Building on the efforts of Swordsmaster in the previous game.
More detailed economic situationRuler: Philip III https://en.wikipedia.org/wiki/Philip_III_of_Spain
Heir: Philip IV (succeeded in 1621)
Other Children: Anne
Charles (died heirless)
Ferdinand (became a cardinal)
Prime minister: Duke of Lerma https://en.wikipedia.org/wiki/Franci..._Duke_of_Lerma
Lerma, a financial wizard, succeeded in turning Spain’s account books around and made himself one of the richest men in Europe with a fortune of some 44 million thalers, Lerma’s personal success attracted enemies and well-founded allegations of corruption; in 1618, the king replaced him with on Baltasar de Z˙˝iga. While the Duke of Lerma (and to a large extent Philip III) had been disinterested in the affairs of their ally, Austria, de Z˙˝iga was a veteran ambassador to Vienna and believed that the key to restraining the resurgent French and eliminating the Dutch was a closer alliance with Habsburg Austria.
Alliances: a close union with the Austrian Habsburgs, member of the Holy Catholic League
in wars against the Ottomans (almost since the beginning of 16th century) and protestants (against the Dutch rebellion since 1566, against the English (since 1585), France (1589-1594 and 1595-1598) )
Wiki Tercio https://en.wikipedia.org/wiki/Tercio
Economic & military situation
Faced with wars against England, France, and the Netherlands, each led by extraordinarily capable leaders, already-bankrupted Spain was outmatched. Struggling with continuing piracy against its shipping in the Atlantic and the disruption of its vital gold shipments from the New World, Spain was forced to admit bankruptcy again in 1596. The Spanish attempted to extricate themselves from the several conflicts they were involved in, first signing the Treaty of Vervins with France in 1598, recognizing Henry IV (since 1593 a Catholic) as king of France, and restoring many of the stipulations of the previous Peace of Cateau-Cambresis. A treaty with England was agreed upon in 1604, following the accession of the more tractable Stuart King James I.
Peace with England and France implied that Spain could focus her energies on restoring her rule to the Dutch provinces. The Dutch, led by Maurice of Nassau, the son of William the Silent and perhaps the greatest strategist of his time, had succeeded in taking a number of border cities since 1590, including the fortress of Breda. Following the peace with England, the new Spanish commander Ambrosio Spinola pressed hard against the Dutch.
In 1618 Spain got involved into the european 30 years war, but by 1640, with the tensions generated by the war, Portugal and Catalunya rebelled. While the rebellion in Catalunya could be supressed, Portugal was lost to the Crown forever.
At the time the lands under the Crown of the Spanish Habsburgs were not unified country but lands unified only by the person of the ruler. Philip III had lands in the Western part of the Holy Roman Empire and was also an overlord of the Spanish Netherlands (and titular head of all of the Low Lands as the Dutch were considered rebels). The King of Spain was also a duke of Milan and Naples and Sicily, this having a considerable powerbase in Italy. Through a personal union with Portugal he was also a King of Portugal and all its colonies under the name of Philip II of Portugal.
To make the things more complicated, Spain was also a union of states: the Kingdom of Castile and Aragon with an autonomous region of Catalunya. All of these lands have their own administration, councils and taxes and significant autonomy. The most taxed Kingdom was Castile but Castilian nobility also occupied most of the high ranked positions in the royal administration. As a result, although hard to manage, the Iberian lands did not experience almost any major rebellions until the later 30's unlike many contemporary countries. However, the complicated tax system of the Spanish Habsburg and constant wars led to a constant shortage of money and heavy borrowing from the bank houses. The silver from the Americas had an important role in balancing the bills of the Crown and covering the debt.
The influx of silver led to a inflation significantly higher than the rest of Europe. The wages were slower to raise which led to impoverishment of a large part of the population. In addition, the higher inflation undermined the competitiveness of the Spanish economy as imports were cheaper and exports more expensive. The Iberian countries exported predominantly raw products (famously wool) that used to be processed abroad ( in the Low Lands). Due to rural poverty and primogeniture there was a trend of immigration towards the bigger cities and New World.
More information on economics
The Spanish Habsburg were devout Catholics. The rebellion and loss of what is now the Netherlands was to a large extend a religious conflict caused by the determination of the Spanish Habsburg to restore Catholicism. All of the remaining lands of Philip III were fully Catholic. In 15th and 16th century virtually all of the Muslim and Jewish minority was expulsed or converted to Catholicism , though there was a general distrust towards the new converts. Spaniards had to even demonstrate "purity of blood": "old Christian" background in order to access certain positions of authority. This distrust led to expulsion of converts from the country and confiscation of their property. This was acclaimed by the rest of the population and church but was ruinous to the economy of certain Spanish regions.
The Spanish Inquisition had an important role in keeping the zeal and eradicating heresies. While far from the religious tolerance, the Inquisition was much demonized in the coming centuries. For example, the famous witch hunts were far more widespread in the other parts of Europe (France, Scotland and Germany).