Austro-Italian ironclad arms race
Austria's defeat in the Seven Weeks War forced Austria to determine a new set of foreign and domestic policies for the future, as Austria's interests since the days of the Holy Roman Empire had primarily been found in Italy and Germany. The Empire thus reformed itself into the Austria-Hungarian Empire following the adoption of the Austro-Hungarian Compromise of 1867 (German: "Ausgleich"), which re-established the sovereignty of the Kingdom of Hungary and placed Hungarians within the Empire on an equal footing with Austrians. Under the "Ausgleich", Emperor Franz Joseph I would be crowned as King of Hungary, while a separate parliament at Pest with powers to enact laws for the lands of the Holy Crown of Hungary would be established.
Austro-Italian ironclad arms race
Meanwhile, Austria reformed itself into the Austro-Hungarian Empire in 1867 after losing the Seven Weeks War to Prussia. In the years following the Battle of Lissa, Wilhelm von Tegetthoff would oversee the construction of three additional ironclads and the rebuilding of a fourth. After Tegetthoff's death in 1871, the Austro-Hungarian Navy entered its own period of neglect, with just five additional ironclads being constructed in the ensuing thirteen years. Both navies engaged in further construction projects throughout the 1870s and early 1880s, but the arms race ended in the 1880s due the signing of the Triple Alliance between Italy, Austria-Hungary, and Germany in 1882 and the introduction of new technologies that led to the development of pre-dreadnought battleships. Despite their alliance, however, Italy and Austria-Hungary would engage in a second naval arms race centered around the construction of battleships at the turn of the century. This arms race would continue until the beginning of World War I.