The Spanish economy: From the single market to EMU

Abstract

Between the establishment of the Single Market in 1993 and the end of the first year of EMU membership in 1999, the Spanish economy emerged from one of the deepest recessions in the European Union to become one of the fastest growing economies. Technological change, further liberalization and globalization drove economic restructuring. Deeper European integration and further regional devolution blurred the role of the state in managing the economy. Inside the domestic economy, the trend continued towards an increasing dependence on services. Economic development, as in the past, was geographically uneven. New mega‐corporations emerged as powerful poles of economic and political power. A new dynamic from within society became more visible, that of shrinking birth rates and demographic ageing. Externally, there was a surge in foreign direct investment in Latin America, creating an architecture of globalization that was asymmetric: focused on the European Union and a new Iberian cultural realm embracing the Iberian peninsula and Latin America. In this ‘new economy’ with permeable boundaries, domestic economic development and foreign policy were inextricably linked.