Spain is a parliamentary constitutional monarchy located on the Iberian Peninsula of Europe. At its peak, Spain ruled an empire that included parts of Europe as well as substantial overseas territory.
Spain in 1632
Under Philip IV of the Habsburg Dynasty, Spain had entered the Thirty Years' War against the Protestant Union with the intention of assimilating the Dutch Republic back into the Spanish Empire. By the early 1630s, Spain's economy was in ruin. Spanish armies in Germany were forced to "pay themselves" by pillaging and looting. Also problematic were the Dutch, who, having made their navy a priority during the Twelve Years’ Truce (1609-1621), proceeded to ravage Spanish and (especially) Portuguese maritime trade, on which Spain was wholly dependent after the economic collapse of 1627. The Spanish, with their resources stretched thin, were increasingly unable to cope with the growing naval threats. Spanish victories in Germany and Italy were not enough to matter, and their navy especially began suffering serious losses.
With the emergence of the New United States centered on the timelost town of Grantville, Spain convinced its ostensible ally, France, to clear the way for a Spanish invasion in June, 1632. France's Cardinal Richelieu, suspecting that the Spanish attack would be easily repelled, contacted Albrecht von Wallenstein and arranged a concurrent attack directly on Grantville.
Spain subsequently allied with France, England, and Denmark to form the League of Ostend and wage war on the newly established United States of Europe. At the start of this new alliance, France and England betrayed the United Provinces of the Netherlands at Dunkirk. While this effectively destroyed the Dutch fleet, many Spanish ships were heavily damaged. Dunkirk allowed Spanish armies under Cardinal-Infante Ferdinand to easily invade the Netherlands in 1633. But by 1634, Ferdinand had become doubtful of the purpose of the war after reading Grantville's history books and coming into contact with USE diplomats. He ultimately broke with his brother Philip IV and reached a compromise with the Prince of Orange, creating his own kingdom in the Netherlands.
Assault on Rome
In 1635, Spanish forces from Naples invaded Rome and installed Cardinal Gaspar Borja y Velasco as Pope. This was not authorized by the Spanish government, and King Philip IV was very upset when he heard about it, as it would have a negative effect on Spain's possessions in Italy, and on Spanish foreign policy in general.
USE civil unrest
By the year 1636, Philip wanted to take advantage of the civil unrest in the USE, but could not due to unrest in Portugal and Catalonia, and the aftereffects of Cardinal Borja's seizure of Rome.
In early 1636, Spain is still a power in Europe, but is no longer predominant. Its ability to project power is constrained by its fragile economy, largely dependent on the New World treasure fleets, and by its own internal problems. In at least some ways, it is still subject to old attitudes; there is still no radio in Madrid.
The assault of the Philippines by the Dutch and Japanese along with conflict with the USE Alliance in the New World further erodes Spain's power