“During the period from 2000-2007, the Spanish economy was booming. Alongside the “Irish Tiger”, the Spanish economy grew rapidly; it was admired for its liberalisation processes, its new openness to international markets, and for its new emerging global players such as Telefónica, Ferrovial and Banco Santander. US President Barack Obama’s Transport Secretary visited Spain to see the impressive new high speed train lines. In 2007 unemployment was at its lowest since the transition to democracy, even after the country had absorbed more than 4 million economic immigrants in the preceding decade. The housing market was highly dynamic and prices surged. After having surpassed Italy in GDP per capita terms in 2007, the then prime minister J.L Rodriguez Zapatero felt so confident that he announced Spain would soon surpass France as well.
However, the social picture was less favourable. Real wages had increased very little since Spain joined the EU, while the share of wages in GDP had decreased. Expenditure on social services such as education and health was well below many other European countries. The overall distribution of income was more unequal and the risk of poverty higher than in the rest of EU15. The so-called “Spanish economic miracle”, as we will see, was based on very shaky foundations. So, when the global financial and economic crisis erupted in 2008, the Spanish economy’s house of cards collapsed.”