MADRID – July will enter Spanish history as having started on a tremendous high, spurred by Spain’s recent triumph in the 2012 Euro Soccer Championship. But all signs indicate that the month will end in doubt and pessimism. The image of joyful crowds and Spanish flags draped from cars and windows has given way to that of throngs of demonstrators holding banners protesting the government’s latest austerity measures. With one in four Spaniards unemployed and Spain’s sovereign bonds rated just above junk status, Spain seems to be on the edge of falling into the abyss.
But very few analyses delve beneath the surface of immediate figures and assess the core of Spain’s strengths and weaknesses. Observers today tend to forget that, until the early 1980’s, Spain qualified as a developing country, according to World Bank standards. Indeed, together with Singapore and Ireland, Spain represents the biggest economic success story of the last quarter of the twentieth century. And it should not be forgotten that, together with an astounding leap in GDP per capita (from $7,284 in 1980 to over $30,000 in 2010), Spain, under King Juan Carlos’s invaluable leadership, carried out a successful transition to democracy and joined the European Union.