Anglo-Spanish War (1585-1604)

In this episode, we examine the Anglo-Spanish War of 1585–1604 through the financial pressures facing Philip II’s Spain, challenging the familiar image of the Spanish monarchy as an irresponsible serial defaulter. Drawing on the research of Mauricio Drelichman and Hans-Joachim Voth, we explore how the crown financed prolonged warfare against England through short-term asientos and long-term juros, and why much of Spain’s debt remained sustainable despite the enormous costs of imperial conflict. Particular attention is given to the 1588 defeat of the Spanish Armada and other unexpected military setbacks, which strained royal finances and contributed to liquidity crises. By connecting war, credit, and state finance, the episode shows how the Anglo-Spanish struggle tested the fiscal resilience of the Habsburg monarchy and reveals that Spain’s financial difficulties were shaped as much by the unpredictable costs of warfare as by the scale of its imperial ambitions.