During the second half of the 1980s, Spain’s economy stagnated, with unemployment rates exceeding 20 percent, higher than any other major European country. Spain’s Socialist Workers’ Party (Partido Socialista Obrero Espanol–PSOE) swept to victory in the national elections of 1982, giving them an absolute majority in Spain’s Parliament, the Cortes, allowing them to introduce further liberal economic measures that previous weak governments could not implement. Felipe Gonzalez Marquez, the leader of the Socialist Party and prime minister, chose orthodox monetary and fiscal policies, wage austerity, and the reduction of wasteful state enterprises. The government’s policies began to bear fruit as the economy grew at the fastest rate in Western Europe again in the second half of the decade. Large manufacturers and financial institutions recorded profits, and inflation was controlled.
Spain’s 1986 admission to the European Community (EC) played a role in the government’s interest in reforming the economy. If the country were to benefit from EC membership, it would have to be able to compete with unrestricted foreign competition. The country’s financial institutions were undergoing a long process of consolidation and reorganization. Midway through 1989, the peseta was considered healthy enough for Spain to join the European Monetary System (EMS), which tied the peseta to the other EC currencies. Spain’s agricultural sector had also been modernized, and, given its Mediterranean climate, it was in a position to compete with the commercialized agriculture of other EU countries. By the late 1980s, the country had a per capita income of more than US$8,000, below the Western European average but high enough for Spanish consumption patterns to resemble those of other EC countries.
Below are some fabulous photos that show Spain the 1980s. Also check Spain in the 1960s and 1970s.
