The Reconquista, which finally ended in 1492, marked the end of a long period of Spanish history. After 1492, Spain focused on the consolidation of its conquests, expansion in the New World, and involvement with the Habsburgs as a European power.
After the conquest of Granada in 1492, the Muslims were treated harshly. They rebelled against Spain and were defeated again. The Muslims were given a choice: conversion to Catholicism or expulsion from Spain.
Spain matched France as the greatest power in Europe after 1492. Spanish infantry were unbeatable. Spain pressed its claim to land in the Pyrenees and Italy.
Christopher Columbus sailed in the same year, and his exploration led to the creation of a vast Spanish empire throughout the Americas. Spain acquired huge amounts of gold and silver from the Americas. The Indians of the New World suffered greatly under Spanish rule, and the gold and silver from the Americas caused severe inflation in Spain.
Spain remained a poor country in spite of this wealth in gold and silver. Spanish nobles were not adept at commerce. Spain's inability to develop its economy meant that it would eventually fall behind both France and Britain.
By the early sixteenth century, Spain was a Habsburg dominion. This linked it to central European affairs. The country was often bogged down in expensive wars.
It really is impressive how quickly the social, economic, and political landscape in Spain changed after the Reconquista. For nearly 800 years prior to the end of the Reconquista, the Iberian Peninsula had been a diverse if fractured region. With the final expulsion of the Muslims in 1491 and the signing of the Alhambra Decree the following year, Spain became almost entirely a nation of Catholics. Any non-Catholic who wished to stay in Spain was required to convert. This ended centuries of multi-culturalism and religious diversity that had characterized the region throughout most of the middle ages. The Christianization of Spain did not happen overnight though. This was the culmination of a long process in which Christian rulers would repopulate areas abandoned by Muslims with their own Christian subjects. Once the Reconquista was complete though, they were able to re-Christianize wholesale.
Politically, Spain became unified as well. Throughout the long process of reconquest, various Christian rulers would gain control of regions of Spain. Their various priorities and alliances often led to infighting among Christians. Once the Reconquista was completed and Spain unified politically under the rule of Queen Isabella and King Ferdinand, Spain came under the single political unit of their rule. This led to a stability that the nation had never seen before.
With this stability came economic gains. Spain was able to concentrate resources towards exploration and global trade. In 1491, Spain was facing a serious economic crisis brought on by years of war. Expelling the Jews and Moors and confiscating their property was one attempt to mitigate this crisis. However, the colonization of the Americas is what really made Spain a wealthy world power. By being the first European power to colonize much of the New World, the Spanish Crown became incredibly wealthy. Vast amounts of American gold, silver, and crops flooded into Spain. The new foods, such as potatoes and corn, caused a population boom. The vast amount of precious metals from the Americas were used to fund navies and armies and make Spain a true rival in the European struggle for dominance over the next several centuries.
https://research-repository.st-andrews.ac.uk/bitstream/handle/10023/10769/SPANISH_RECONQUEST.pdf?sequence=1&isAllowed=y
The Reconquista, which concluded in 1492, had far-reaching implications for the culture, economy, and government of Spain. Socially, the expulsion of Muslims and Jews from Spain created a unified and homogeneous population under a Catholic monarchy. With the marriage of Ferdinand and Isabella, Spain experienced political stability that allowed it to reach new heights. The unity that was felt after the Reconquista led to unbridled expansion by Spain, beginning with the voyages of Christopher Columbus to the New World. Within a half of a century, Spain's colonial holdings in the Americas were expansive and prosperous. The gold and silver acquired through the Spanish colonies enriched Spain to the point that they were the wealthiest nation in Europe. This wealth was used to build a large fleet of warships known as the Spanish Armada. This economic and military dominance became the envy of the Western world during the 16th Century.
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