During the height of the European debt crisis in 2008, it was lumped into that derogatory acronym referring to the five EU member countries that were unable to refinance their government obligations or bail out their over-extended banks.
Along with the other so-called PIIGS (Portugal, Italy, Ireland and Greece), Spain spent the better half of the last decade just trying to keep its economic head above water, while dogpaddling through a deluge of spiraling inflation, mounting unemployment (which reached, at its peak, a staggering 26 percent) and stagnated growth.
But late last month, the International Monetary Fund (IMF) proclaimed that Spain has finally managed to find its way out of the deep end of the swirling whirlpool of mounting debt and negative growth and is expected to register a 3.3 percent spate in GDP this year, outperforming the overall European Union level.
So how did Spain manage this impressive economic turnaround?
To begin with, Spain, which constitutes the eurozone’s fourth-largest economy and which received an EU bailout in 2012, has since implemented a strict and realistic fiscal austerity program (are you listening, Greece?) that has included stringent cuts in wages, a proactive boost in exports and full compliance with Brussels’ no-nonsense regulations.
Under the center-right administration of Mariano Rajoy, government spending has also been culled significantly, lowering the country’s budget shortfall to a palatable 3 percent, in keeping with Brussels’ spending deficit ceiling for 2018.
The money the government does spend is being earmarked for economy-forward projects like job creation schemes (the unemployment rate is now the lowest it has been in eight years) and export promotions.
The tourism industry is also being given a boost up with government-sponsored international media campaigns.
With a decreased cost of living, Spain has become a favorite vacation destination for other Europeans, and the Rajoy administration is focusing on attracting high-end culture-minded tourists over the backpack set by organizing major artistic events.
Younger Spaniards, who have been the worst hit by the country’s unemployment, partly as a result of necessity and partly through government-sponsored startup programs, have ventured into new fields such as communications and hi-tech computers.
And even Spain’s most staid traditional brands are undergoing an innovation renaissance as they adapt to new markets and clientele.
Granted, the reinventing of the Spanish economy has taken a toll, particularly on blue-collar workers and low-income families.
But in the end, the belt-tightening has paid off.
The Spanish economy is now back on track, and shows no signs of slowing down any time in the near future.
If the Iberian nation was stuck in a swine hovel of economic contraction a decade ago, it is certainly out of that sty now.
Thérèse Margolis can be reached at [email protected].
