Austro-Italian ironclad arms race
Seizing upon the decline of the Regia Marina in the years immediately after the Battle of Lissa, Tegetthoff worked to continue the efforts of Archduke Ferdinand Max of expanding the ironclad fleet of the now Austro-Hungarian Navy. Tegetthoff found political allies in the Austro-Hungarian Minister of War Carl von Franck and retired Admiral Bernhard von Wüllerstorf-Urbair. Wüllerstorf's and Franck's primary arguments in favor of continuing with the ironclad program Austria had engaged in prior to the Seven Weeks War lay largely along economic grounds. The two believed that constructing new ironclad warships would rejuvenate Austria-Hungary's economy following the defeat at the hands of Prussia and Italy, and that such a fleet would help to open up new commercial opportunities in the Levant and the Middle East. These proposals would be shelved however while Austria continued to reel from the military defeats inflicted by Prussia, and several cabinet reshufflings by Emperor Franz Joseph I resulted in a government more interested in pursuing revenge against Prussia than constructing new ironclads, which would be of little use in a hypothetical second war with Prussia.
Silesian Wars
In January 1762, however, Austria was suddenly abandoned by its chief ally upon the death of Empress Elizabeth of Russia. She was succeeded by the ardently pro-Prussian Peter III of Russia, who immediately recalled his armies from Berlin and Pomerania and made peace with Prussia. Peter was himself overthrown and assassinated that summer, but by then the war had again shifted in Prussia's favor. Both sides were nearing exhaustion, and peace talks to end the wider Seven Years' War began in late 1762. In the end, negotiators agreed on a return to "status quo ante bellum", confirming Prussia's control of Silesia in the February 1763 Treaty of Hubertusburg. Prussia also committed to support the election of Maria Theresa's son, Archduke Joseph, as Holy Roman Emperor.