Spain isn’t just “doing okay” while the rest of Europe nurses a hangover — it’s Europe’s outlier in a good way. Since early 2024, Spain has been growing at roughly three percent a year while the eurozone plods along near one. Credit markets noticed: S&P bumped the sovereign in mid-September, and within days Moody’s and Fitch followed suit. When all three ratings agencies are suddenly in a good mood about you, it’s usually because the story is real, not vibes.
The growth mix isn’t mysterious:
- People: Spain opened the door while others slammed it. Net immigration has averaged around six hundred thousand a year since 2022, mostly working-age and heavily Latin American — which makes integration faster (language, culture, networks). That’s not a talking point; that’s the math. It’s also a big reason employment has hit records and consumer demand is sturdy.
- Power: Cheap, abundant renewables have turned Spain from a sunny tourist postcard into an energy-cost arbitrage play for industry and data-heavy services. In 2024, renewables supplied a record ~56% of electricity, and year-to-date 2025 has pushed higher. That lowers input costs and draws capital. (The grid, yes, needs beefing up after the April outage — and investments are now flowing.)
- Policy follow-through: NGEU funds have been deployed into real stuff (infrastructure, modernization), and earlier labor reforms tightened up job stability. Brussels’ baseline: Spain can still clock around 2.6% growth in 2025 — in Europe, that’s sprinting.
Now for the adult supervision: per-capita gains lag headline GDP, productivity is still yawning, and unemployment — although falling to around 10% — remains among the eurozone’s highest. The fix isn’t a new slogan; it’s a pipeline: streamline rules, crowd in long-term risk capital, and upskill into higher-value services (IT, finance, engineering). That’s where you turn an immigration-led demand pop into durable per-capita prosperity.
How Madrid plays its power in Europe
Spain’s “soft power” used to be sunshine and tapas. Today it’s growth, grid, and people — a combination that gives Madrid surprising clout in EU tables where sluggish peers need a positive outlier. The message Spain quietly sends in Brussels: we can cut emissions, grow faster than you, and do it without slamming the door on newcomers. That lets Spain lean into:
- Energy bargaining: With wind/solar scaling and interconnectors improving, Spain can punch above its weight in talks about EU power markets, grids, and decarbonization timelines. The subtext is “we’ve shown this can work — now fund the pipes.”
- Fiscal credibility: Upgrades from S&P/Moody’s/Fitch improve borrowing optics just as Europe re-tightens fiscal rules. That buys room to keep investing while others cut.
- Migration realism: While some capitals grandstand at the border, Spain’s labor-market-first posture is adding capacity exactly where Europe is short. That makes Madrid the practical voice when migration inevitably returns to the EU agenda.
What could blow this up? Politics and housing. Sánchez governs with dental floss; big reforms are a knife fight. And if rents keep outrunning wages and public services stay tight, tolerance for high inflows could fray — fast. The economic story is strong; the social license needs maintenance.
The scoreboard (for the macro geeks)
- 2025 growth: Bank of Spain and the European Commission are in the ~2.6% camp; the government’s latest revision is a hair higher after a better-than-expected Q2. Either way, Spain is still outrunning the bloc.
- Labor: Unemployment near 10.3%, lowest since 2008 but still elevated versus EU peers. Youth unemployment remains sticky.
- Energy: 56% renewables in 2024, roughly ~59% so far in 2025 — with grid investment pledged after the spring blackout.
Catalonia: where things actually stand
Madrid bet on de-escalation and legal normalization. The Amnesty Law for the 2017 independence cases passed and, crucially, Spain’s Constitutional Court upheld it on June 26, 2025. Application is case-by-case: many have already benefited, while high-profile figures like Puigdemont are still working through the process. Politics, not prisons, now dominates.
On public sentiment, support for independence has eased off its highs, bobbing around ~38–40% in 2025 surveys, with the Socialists (PSC) leading regionally and pro-independence parties recalibrating. Translation: the temperature is lower, the question isn’t “UDI tomorrow” but “what’s the next workable status that keeps growth and dignity intact?”
Bottom line: Spain’s edge right now is a rare mix — demographic momentum, green electrons, and steady EU cash channeled into the real economy. If the ruling class can keep the coalition intact, scale skills faster than rents, and turn grid upgrades into a 2030 powerhouse, Spain’s “quiet flex” becomes structural. If not, it risks being remembered as a great run of form that never quite converted to per-capita lift. I’m betting the former — but only if they keep treating immigration as an asset and productivity as the main event.
Mike McCready 