Charles I left Philip II of Spain an expansive but vulnerable empire with a government that required reform. The government lacked a fixed capital and relied on Charles' constant movement and presence. Local administration depended on nobles as councils grew in power to govern new policy areas like war. Finances were poor with debt and revenue failing to cover the costs of continuous war with France over dynastic rivalries. The economy was behind compared to places like the Netherlands. While Spain remained largely Catholic, Protestantism threatened the wider empire.