The ultimate failure of the Iberian Union was reflective of the larger stresses inherent of aristocratic union. While the marriage of Ferdinand and Isabella seemingly created a unitary state, the resulting state structure was what the eminent historian J. H. Elliott termed a composite monarchy. In a composite monarchy, the Trastámara, later Habsburgs, were not so much rulers of a single state, but instead monarchs of many different ones. Philip II thus was not just King of Spain, but his royal portfolio consisted of various other royal titles such as King of Aragon. While some of these titles were politically dead appendices, such as King of Jerusalem, other kingships were quite alive. The post-1469 Spanish monarchs had to navigate a bewildering labyrinth of local privileges, laws, and rights. For example, Castile's Cortes (legislative body) was considerably weaker than that of Aragon, so Spanish monarchs found it much easier to squeeze subsidies and taxes out of Castile, while getting a smaller amount from Aragon necessitated protracted negotiations. Royal successions and the early years of a Spanish monarch's reign were important arenas of political theater as the monarchs both received the loyalty of their various kingdoms and reaffirmed (or renegotiated behind the scenes) the various local privileges in exchanges for such pledges of loyalty. The king then either sanctified local bodies to rule in his stead, or they accepted the king's deputy to rule as his quasi-regent.
The fracture lines in Spain's composite monarchy were already apparent as early as the sixteenth century. A composite monarchy ensured that the monarch would be an absentee ruler for much of his reign, and this greatly strained the system. The growing global dimensions of Habsburg rule added further stresses to the system. Elites in the various components often could not see the overarching rationale to sacrifice blood and treasure for a distant monarch and his wars abroad. The Revolt of the Comuneros in 1520/21 in Castile was a harbinger of the various problems of a composite monarchy. While older historiography stressed the Comuneros' populism and Charles V's end of the revolt as a signal of Spanish absolutism, recent research by the likes of Aurelio Espinosa and Helen Nader have revealed a much more complicated interplay of power and negotiations between the monarch and his elite subjects. Revolt was a tool of last resort by the elite to ensure that Madrid heard their voices when they objected to hardships created by the monarchy. Rebellion and revolt thus became a consistent concern for the Habsburg monarchy, especially as it became a global power.
It was for these reasons that Philip II was initially quite reluctant to assume the Portuguese throne, but the dangers of leaving the throne vacant far outweighed the problems of having another set of elites within the already complicated composite monarchy. But older enmities between the Portuguese and Spanish added further tensions in this royal relationship. Portuguese nobility seldom found the kings’ ears in the Escorial court as the kings' validos (favorites) tended to come from Castile’s grandees. Moreover, Portuguese disenchantment with their personal union grew stronger as Madrid's global grand strategy decidedly favored Spain's overseas and seldom devoted an equivalent amount of resources for the upkeep of Portuguese ones. In short, the Iberian Union satisfied few actors; Madrid saw Portugal as a less than enthusiastic partner which the crown had already given many privileges and the Portuguese saw the Castile as an intrusive interloper. But Madrid's global empire and its problems was not just limited to Portugal. By the late sixteenth century, Aragon and Catalonia saw a marked economic decline with the rise of the Atlantic economies Madrid was encouraging. Likewise, many of its elites bristled at committing men and money to fight the seemingly endless wars in Italy and the Low Countries. Global power came at a price and the system of mutual obligations of a composite monarchy increasingly could not pay for it.
It was not a coincidence that the collapse of the Iberian Union occurred simultaneously with the Catalonian Revolt. The 1640s were years of disaster for Spanish power and these reverses undermined the current valido, the Count-Duke Olivares, project for imperial power, the Union of Arms. Olivares recognized he weaknesses of the sixteenth-century composite system and instead tried to transform the composite monarchy into something more akin to a collective defense pact under the aegis of the Habsburg Philip IV. But the political culture of collective obligations and negotiations was too entrenched within the Iberian peninsula for the Union of Arms to gain much traction.
Olivares’s half-realized system functioned fairly well until a perfect storm of reverses in the 1640s, as well as a widespread inflation brought about by Madrid’s currency policies, exposed the hollowness of the Union’s rhetoric. It became much harder for elites to justify their service to the Habsburgs in light of their failures in Italy and the Low Countries. When faced with revolts both in the east and west, Olivares and Philip IV elected to devote Castilian power to deal with Catalonia because of the threat posed by France. By the time the Catalan revolt had been stabilized, the Portuguese rebels were much too entrenched to dislodge.
Sources
Elliott, J. H. The Count-Duke of Olivares: The Statesman in an Age of Decline. New Haven: Yale University Press, 1986.
_. Spain, Europe & the Wider World, 1500-1800. New Haven [Conn.]: Yale University Press, 2009.
Parker, Geoffrey. The Army of Flanders and the Spanish Road, 1567-1659: The Logistics of Spanish Victory and Defeat in the Low Countries' Wars. Cambridge [u.a.]: Univ. Press, 2004.
White, Lorraine. "Strategic Geography and the Spanish Habsburg Monarchy's Failure to Recover Portugal, 1640-1668." The Journal of Military History 71, no. 2 (2007): 373-409.