduce Spanish influence so they began a wae where the Habsburgs were defeated. But this war finished thanks to the Treaty of Westphalia, but as a consequence Spain lost all their territories in Europe. Duke of Olivares introduced financial reforms and with the Union of Arms tried to share military expenses, but economic difficulties of the monarchy made it impossible. There were rebellions against the Union of Arms in Cataluña and Portugal. Cataluña became part of France and Portugal took advantage of this rebellions and became independent. War with France continued until the Peace of the Pyrenees was signed, and this ended the Spanish hegemony in France. Monarchs continued borrowing money and several bankruptcies started. Carlos II, died in 1700 without children, so there wer two candidates, Felipe V or Archiduque Carlos of Austria. His will appointed to Felipe V, but the other countries in Europe didn't accept it, so they started the War of Spanish Succesion 1701-1713. Felipe wonand since then the French Bourbon dynasty rules Spain. The bourbon dynasty in Spain: The war of Spanish Succesion: It was an internal and an international conflict. The International conflict was between France and Europe, and finished thanks to the Treaty of Utecht 1713. As a consequence, Spain lost all its possession because Flanders became independent and they lost Italian kingdoms. Intenal conflict, Castilla supported Felipe V and Aragon supported Archiduque Carlos of Austria, when Felipe conquered Cataluña, the war ended. He also defeated Valencia and Aragon in the Battle of Almansa. Spain in the 18th century: Domestic policy: After the war Felipe unificated Castilla and Aragon. He supressed the laws and privileges of Aragon and created new laws for all the country. Decretos de Nueva Planta 1702-1716 were issued to abolish old privileges of Aragon and imposed Catilian administrative system. Spain was divided into provinces reuled by a captain general, Audiencias were the tribunals, Corregidors governed municipalities and Intendentes collected taxes. Felipe V, Fernando VI and Carlos III centralized administration and the king had absolute power, where secretaries and ministers helped him.Fernando VI and Carlos III introduced economic reforms to modernize the country and they wer seen as an enlightened despot. When Felipe V died Fernando VI succeded him, and as he died without children, Carlos III, king of Sicily and Naples, became king of Spain too. Foreign policy: After the Treaty of Utrecht Gibraltar became a British colony and the asiento, license to trade with America, was also ceded to Britain. Spain and France made different alliances called Family Compacts. Participation in wars was profitable because it recovered possessions in Italy that were ruled by Felipe's sons. The foreign policy during Fernando's reign was pacifist and Carlos III signed the third Family Compact and participated in wars with different results.