Why did Spain change from Peseta to the euro?
40 years ago, Spain began writing the most optimistic chapter of its history.On December 6, 1978 the Spanish people voted in favor of a democratic country that would uphold the values of the rule of law and equality.The foundation for Spain to become an integrated part of the European family was laid by our support for the constitution.
Section 38 of the constitution states that free enterprise is recognised within the framework of a market economy and that the public authorities guarantee its exercise.Spain would align itself with the western model of parliamentary democracy based on a market economy and free competition and underpinned by the social rule of law.In 1986 Spain would join the European Economic Community after more than a year of negotiations.
This was not an easy road to follow.The first years of our democracy were marked by economic difficulties due to the international crises linked to sharp oil price increases and the lack of an anchor for inflation expectations in most developed countries.
This new Spain, democratic and integrated into Europe, never stopped looking.Trade and financial flows and the movement of capital increased, and exports and imports increased as well.
Without a society that was convinced that Europe represented prosperity and the future, these steps wouldn't have been possible.The pro-European nature of civil society united Spaniards more strongly than their ideologies or political affiliations, and this sentiment has held firm despite the difficulties people experienced during the financial crisis.
A recent survey by the Elcano Royal Institute shows that eight out of ten Spaniards think that opening up markets gives Spanish businesses good opportunities.Spain benefits from the European Union and the Economic and Monetary Union created by the euro area in particular.
One year before Spain joined the EU, the annual growth in per capita income was only 0.7%, well below the 1.8% enjoyed by the countries that would go on to form the euro area.Before the euro was introduced, Spain's per capita income grew at a faster rate than the average for future euro area countries.
The euro's arrival had a positive effect on growth despite the difficulties during the crisis.GDP per capita has been growing at a higher rate than the other euro area countries since 1999 and is much higher than during the early years of our democracy.
Some people have tried to blame the euro for the financial crisis in Spain and have advocated control over monetary policy interest rates and exchange rates.Being a member of the euro area enables Spanish households and businesses to benefit from lower real interest rates, lower inflation rates and reduced macroeconomic volatility, all of which boost productive investments and make a vital contribution to thesustainability of public finances.
Structural currency devaluations do not solve economic crises.Devaluations are not long-term measures.The higher inflation they cause erodes the competitive boost they provide.In a complex system of global production chains like the one we have today, devaluations can make it harder for businesses to plan.Spain's credibility in a global context is strengthened by the fact that the euro is the second most important currency in the international monetary system.
European countries have carried out substantial reforms despite the fact that the monetary union has significant institutional flaws.One of the greatest achievements of European integration is the banking union.Risk that crosses national borders can now be identified thanks to the supervision of banks at the European level.Setting up a European deposit insurance scheme should be a priority for national governments.
Spain is a more prosperous and modern country if we look back 40 years.We must not forget that a lot is still to be done.More than 3 million people are still out of work and the youth unemployment rate is still high.There are reasons for optimism.
Over the last five years, Spain has grown at an annual rate of 2.8%, well above the European average.Spurred by the need to search for new markets during the years in which domestic demand tightened, Spanish businesses have been able to find opportunities overseas and are now global leaders in their sectors.
While remaining true to its commitment to Europe, Spanish society has worked very hard to return to economic growth after almost a decade marked by the crisis.40 years ago, the Spanish people voted for a better country that was open and modern.The process of European integration has allowed us to make this a better country.
The related topic tags are only available for selected content.