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France has been keeping a very close eye on Spain’s economy, and not just out of neighbourly curiosity. With growth running at roughly three times the French rate, Spain has become the subject of glowing headlines and serious debate across the border.

 

French media have gone as far as calling it the “Iberian economic miracle”, a phrase that keeps popping up in analysis pieces and opinion columns.

 

According to France Info, the big question now being asked is what exactly Spain is doing right that has France dreaming of similar results. Meanwhile Le Nouvel Obs has described Spain as the “lighthouse economy of Europe”, suggesting it is setting the pace for others to follow.

 

Economists Cecilia García-Peñalosa and Alain Trannoy recently laid out their thoughts in Le Monde, pointing out that Spain, once one of the countries hit hardest by the 2008 financial crisis, has managed to achieve growth levels that comfortably outstrip France’s.

 

It’s quite a turnaround for a country that was not so long ago battling sky high unemployment and deep recession.

 

Part of the contrast comes down to political stability and economic direction. France has seen several changes of prime minister over the past year and has only just approved its latest budget. Spain, on the other hand, has been rolling over its budget since 2023, yet that hasn’t stopped the economy pushing ahead.

 

Claudia Ramírez, an economist at the Organisation for Economic Co-operation and Development, explained that Spain’s growth rate sits well above the eurozone average. She pointed out that strong household consumption and solid private investment have been key drivers behind the numbers.

 

Experts broadly agree that a series of reforms have played a major role. The 2021 labour market reform is frequently highlighted as a turning point, aimed at reducing temporary contracts and improving job stability.

 

Spain’s heavy investment in renewable energy has also strengthened its energy independence at a time when supply shocks have rattled much of Europe. On top of that, the integration of immigrants into the labour market has boosted both the workforce and overall demand.

 

Across the Pyrenees, policymakers are clearly taking note. Whether France can replicate Spain’s formula remains to be seen, but one thing is certain, Spain’s economic performance is no longer flying under the radar.

 

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