Half a century after Franco's death on 20 November 1975, Spain is a consolidated parliamentary democracy, a constitutional monarchy with King Felipe VI as head of state, and one of the most dynamic countries in the European Union. But it is also a politically divided country facing problems shared across southern Europe: low wages, expensive housing and struggling young people.
Politics
After the transition, for thirty years Spanish politics rested on alternation between two big parties: the socialist PSOE and the centre-right Partido Popular (PP) (see politics in Spain). The 2008 economic crisis fragmented the landscape, with the rise of new forces such as Podemos, later merged into the Sumar coalition, and the radical-right Vox, while Catalan and Basque nationalist parties have often become decisive in forming a government.
Socialist Pedro Sánchez has led the government since 2018, when a no-confidence motion brought down Mariano Rajoy's PP government. After the 2023 election, won on votes by Alberto Núñez Feijóo's PP but without a majority, Sánchez formed a coalition government with Sumar, backed by regional parties, at the cost of controversial concessions such as the amnesty for those responsible for Catalonia's 2017 independence bid. In a difficult parliament marked by judicial investigations and the failure of several bills, in October 2026 Sánchez called a snap general election for 29 November 2026, after Parliament rejected his housing measures.
The economy
In recent years the Spanish economy has grown faster than those of Germany, France and Italy: according to the INE, GDP rose by 2.8% in 2025. It is driven by tourism, with a record of almost 97 million foreign visitors in 2025, exports of services, investment in renewable energy, where Spain is among Europe's leaders in solar and wind, and a growing workforce thanks to immigration. Unemployment has fallen to its lowest level since 2008, but remains among the highest in Europe, around 10%, and very high among young people (see Spain's economy).
Housing and society
The most pressing problem is housing: rents and prices have soared, especially in Madrid, Barcelona, Valencia, Málaga and on the islands, driven by tourism, short-term lets and a shortage of new construction. Protests against overtourism and for the right to housing have become frequent, and many cities have restricted tourist flats. The population has passed 49 million, with over nine million people born abroad, mostly in Latin America and Morocco (see population). The birth rate is among the lowest in the world and life expectancy among the highest.
The challenges
Besides housing, the big challenges are the territorial question, with relations between the state and Catalonia and the Basque Country, climate change, which brings drought, heatwaves and floods such as the devastating one in Valencia in October 2024, which killed over 220 people, and turning growth into higher wages. For historical background see the history of Spain; for those planning to move, moving to Spain.