For almost 700 years, the Hapsburg family was one of the greatest dynasties in Europe. Over the course of its history, members of the family at some point controlled almost every part of the continent. The greatest extent of European control was held by the famous Emperor Charles V (1500-1558). As he approached old age Charles, plagued by internal conflicts and the united hostility of the rest of Europe, suffered a breakdown and retired to a Spanish monastery. He subsequently became convinced that such vast possesions were too great for any one man to manage, and so he divided his lands between his two close relatives, Philip and Ferdinand. His brother Ferdinand inherited the title of Holy Roman Emperor and control over Austria and much of Germany. The history of his descendants is told in The Austrian Hapsburgs from Charles V. His son Philip (II of Spain) inherited the personal lands of his father, which had been gained through conquest and marriage alliances. The greatest of those lands was Spain, and so Philip's line is known as the Spanish Hapsburgs.
In order to properly understand the position of the Spanish Hapsburgs one must realise the extent of the lands which Philip II inherited in 1556. In addition to the entirety of modern Spain, consisting of the medieval kingdoms of Castile, Aragon, and Navarre, there were the direct holdings of the Spanish crown: Sardinia, Sicily, and the Kingdom of Naples which consisted of the southern half of the Italian penninsula. There were also the overseas Spanish colonies: most of South America, Central America, Mexico, and parts of the African coast. Finally, there was the Seventeen Provinces of the Netherlands, which included the modern nations of the Netherlands and Belgium.
Philip II was one of the most devout monarchs in the history of Europe. As a powerful Catholic king in the era of the Protestant Reformation, Philip felt a personal duty to keep the church together. This was the basis of much of the trouble and the glory of Philip II. The first of his many conflicts came in 1568 with the rebellion of the modern Netherlands. The Netherlands had come into the possesion of the Hapsburg crown through a marriage alliance with the Counts of Burgundy who had conquered the region only a few years before. A rough alliance of historically and linguistically disparate political entities, the Netherlands were nonetheless geographically and religiously seperated from Spain and encouraged in their revolution by the Dutch Stadholder1 William I, Prince of Orange. The revolution continued sporadically from 1568-1648 and Philip, who saw the conflict as an attempt by the Dutch heretics to break up Catholic hegemony, poured much of the resources of the Spanish treasury into repressing the rebellion.
In 1580 the death of the last Portugese king, Cardinal Henry, put Philip in a position to claim inheritance of the Portugese crown through his marriage to a Portugese princess, Maria (Henry's niece). The claim was succesful, despite the fact that Maria had been dead for 12 years, largely because the Portugese court sought the protection of the powerful Spanish navy for its newly gained colonial possesions: Brazil, Ceylon, parts of Indonesia, and several areas of southern Africa. As a gamble this move was largely unsuccesful. Philip neglected the Portugese possesions and they were quickly siezed by Dutch traders, ironically allowing the Dutch to have one of the largest colonial empires while not yet independent themselves. At the same time, Spanish colonial holdings were growing with the conquest of the Philippines and the founding of the colony of St. Augustine in modern-day Florida.
Relations with England
The final thread of Philip's international policy was the famous conflict with Queen Elizabeth I of England. There were three main reasons for this enmity. The first was religious: Elizabeth had displaced her Catholic sister Mary I as sovereign and continued her father Henry VIII's heretical conceit as head of the Church of England. The second was political: England was providing aid to the Dutch in an attempt to break up Hapsburg power and distract Spain from the race to acquire overseas colonies. Finally, there was a personal element as well: After the death of Mary I (who had been Philip's second wife) Philip had proposed to the famously virginal queen and been soundly rejected, forcing him into a backup marriage with his cousin Maria of Austria, the grandaughter of Emperor Ferdinand. On this, his third marriage, he finally produced a trustworthy heir2.
Philip made several efforts to damage the British monarchy, including secretly supporting Catholic rebels in Ireland which led to the siege of Fort Del Oro in 1580. In desperation, and in retribution for the execution of the Catholic Mary Queen of Scotts the year before, Philip assembled the famous Spanish Armada in 1588. The Armada was a conglomeration of all available ships gleaned from the entirety of Philip's empire. It sailed up the English Channel with the intent of picking up Spanish soldiers under the command of the Duke of Parma on campaign in the Netherlands and transporting them to the English coast for a full-scale invasion. Given the relative size of the respective armies, it seems clear that a succesful landing by Spanish troops would have been devastating to the English state. Due to a combination of luck and the brilliant leadership of Sir Francis Drake, however, the Armada was decimated during its transit of the English Channel and swept into the North Sea. The Spanish Navy rebounded to its former size within a year but Philip's confidence was destroyed and he spent the remainder of his reign trying to deal with internal problems and the drain of the Spanish treasury. Philip was widely known as the sort of leader who seemed capable of supporting the entirety of the Spanish state through his own tireless efforts and attention to detail.
Philip III of Spain, also Philip II of Portugal, was poorly suited to live up to the precedent set by his father. He was neither as capable nor as hardworking as Philip II. Under his supervision both the army and navy took great loses at the hands of the Dutch rebels, including a devastating naval loss at Gibraltar in 1607. In 1618, Philip dragged Spain into the Thirty Year's War in an attempt to live up to his father's legacy as a Catholic warrior. This conflict, originally a minor battle between small German states, expanded greatly to engulf much of Europe in somewhat the same way as WWI except that the alliances in the Thirty Year's War were generally religious.
Philip IV continued the downward slide of the Spanish Hapsburgs. He took power in the midst of the war and the still-raging Dutch revolt (sometimes known as the Eighty Year's War). Blows continued to rain upon the Spanish crown as Portugal and Catalonia both revolted in 1640 and the Spanish army was badly defeated by France at Rocroi in 16433. The war finally ended in 1648, projecting such fledgling powers as the Kingdom of Piedmont-Sardinia4 and the Electorate of Brandenburg5 onto the European stage. Other measures achieved by the final settlement included the negotiated end to the Dutch rebellion, in which the northern provinces gained their independance and the southern provinces remained under Spanish control. The regions were later known as the Dutch and Spanish Netherlands, respectively, and much later known as The Netherlands and Belgium.
The last of the Spanish Hapsburgs, Charles II took it upon himself to discover a way to restore Spanish power. As the French Bourbons had now, through the Thirty Year's War, become the most powerful family in Europe, Charles managed to engineer a marriage and alliance between his sister Maria Theresa and the French King Louis XIV. In the end, this just muddied the waters upon Charles' death in 1700. Louis, of course, attempted to place his son, also Louis, on the throne of Spain. This effort was contested by the Austrian Hapsburgs who claimed the throne through their descent from Charles V and also through the marriage of Emperor Ferdinand I's daughter, Maria, to Philip II. The real reason for their objection was fear that French access to the Spanish new world empire would upset the balance of power in Europe.
What ensued was the clumsy and ultimately non-decisive War of Spanish Succession. The resolution, in 1713, established a treaty in which some non-Spanish holdings such as the Netherlands were given to the Austrian Hapsburgs, some holdings such as the Kingdom of Naples were given independence, and the Bourbon family gained the right to the throne of Spain so long as it was never combined with the throne of France and their respective colonies remained separate. Although all subsequent kings of Spain, and the Bourbon kings of France, were descended from Hapsburg ancestors, this may be considered the end of the Hapsburg control of Spain and of the Spanish line of the Hapsburg family.