King Philip ll was a Hasburg anf the aim of Hasburg diplomacy to prevent alliance between England and France; Greatest threat to Spain. Philip had raised tax called the Millones ducats which was to raise 8 million ducats over 6 years. The tax came in 1596 and it was immediatly raised to 9.3 million ducats. The extra 1.3 million was raised by taxing food supplys. In 1600, the reign of Philip, tax was raised to 18 million ducats and to be collected in 6 years. The taxes were raised on wine, meat, viegar and oil. The 3 purposes were: to pay royal guards, pay royal household and the unkeep of frontier gaarrisons and any left over would be used to pay off royal debt.. In November 1596, crown was declared bankrupt again. Payment to lenders only started again after much delay, but now to outside nations, Spain was not a great power. In 1956 Philip cut back on royal expenditure and in 1598 handed low count. In South America it needed less Spanish goods. Peru provided a good trade in wine, grain and oil. Mexico had good cloth trade and far east was providing South America with luxury goods.