Isolation (Iberian Wedding)

The new Spain's policy towards diplomacy would be isolation. with their only notable neighbors being Aragon and France, diplomatic action would be limited. Aragon's independence would be guaranteed by Spain (See "Aragon(Iberian Wedding)", and a Franco-Spanish Alliance would be created like in OTL.

What Armada???
Without Aragon, Spain will be never have a great grasp on continental Europe as it did historically. Charles will never become Holy Roman Emperor, and Spain will never gain the Netherlands or Italy. While it may be saddening, good will come out of this. The Spanish will not intervene in English Politics, and the Spanish Armada will not sink. Instead, the great Spanish Navy (made from brilliant Portuguese Sailors) will survive into the Modern Age, and Spain will rule the waves instead of England, who will fall behind on naval tech due to religious disorder. Except for France and it's Iberian Neighbors, Spain will ignore Europe and completely focus on Colonialization and Imperialism.