ocr: United under Ferdinand and Isabella in 1492, Spain became a dominant force: in Europe.. A long period of economic and political decline followed, however. By the mid-19th century, Spain lagged behind: many other European countries in stability and prosperity. 01874 Constitutional monarchy restored under Alfonso XII. la 1879 Spanish Socialist W orkers' Party (PSOE) founded. 01881 Trade unions legalized. a 1885 Death of. Alfonso XII. a 1898 Defeat in war with USA: results in loss of Cuba, Puerto Rico and the Philippines. 01909 Barcelona's "tragic week" of anti-clerical: riots. a 1914-1918 Spain ...