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During the reigns of Charles V and Philip II Habsburg, the Spanish Empire had to declare bankruptcy several times. What were the consequences of these events? Did, for example, some of their assets get seized by the bankers, or something like that? Despite the financial troubles, the Spanish Empire survived and grow for several more centuries.

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The huge debt inherited from his father, Charles V (Charles I of Spain), had to be renegotiated with bankers several times. Thus, a system of bonds was created in which bankers accepted to receive the interests only. The principal, however, was never returned and the interests kept on growing. This system of bonds was the first in history, by the way.

The main creditor was the Fugger family, a German banking family, but they were never paid the whole amount and went equally through financial difficulties. With them, many members of the nobility of the Netherlands.

According to Reinhart and Rogoff (2008), Spain has gone bankrupt 13 times: "Spain’s defaults establish a record that remains as yet unbroken. Indeed, Spain managed to default seven times in the nineteenth century alone, after having defaulted six times in the preceding three centuries." Sad record.

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Just a warning to readers here that the first two references are in Spanish. That probably makes perfect sense, given the subject matter, but I'll have to take your word that they back up the text, as I don't know that language. –  T.E.D. Oct 29 '12 at 14:07
    
One of the links does say as fledermaus stated. Spain was the first country to go bankrupt and a bonds ("bonos" in spanish) system was created. However, the second link claims that it was a German banker - not dutch- named Jakob Fugger the one that lent the first bond. His wikipedia pages confirms he was of German origin en.wikipedia.org/wiki/Jakob_Fugger as well as the Fugger family page: en.wikipedia.org/wiki/Fugger, which states that the founding member started in Bavaria. –  Darred Nov 2 '12 at 2:28
    
@OsvaldoM., I've changed their nationality, but the article did make reference to the nobility in the Netherlands and their subsequent financial trouble. –  fledermaus Nov 2 '12 at 8:03
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One important consequence of repeated Spanish bankruptcies was that the modern Netherlands won its war of independence from Spain. It may have (years later), led to the successful secession of Portugal in 1640 as well. In any event, they marked the decline of the Spanish empire, and its eventual withdrawal (in the 19th century) from the affairs of (central) Europe.

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Interesting answer, but could you identify some source documents, please. –  Drux Oct 28 '12 at 15:18
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@Drux: Here are some relevant links. en.wikipedia.org/wiki/Habsburg_Spain historylearningsite.co.uk/phil2.htm But my "real" source was the economic history course I took in college decades ago. –  Tom Au Oct 28 '12 at 16:29
    
thanks, I appreciate it & +1. –  Drux Oct 28 '12 at 16:33
    
The Spanish bankruptcies and the mutinies that were caused by their inability to pay their (largely mercenary) troops on time were an important factor in the success of the Dutch Revolt, but other factors were involved too. –  Felix Goldberg Dec 6 '12 at 18:36
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Since I was just looking up information in David Graeber's Debt: The First 5,000 Years in the context of another question, I can contribute a quote from that source that confirms part of what @fledermaus has already indicated:

Charles V was continuously in debt, and when his son Philip II – his armies fighting on three different fronts – attempted the old Medieval trick of defaulting, all his creditors, from the Genoese Bank of St. George to the German Fuggers and Welsers, closed ranks to insist that he would receive no further loans until he started honoring his commitments. (Some did go bankrupt – for instance, one branch of the Fuggers. But this was surprisingly rare.)

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