After the Fiesta: The Spanish Economy Meets the Global Financial Crisis

During the last decade and a half the Spanish economy has been one of the fastest growing and most successful economies in Europe. Immigration, low interest rates, and the liberalisation and modernisation of the Spanish economy all contributed to this spectacular performance. This success, however, came to a halt in 2007 and Spain is now suffering a painful economic recession. While the global economic crisis has been a significant contributing factor in this downturn, this article shows that domestic imbalances largely help account for the current economic problems. It examines the reasons for the crisis and analyses the government's response.