While Louis was staying in Spain, the Duchy of Parma had been occupied by French troops in 1796. Napoleon Bonaparte, who had conquered most of Italy and wanted to gain Spain as an ally against England, proposed to compensate the House of Bourbon for their loss of the Duchy of Parma with the Kingdom of Etruria, a new state that he created from the Grand Duchy of Tuscany. This was agreed upon in the Treaty of Aranjuez.
