In the 16th century Felipe II committed the classic strategic blunder of allowing his policy objectives to diverge too far from his geopolitical realities. At that time Spain enjoyed two important areas of influence: Latin America and the Western Mediterranean. Latin America, despite the best efforts of English sailors, was a major source of wealth for Felipe’s Spain. In the Western Mediterranean Aragon had long had an important commercial empire. Nevertheless the central focus of Felipe’s foreign policy was to maintain his control of the low countries. This meant constructing and maintaining the Spanish road connecting the low countries to other Habsburg territories and going to war against England. The costly, and ultimately futile, effort to hang onto the low countries drained Spain’s coffers of Latin American silver, resulting in Spain declaring bankruptcy no less than three times. Felipe’s strategic blunder condemned Spain to centuries of progressive decline as a European power, from which, arguably, it began to recover only at the beginning of this millennium.