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The Spanish Confederation draws it roots to the ever present unificationists in Castile, which including the king, called for the complete unification of Spain into a singular political entity. This movement regardless of its influence on royal membership did not arise until the 1450's during the Granadan revolt. Behind the scenes however the work to unify the areas was done over the entire beginning half of the 1400's as well with Castilian settlers and missionaries converting over half of Granada before its revolt in the 1453. The Granadan revolt and later civil war became the catalyst for Castile's centralization push with the area being fully claimed and ruled by Christians. by 1457. This shift in religious and monarchical dominance in the area led to Castile's king being known as the sovereign lord and king over Morocco (which was fully conquered as a Christian kingdom) Granada, and its small "Kingdom colonies" in the Canaries and Capo Verde isles.
Midway through the 1460's the Castilians with claims to the Aragonian throne but an unfavorable personal union invaded Aragon to seize and force a preferable personal union on the moderate kingdom. This invasion was met with a shocking scorched earth tactic by the ruling monarchy and its military which not only led to the enmity and hate of the royal family for the acts but delivered most of the Aragonian population into the hands of Castile's influence readily, which included new nobility, a push for cultural assimilation, and various other reforms which further integrated Aragon's economy to Castile's and expanded both their economies exponentially. Only a few years post war Prince Carlos of Castile son of the Great and legendary King John, made the decision to bring Aragon and all constituent kingdoms in as the Spanish Confederation in order to centralize authority for a long period of time and allow for Castile to more properly manage its many territories.
The Spanish Confederation is has a few purposes mostly dealing with the centralization of Castilian power among the nobles of the various kingdoms and political systems in order to precipitate the creation of an eventual Kingdom of Spain with the possible inclusion of Morocco as a series of new Spanish cultured provinces as part of the kingdom.
Along with this the other specific purposes are to help create a centralized economy in the confederation in order to make a larger more powerful economy based on trade among other things using Venice as part of a main trade symbiosis between Castile, its territories and Venice and her trade. The two most major members, Castile and Aragon are the main proprietors of this with their traders bringing a huge volume of trade back to Castile proper to be resold and redone for economic benefit.
Kingdom of Castile (Leading Kingdom)
Kingdom of Aragon (Ruled by Loyal Magistrate)
Kingdom of Granada (Annexed by Castile)
Kingdom of Navarre (Semi Autonomous, Ruled by Loyal Magistrate)
Kingdom of Morocco (Ruled by Loyal Magistrate)
Kingdom of Cyprus (Observer state)