Spain: history, culture, and geography

Spain

The modern history of Spain's economy began with the end of Franco's reign in 1975. Since that time, Spain has embarked on a long modernization process that has resulted in the country becoming the world's 8th largest economy, and 5th largest in Europe. The nation's progress accelerated rapidly, beginning with its ascension to the European Union in 1986. By 1999, Spain was in the lead group in terms of euro adoption. While the company's economy has seen some short-term slowdown in the recent years, the banking system is well-equipped to whether the liquidity crisis due to high reserve requirements. However, unemployment has risen sharply and is expected to continue to rise, bringing about concern for Spain's long-term economic growth prospects (the Economist, 2009)

This paper will examine Spain's ascension to the EU and to world prominence from an economic perspective. The paper will begin with a brief explanation of economics and its role in the study of international relations. Then, an examination of Spain's economic integration into the EU will be conducted. It will be demonstrated that Spain's rise to prominence in the European Union has been driven by its successful economic integration with Europe in the decades following the downfall of the Franco dictatorship.

Economics and International Relations

Economics is the discipline of studying the ways in which economic actors interact. Economic actors range from simple units such as individuals to large, complex entities such as nations. With the possible exception of national security, economics is the most important determinant of international relations. Global trade provides nations an opportunity not only to enhance their wealth but also their political power. This is because the same underlying principles that drive economic power (control of valuable resources) control political power as well. The two types of power therefore share an inexorable relationship.

The nature of this relationship demands that the field of economics play an important role in the study of international relations. At the end of the Franco regime, Spain was economically and politically weak. The country's rise to political power has coincided with its rise as an economic power. This growth was facilitated by Spain's entry into the European Union and the European economic system.

The Economics of Spain's Ascension to the EU

At the time that Spain entered the EU, the economy was still underdeveloped. Unemployment was around 23%, all strategic industries were controlled by the government, and infrastructure was poor. Ascension to the EU forced Spain's leadership to adopt European-style business policies. Spain adopted Europe's trade agreements, taxes, and policies regarding fisheries and agriculture. Economic integration was essential forced upon Spain as a result of EU membership, making it the highest priority (Royo, 2006).

Since entering the EU, Spain's reforms were more rapid. The country now stands with a GDP almost equal to those of the largest European economies. Spain's economy grew rapidly from 1994 to 2008, including an eleven-year string of 3%+ growth (CIA World Factbook, 2009).

With Spain's ascension into the EU and subsequent rapid economic growth, the country became more powerful. Spain was able to have significant influence in many matters of significant Spanish concern. These included policies with respect to fisheries, relations with Latin America, agriculture. Spain has pushed for institutional reforms and a larger EU budget. While the early years were characterized by a strong focus on internal matters relating to integration, this process can be seen to have culminated in Spain's adoption of the euro. From that point, Spain has become an agent of change, and one of the main drivers of the EU economic agenda (Gillespie & Young, 2001).

Spain's economic transition contributes to our understanding of Spain as a country and as an actor in the international system. Reformists in Spain have long worked towards bringing the country's economy in line with the rest of Europe, since the late 19th century (Royo, 2006). The Franco regime resulted in stunted economic growth. After decades under such rule, Spain was enthusiastic to modernize its economy. A former world power, Spain had fallen by the wayside economically and politically during the 20th century. The relationships that the nation had established with Latin America had become relatively meaningless, and Spain was considered a backwater within Europe. Even before the fall of Franco, steps were taken to open the economy. After the fall of Franco the pace of reforms accelerated further. But ascension into the EU provided Spain with the impetus to make bold reforms, and it was these that allowed for the recent long-term run of strong growth.

Much of Spain's economic renaissance can be attributed to a desire among the Spanish to restore the nation to prominence. It was not without difficulty that Spanish leadership undertook the aggressive reforms that followed EU ascendancy. There were high social costs in the short-term, but the nation's leadership was committed to restoring Spain as a major European power. After a generation of aggressive reforms, this restoration has occurred. Now, with Spain's economic might restored, its political power has returned. Spain is now in a position to drive the EU agenda on many issues, and it has exercised that privilege.

Conclusion

Spain's expanded role in the international system relates directly to its economic renaissance. Few world powers gave the Spanish more than cursory consideration when the nation was poor and dependent on agriculture and fishing. Now, with a strong and diversified economy, Spain has returned to prominence in the world. The Spanish are restoring their historical influence in Latin America and in Europe. They have gained a seat at the table when the world's leaders meet.