Spain’s Economic Boom & Social Changes in the Late 1980s
Elections in 1986
Once Spain was accepted into the European market, foreign investment pushed the economy, lowering unemployment. Due to the debate about NATO, the PSOE lost votes but still held 184 seats. The right-wing party, led by Manuel Fraga, combined with other so-called popular coalition forces, obtaining 105 seats.
After a long crisis, the PNV expelled Carlos Garaikoetxea and his followers, who would soon form the Eusko Alkartasuna party. Jose Antonio Ardanza called for regional elections in 1986, increasing the popularity of the PSOE, which had the highest number of MPs. A PNV-PSOE pact was formed, distributing portfolios and initiating a period of cohabitation.
However, a strike by secondary school and university students arose after the government implemented controversial policies. The younger generation took to the streets, demanding a new educational policy. Initially, they complained about the curriculum, and then about the massification of universities and the degradation of education. Barcelona, Madrid, and other cities witnessed demonstrations, during which there were detainees but no injuries. Consequently, the government decided to negotiate, announcing free secondary and vocational education while expanding college scholarships.
Foreign Investment and Economic Improvement
Spain experienced a period of prosperity. Tourism receipts increased, and banking, savings, and investment reached new heights, allowing businesses to expand their profits. With the introduction of VAT, the deficit was reduced, leading to broad public consumption.
However, real estate prices increased, and the government could not offer low-cost housing. The stability of the peseta and its entry into the European Monetary System placed it among the top three currencies of countries with the most significant growth in just two years.
The Concentration of Business and Capitalism
These were driven by economic growth and the need to compete internationally. Banco Bilbao announced its merger with Banesto, but it did not take root. However, Banco Vizcaya later joined Banco Central and Banco Hispano.
Changing social attitudes toward money emerged as entrepreneurs and bankers showcased their economic power in search of social and political recognition. Many citizens perceived that much of this money was the result of speculation and business operations whose success was not due to their execution but to the handling of privileged information and good relations with those in power.
Social Expenditure
Prosperity allowed for the consolidation of the welfare state. In 1985, one million people received unemployment benefits; a year later, that number rose to 1.5 million. Non-contributory pensions were introduced, and the number of pensioners reached about seven million. However, the state could not reach the entire population. Additionally, a new class of young people emerged who wanted to work but had to be supported by their parents.
On the other hand, the state aimed to improve health and education, enacting the General Law of Health. It also sought to improve communications infrastructure, including the network of motorways and expressways, in preparation for the Universal Exhibition in Seville. A high-speed train was introduced, and Barcelona underwent remodeling for the 1992 Olympic Games.
Union Opposition
In 1987, Nicolas Redondo rejected the government’s economic policies and resigned, claiming that Felipe Gonzalez did not represent a real project. Subsequently, the UGT and CCOO joined in criticizing the PSOE for not fulfilling its promises.
The government’s intransigence regarding wages and the youth employment plan led the two trade unions to call for a general strike. This would paralyze the country but did not prevent the PSOE from winning the general election. Since then, the unions and the government have become further alienated. Another general strike was promoted by the UGT and CCOO against the government, with the unions prevailing.