The Continental System attempted to strange Britain's economy but ended up hurting France more. Napoleon came very close to incorporating all of Europe into the system: by the 1807 Treaty of Tilsit, Russia and Prussia agreed to cooperate. In fact, Russia, Prussia, and Austria all officially declared war on Britain during this period.
Napoleon next tried to force Denmark and Portugal to join the system. Since Denmark contained ports crucial to British trade, the British Navy bombarded Copenhagen and attacked the Danish fleet in hopes of keeping this port open. British belligerence against the Danes, however, only made them more willing to cooperate with Napoleon.
Portugal, on the other hand, refused adamantly to join the Continental System. In 1807, Napoleon invaded the small Iberian country, forcing it to comply. The Portuguese royal family fled to Brazil, and the Portuguese people were discontented under Napoleonic domination.
Portugal's larger neighbor, Spain, had until 1807 avoided Napoleon's control. Though declining in stature as a world power, the Spanish remained proud. They remembered their great tradition of explorers, colonies, and visionary rulers like Ferdinand and Isabella. They had a rich culture and history, and the Napoleonic era was the time of several great Spanish painters such as Goya. When Napoleon manipulated the Bourbon king of Spain off the throne and installed his brother Joseph as king, an anti-French guerilla war broke out, called the Peninsular War. Britain, seizing the opportunity to place a few barbs in France's side, sent an army under the Duke of Wellington to aid the guerillas, called peninsulars. The fighting in Spain was bloody and protracted, and diverted precious French resources Napoleon would need elsewhere. Furthermore, the Peninsular War actually inflicted some defeats on the French Army, proving that they could be beaten, raising hopes among potential resistance movements in Germany and in Austria.
In September 1808, Napoleon held a meeting of all of his puppet kingdoms at Erfurt, Saxony. His main goal was to try and impress Alexander I, also at Erfurt, with the power and grandeur of the Napoleonic Empire. Napoleon was in the process of creating a Grand Duchy of Warsaw, which he knew would upset Alexander.
In April 1809, Austria rebelled against Napoleonic rule, announcing a "War of Liberation". No one joined them: the German princes were still fighting each other to impress Napoleon, and were not about to fight him. Fighting alone, renegade Austria was defeated at the Battle of Wagram. In October of that year, the Austrians made peace with the French again. Napoleon took some of northern Austria and added it to his new project, the creation of a Grand Duchy of Warsaw.