Traditional Burgundy was under French rule. However, the Duke of Burgundy ruled a stretch of land commonly referred to as "the Burgundian lands", of which the Netherlands was the major part. It also included Luxembourg and Franche Comté.
Charles Habsburg, Charles I of Spain, Duke of Burgundy, and Emperor Charles V, had a lot of balls to keep in the air. He ruled the vastest Empire in Early Modern Europe, challenged only by Suleiman I of the Ottoman Empire. One of his titles was Duke of Burgundy, Burgundy being a loose confederation of lands that stretched from France to the Holy Roman Empire1. The main portion of it was the Netherlands, which comprised seveteen separate provinces.
The Netherlands were probably the most highly-urbanized and forward-looking part of Europe at this time. They were rich and developed, and fiercly guarded their traditional rights and privledges. They did so through the provincial Estates ("assemblies"), and the national Estates-General.
Charles and the Netherlands
Charles was born in Ghent, in the Netherlands, and lived there until he acquired his larger Empire in 1516. He was under the care of Margaret of Austria (later to become regent of the Netherlands) and tutored by a range of Burgundians. When he left to take up his Empire in Spain in 1516, he took these Burgundians with him to form an inner circle of advisors. Thus it was not unlikely that these early Burgundian advisors over-stressed the importance of the Netherlands to Charles.
The political make-up of the Netherlands
The two most powerful political groups in the Netherlands were the nobility and the wealthy merchants. Merchants dominated the largely self-governing towns and, as the is the nature of any bourgeois, they were fierce in the protection of their wealth and freedoms. Charles had to fight long and hard against the Estates to benefit from the taxes which may be reaped from commerce. Outside of the cities, the nobility were equally as fierce in their protection of their traditional rights (which are called fueros).
Thus Charles found himself increasingly frustrated when he attempted to extract money from the Netherlands. And he was unrelenting in his efforts to extrat money from this rich part of his Empire - both for its own defence from France during the Habsburg-Valois wars, and for obligations in other parts of his Empire.
Because of the extent of Charles' Empire, it was inevitable he would be absent from his post as Duke of Burgundy to rule elsewhere. During his reign, there were two regents, both of whom history have been kind to - Margaret of Austria and Mary of Hungary. Although Charles respected both of them and put trust in their decisions, he was not hesitant in over-ruling them when he felt the need. He dictated policy in all matters of foreign affairs, such as ordering the Netherlands to war against France in 1536.
"What is tolerated in Germany, must never be suffered in the Netherlands" wrote Charles to his sister.
The Holy Roman Empire was already split between Catholic and Protestant princes, and the rot of heresy was now beyond any Emperor's medicine. Charles, an incredibly devout Catholic, was terrified of the same fate befalling the Netherlands. The Netherlands was the home of Erasmus, that great defender of freedom of worship. Protestantism appealed to the citizens of the Netherlands as it did the Germans, but as Charles was much stronger in the Netherlands he was capable of crushing heresy.
The Netherlands was sealed off from new religous ideas by harsh repression and the Inquisition. Hence Protestantism had no time to become an established movement. As an established movement, Protestantism often merged with wider political and social dissent which could threaten the ruling class. This meant it was in the interest of the nobility in the Netherlands to put down the heretics, but such was the attitude towards Charles' harsh methods of repression that there is evidence of the nobility often failing to implement the Emperor's religious policies.
Attempts at centralisation
The fundamental problem Charles faced in ruling the Netherlands was his weak central authority in the face of strong, local assemblies. Hence to try and increase his power and authority he tried to centralise authority to speed up the cumbersome government. In 1534, he tried to bring the provinces together into a closer union which would have well-defined military and fiscal obligations to the Empire. The Estates-General rejected the attempt, and Charles never again tried to centralise authority.
However, in 1549 the Pragmatic Sanction was agreed, which at least ensured Charles' successors would inherit all the Netherlands. It also managed to wrangle some fiscal obligations from the lands in the event of their attack, and even in the event of the Holy Roman Empire being threatened by the Ottoman Empire.
Of course, Charles' actions in the Netherlands sit in the history books in the shadow of the Dutch revolt against his successor, Philip II. Historians of course look for the origins of the revolt in Charles' reign, and they are divided on whether they lie there. On the one hand, Charles did not face organized dissent from the Dutch nobility on the scale which his son did. He did manage to alientate the lesser nobility and lower classes, because as these were the only groups his power allowed him to attack, he did lessen their privledges. Charles' religious persecution doubtlessly pushed the Protestants underground and increased their tenacity, and the forward-looking, liberal Dutch merchants did not appreciate Charles' invasive persecution.
Charles enjoyed some successes and suffered some failures in the Netherlands. It can at least be said for him that he maintained relative stability2 throughout his reign, and managed to secure moneys for the rest of his Empire.