[Spain WI] - Prospects without Colonialism?

So, the colonialism period that Spain enjoyed over the likes of the Americas and elsewhere made Spain a world power to be reckoned with, one of the wealthiest powers in Europe able to finance wars against the British, Dutch, Ottomans, etc... It made Spain a Great Power all the way up until the Napoleonic Era, and even as late as the early 1800s Spain still had footholds in the Caribbean and Pacific.

So... what if the Spaniards hadn't had that benefit? What if they showed up to the Americas only to find the Arawak, Aztecs, Incans, Mayans, Taino and others much more technologically advanced and inured to foreign diseases? (Veering on ASB, but bear with me)

What would the benefits and drawbacks have been for Spain, and how differently might it have developed? Here are some thoughts I have:

Nearly 2 million Spaniards settled in the Americas during the colonial period, a population drawn from Peninsula that would stay here. Rather than serve and settle abroad, this is a population pool that could be involved in Italy or the Low Countries? 85% of the population was Castilian rather than Aragonian, so the population disparity could be even larger given it was Castile that conducted the colonies.

Gold and silver from the Americas was used to pay for campaigning in Germany, Italy and Netherlands, but also caused major inflation, hampered exports and hindered industrial development in Spain proper. Domestic production was heavily taxed, and titles were often sold that removed their holders from tax obligations. Perhaps Spain would be able to develop more of a native industry and maintain a more equitable society at the cost of losing their territories in Italy and Netherlands? And perhaps their efforts to support Catholicism and stamp out the Reformation would fail spectacularly in certain regions?

What other changes might you see arising as a result of this? Negative or positive?
 
Pro:
- No need to maintain a large fleet and army around the globe to defend against the British, French and Dutch
- No need to deal with rebellious colonies
- No inflation and bankrupcies in the 16th and 17th century
- More populated Iberia

Con:
- No massive income from the New World
- Spanish is not a world language
- No World Power Status as OTL

EDIT: I think Spain has less to worry about but it they won't be in a better position to say at least. The Spanish American holdings with wealth did help a lot. It went as far as destabilizing the Ottoman Economy indirectly.
 
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The stage was already set for Spain to jump headlong into European Politics even without Columbus. Barring some freak accident, the King of Spain is going to be a Hapsburg. The Protestant Reformation will break out on schedule and Spanish troops will be fighting all across Europe for the Hapsburg cause.

I'd expect them to do well for a little while and then they would crash and burn when they overextend. Spain would still be a Great Power, but it wouldn't be the greatest one. There would certainly be no Spanish century.
 
I think we'll see earlier instances of Spanish royal insolvency-for example, in 1528, IOTL Spain narrowly avoided insolvency by essentially handing Venezuela over to the Welsers, a German banking family (the colony was later taken back by the crown). ITTL, we could see Spain unable to hire mercenaries or even pay its own armies during the Italian Wars due to 1528 coming in without being able to restructure their debt. This change could see them lose territory in Italy to France and have to scramble to raise the funds in Europe-possibly triggering further conflict, as attempts to raise taxes on their holdings in the Netherlands and the Holy Roman Empire sees conflict break out there on a large scale. So, Spain's rivals would be more powerful, and Spain would struggle to maintain its holdings in northern Europe, where rebels against its rule would be in a better position to wage wars of attrition against Spain.

Another potential butterfly, and a potential workaround for the Hapsburgs (though not necessarily Spain, if their empire is split as per OTL) is the earlier reclamation of silver mines in their Czech holdings. IOTL, Czech silver mines flooded in the early 16th century and were not reclaimed. Without the silver of Potosi coming into Europe, there might be more effort made to drain the mines and get them operational again. One thought I've had is that, if there is an Austrian/Spanish Hapsburg split, the Austrian Hapsburgs may use Czech silver (either directly or as collateral for large loans) to bribe their way into taking the Polish kingship.
 
I think the bigger impact would be the financial fate relative to Portugal, who by treaty they've conceded the African and Transcape commerce too. Lisbon won't be much the poorer, and without Spanish silver flooding into the North Sea to provide the capital for the banking industry and commercial revolution to boom as quickly as it did or act as gurantees to secure Genoese credit, the Italian city-states and Portugese model will be dominant longer. Expect more rivalry on the penninsula rather than friendship as Portuguese spices and West African gold (imported by Portugal) become the main store of value in the budding economy, likely to the benefit of the Med. Basin over the North Sea.
 
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