Financial Integration and Economic Reforms: What Can Emerging Markets learn from the Case of Spain?

Since the 19th century, the obsession of Spanish reformists has been to make up the lost ground with modernized countries. This paper examines the integration experience of Spain in the European Union in order to study how integration has affected the country's economic development and economic performance. It examines the relationship between regional integration, economic growth, and economic reforms in this country, and draws some lessons based on its EU integration experience. In particular it looks at the impact of European Monetary Union (EMU) integration in the Spanish economy. While the overall benefits of EMU membership are undeniable, contrary to expectations it has not led to a process of deep economic structural reforms that would have fostered the development of an economic growth model based on value added and productivity. The examination of the Spanish case will show that the process of economic reforms has to be a domestic process led by domestic actors willing to carry them out. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]