cy was created to reduce inflation, the public debt, the foreign debt, and unemployment. In this three-year period of change, authorities established the foundation for continued growth and prepared the Spanish economy for future entry into the European Economic Community, also known as EEC. With the final 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 created a great deal of employment because of a greater demand for labor relating to increased production and the increasingly elastic measures in the labor market. Unemployment decreased 4.2%, and this economic growth became Europe’s 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, Spain’s economy became so content and motivated that its domestic demand increased to an annual rate of almost three points above production. Their inability to keep up with the demand therefore led to another jump back to high inflation rates. This surplus in demand over the national production created a growth in foreign purchases and a rise in domestic prices. Because the policies of supply and demand, certain measures have been taken. These measures include the dropping of the growth of demand and increasing the possible expansion of the economy. Since then, and in all regard to need, monetary and fiscal poli...
