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.