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Economy of Spain
Spain inherited a fascist economy from Francisco Franco and firing was complex and expensive. Interventionism was widespread: basic products like bread and sugar had their prices fixed by the government. Large public firms controlled all sectors seen as strategic. Monopoly was common (e.g.: Telephone, tobacco, television, petrol, etc.). Shops had fixed opening and closing times and were not free to open all day, all week. Banking was controlled. Both passive and active interest rates were fixed by the government. All these rigidities and more lead to 10 years of industrial crisis (1975-1985), reduced convergence with Europe and expressed the need to modernize the economy and join the EC. Some moves away from these restrictions and controls, and large infrastructure projects in the 1960s resulted in strong economic growth in the so called "Spanish Miracle", but still left Spain lagging most of Western Europe, but ahead of the Warsaw Pact.
Spain's accession to the European Community, now European Union (EU), in January 1986 required the country to open its economy, modernize its industrial base, improve infrastructure, and revise economic legislation to conform to EU guidelines. In doing so, Spain increased GDP growth, reduced the public debt to GDP ratio, reduced unemployment from 23% to 10%, and reduced inflation to under 3%. The fundamental challenges remaining for Spain include reducing the public sector deficit, decreasing unemployment further, reforming labor laws and investment regulations, lowering inflation, and raising per capita GDP.
Following peak growth years in the late 1980s, the Spanish economy entered into recession in mid-1992. The economy recovered during the first Aznar administration (1996-2000), driven by a return of consumer confidence and increased private consumption, although growth has slowed in recent years. Unemployment remains a problem at 8.7% (December 2005), but this still represents a...
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