Ercole II had followed with particular interest the emergence of an entrepreneurial class of Jewish origin in Portugal and Northern Europe. Indeed, following the widespread forced conversion of the Portuguese Jews in 1597, the "new Christians" (as the more or less forcedly baptised Jews now came to be known) were no longer subject to the laws which had previously limited their rights and economic activities.
Even from the beginning of the century the kings of Portugal had appointed a commercial representative in Antwerp to whom they entrusted the task of selling the entire range of spices and colonial items from the Portuguese empire. Around 1520 a consortium of (largely Jewish) Portuguese, and "christian" Italian merchants was formed in Antwerp. They bought out the entire harvest of spices and the Royal fleet transported it into Europe.
The Jewish Portuguese immigrants did not confine themselves to dealing with colonial products but also focussed on extra-fine woollen cloth from Flanders and the famous beautiful, brightly-coloured English kersey and French armentine. These fine textiles were exported to the Levant, and were traded for animal hides and Balkan leather, along with the famous zambellotti and other products from the Ottoman territory.
This trading network initially centred around Venice, but from the beginning of the 1530s the city of Ancona developed into a burgeoning trading centre frequented by Levantine merchants, mostly Jews of Iberian origin who had taken refuge in the territories of the Ottoman Empire.
Some (mainly Spanish) Jews from Ferrara did business in Ancona and played a part in the establishment, and in the development of this trans-European and trans-Adriatic trade network.
Right from the moment of his accession to power, Ercole II realised the economic importance of this enterprise, and took care to confirm the safe-conduct and commercial privileges that Ercole I had granted to the first Spanish Jews who sought refuge in Ferrara in 1492.
In 1538 Ercole II sent an ambassador to both Antwerp and London with the mission of inviting Portuguese merchants to come and settle in Ferrara. The duke guaranteed the newcomers the broadest religious freedom, and granted them permission to return openly to the Jewish faith, under protection from persecution. The duke's invitation stirred up enthusiasm amongst the new Portuguese Christians and had the effect of increasing clandestine emigration from the Iberian Peninsula towards Antwerp and thence to Ferrara. However, this incurred the wrath of Emperor Charles V, who, in his role as "Defender OF the Faith", looked disapprovingly on Ercole II's concessions to the Portuguese in Ferrara.
Charles V went so far as to create special police groups whose mission was to intercept these Portuguese immigrants en route to Ferrara and to seize their goods. The duke was fiercely opposed to this act of "piracy" by the Imperial police, and assigned a special envoy to convey his protest to the Imperial Court of Ratisbon.
Thanks to Ercole II's protection, a large proportion of the Portuguese from Antwerp and London were more than happy to relocate to Ferrara, to a country in which they could feel at home. They played a fundamental role in the economy of our city, they redirected a large proportion of trade between Northern Europe and the Levant along the new Flanders-Ferrara-Ancona-Ragusa route.
Thus, Ferrara became a privileged transit entrepôt where ultra-fine Eastern European textiles and Italian silk and woollen clothes were traded with hides, leather, cloth and raw materials from the Balkans, and later, with the spices which were once again flooding into Ferrara from the East, via the old camel train route which linked India with Aleppo and Alexandria.
The new Portuguese immigrants set up several commercial companies in partnership with the duke. In particular, around the Castello Nuovo in Ferrara an establishment for the production of woollen panina was set up on the banks of the river Po. It was manufactured in accordance with the modern industrial standards set by English and Flemish manufacturers. Thus our city's trademark scarlet and black textiles came to occupy an important place in the range of Western products destined for the Levantine merchants. In around 1555 the factory in Ferrara employed 700 people directly, and provided work for as many artisan outworkers who carried out various technical processes.
The Jewish merchants succeeded in transporting an (albeit limited) share of the sugar production from the Portuguese Atlantic islands to Ferrara. For some decades Ferrara, by now transformed by the duke into a merchant city was the principal, if not only, Italian centre for the supply and distribution of sugar products.