With the annexation of Tournaisis, Friesland, Utrecht, Gelder and Zutphen and the protectorate over the prince-bishopric of Liége, which, under Erard de la Marck (1506-38), had finally accepted Hapsburgian control, the unification of the Low Countries was completed. It still remained to give the country its definite status. Thanks to the treaties of Madrid and Cambrai, all connection with France had been severed, but the Reichstag endeavoured, on several occasions, to revive the nominal rights of the Empire on the Low Countries and to compel the provinces to pay the imperial tax. The emperor, foreseeing that his son might not succeed him in Germany, was not at all keen to encourage such claims. On the contrary, he exempted, by his own free will, the Low Countries from the imperial tax, and he endeavoured to make it a sovereign country attached to Spain, which should remain, with it, the heritage of the Hapsburg family. We are far from the time when he entertained the suggestion of creating a separate kingdom in the Low Countries, under the inspiration of his Burgundian advisers, and though this suggestion recurred in 1539 and 1544, connected with the project of the marriage of the emperor's daughter with the French prince, the sincerity of the emperor's proposals, at that time, may certainly be questioned.
The victory of Muhlberg (1547) provided Charles with an excellent opportunity to settle definitely the situation of the Netherlands towards the Empire. Cowed into submission, the Reichstag readily admitted the Transaction of Augsburg (1548), by which the Netherlands became the "circle of Burgundy," under the protection of the Empire, and whose sovereign was represented on the Reichstag. The circle undertook to pay a small subsidy, but was entirely independent of imperial jurisdiction and imperial laws. In fact, it constituted an independent sovereign State, which benefited from the Empire's military protection without any obligation on its side, since the emperor had no means to enforce the payment of the tax in case it should be refused.
The Augsburg Transaction was completed in 1549 by the Pragmatic Sanction, which unified the successorial rights of all the provinces. This new edict marked a new stage in the work of centralization by securing the inheritance of all the provinces to the same prince. Thus, of the two essential characteristics of modern States, unity and independence, the first was practically achieved; the second, however, was not yet within sight. It is characteristic of the status of Belgium, as established by Charles V, that this period of consolidation marks the final break up of the Burgundian tradition. The principle of nationality, which had asserted itself so clearly under Philip the Handsome and at the beginning of the reign of Charles V, was finally defeated, and, for two centuries and a half, the dynastic principle of the Hapsburgs was destined to dominate the fate of the country.