Spain’s Political and Economic Evolution: From Crisis to EU Integration

Spain’s Political and Economic Trajectory

The PSOE and Governance (1993-1996)

In the 1993 general elections, the PSOE secured its fourth victory, but required consensus with other political forces. Governance was facilitated by support from nationalist Jordi Pujol. The PSOE lost the 1996 general elections—their first defeat since 1982. However, the Popular Party’s victory was narrow, and its leader, José María Aznar, faced significant challenges.

The Aznar Government and Economic Recovery (1996-2000)

Aznar’s government initially appeared vulnerable. However, the economic boom and successful measures against unemployment gradually strengthened its position. Unemployment figures decreased considerably year after year.

The 2000 General Election and Social Issues

Following Felipe González’s resignation as Secretary General, internal problems within the Socialist Party led to a comfortable majority for the People’s Party in the 2000 general election. This election saw gains for the Coalición Canaria (CC), the Galician Nationalist Bloc (BNG), and the Andalusian Party (PA). Izquierda Unida (IU) suffered a setback, its representation reduced to eight deputies.

Spain continued to grapple with social issues, including ETA terrorism, unemployment, declining birth rates, domestic violence, and immigration. The low birth rates, among the world’s lowest, contributed to an aging population, necessitating pronatalist policies. A law to protect women was implemented to address domestic violence. Spain transitioned from being a migrant-sending country to a recipient of economic migrants.

Economic Evolution: From Crisis to Growth

The 1970s and 1980s

The Spanish economy faced a deep crisis during the transition from the 1970s to the 1980s. The first socialist government took urgent action, albeit at a high cost. The government’s economic adjustment impacted the industrial sector, leading to substantial public investments and increased social spending. High costs associated with expanding services like universal public health, economic benefits, and subsidies further strained the economy. However, the favorable international economic climate of the late 1980s facilitated above-average economic growth for Spain.

The 1990s and Beyond

The crisis of the 1990s brought an increased tax burden, pension cuts, and labor market flexibility. These measures disrupted “social peace,” leading to union-organized strikes on December 14, 1988. In 1992, Spain’s ability to meet the convergence criteria for joining the Eurozone seemed uncertain. However, after the March 1996 elections, the neoliberal policies of Aznar’s government proved fruitful, and Spain successfully integrated into the Eurozone.

The Welfare State and Foreign Policy

The welfare state aims to maintain the population’s economic well-being and guarantee essential services like healthcare, education, infrastructure, unemployment benefits, and pensions. Spain’s welfare state development began later than other European countries, expanding significantly under Felipe González to achieve parity with its European neighbors. The Aznar administration continued these efforts, supported by the EU, creating a robust public service structure, particularly in healthcare (social security), education (LOGSE), and transportation.

In foreign policy, Spain prioritized normalizing diplomatic relations, applying for EEC membership (as previous political obstacles had diminished), and engaging with NATO, a key element of US Cold War policy. NATO membership was contentious for leftist parties and segments of society. The Socialist Party adopted an ambiguous stance, leaving room for maneuver if they came to power.

In 1985, Felipe González’s PSOE government signed the Treaty of Accession to the European Communities and held the promised referendum, fully integrating Spain into the Western bloc. The “common market” extended beyond trade, encompassing political homogeneity within the democratic system. Earlier, only preferential agreements were possible due to concerns about Spain’s political freedoms. The Suárez and Calvo Sotelo governments had prepared for EEC application, but faced challenges related to Spain’s economic structure and internal community issues. Support from Germany and France under Felipe González’s government paved the way for successful negotiations.