Spanish Empire - The Bourbon Spanish Empire: Reform and Recovery (1700–1808)

The Bourbon Spanish Empire: Reform and Recovery (1700–1808)

Under the Treaties of Utrecht (April 11, 1713), the European powers decided what the fate of Spain would be, in terms of the continental balance of power. The new Bourbon king Philip V retained the Spanish overseas empire, but ceded the Spanish Netherlands, Naples, Milan, and Sardinia to Austria; Sicily and parts of Milan to Duchy of Savoy; and Gibraltar and Minorca to the Kingdom of Great Britain. Moreover, Philip V granted the British the exclusive right to slave trading in Spanish America for thirty years, the so-called asiento, as well as licensed voyages to ports in Spanish colonial dominions, openings, as Fernand Braudel remarked, for both licit and illicit smuggling (Brudel 1984 p 418).

Spain's economic and demographic recovery had begun slowly in the last decades of the Habsburg reign, as was evident from the growth of its trading convoys and much more rapid growth of illicit trade during the period, though this growth was slower than in its northern rivals who had gained increasing illicit access to its empire's markets. Critically, this recovery was not translated into institutional improvement because of the incompetent leadership of the unfortunate last Habsburg. This legacy of neglect was reflected in the early years of Bourbon rule in which the military was ill-advisedly pitched into battle against the Quadruple Alliance (1718–1720).

Following the war, the new Bourbon monarchy would take a much more cautious approach to international relations, built upon a family alliance with Bourbon France, and continuing to follow a program of institutional renewal.