Afonso, upon abdicating the throne of Portugal, is banished to Terceira Island in the Azores and his brother, who had married Marie-Francoise, assumes the regency of the throne until Afonso's death in 1683, after which he will rule in his own right as Pedro II until 1706.

During his regency, Pedro had given the task of producing a coherent economic policy to Luis de Menenses, count of Ericeira, who had been appointed head of the treasury.

Known as the "Portuguese Colbert," Ericeira has implemented mercantilist policies in Portugal similar to those of France.

These policies seek to protect Portuguese industries against foreign competition.

He publishes laws to enforce sobriety and criticizes luxury.

Ericeira organizes the textile industry and imports looms from England.

He stimulates the national production of wool and silk by decreeing that only Portuguese woolens and silks can be worn.