te the economic situation for Spain from 1975 to 1982, the Gross Domestic Product grew by an average rate of 1.5%, while the gross formation of capital decreased by an average rate of 2.5%. Spain political situation was revolutionized when the first socialist government took over in 1982. These unfortunate new leaders were handed down high inflation rates (14%), low growth rates, a deficit in the balance of payments on current account of an eye-popping four billions dollars, as well as a public deficit of almost 6% of the GDP, and all the while housing a high and growing rate of unemployment. In response to this, a gradual adjustment policy was created to reduce inflation, the foreign debt, the public debt, and unemployment. In this three-year period of adjustment, authorities established the basis for sustained growth and prepared the Spanish economy for future entry into the European Economic Community (EEC). With the eventual fall of international prices, primarily oil, money and the dollar, the international economy in general, and the economies of the industrialized countries and of Spain in particular, the country entered a favorable state of expanding growth. On January 1, 1986, Spain finally ascended to the EEC. From 1986-1990, the Spanish economy received an unprecedented financial growth after joining the EEC. This economic expansion generated a great deal of employment, due to a greater demand for labor relating to increased production and the increasingly flexible measures in the labor market. Unemployment decreased to 4.2%, and this economic growth became Europes most rapid through these five years, and the public deficit decreased along with the rate of inflation. The gross formation of capital increased to an annual average rate of 14.1%, which doubled the average growth of investment in the OECD countries during this period. From 1985-1989, the gross formation of capital grew from 19% to 26% of the GDP. However, Spains e...
