	Background

Due to the repressive regime of Spanish dictator General Francisco Franco, Spain was isolated from key developments elsewhere in Europe after World War II, such as the success of democracy, free market economics, and the establishment of the European Union and NATO. Economic reforms begun in the late Franco period were expanded and rapid economic growth ensued. Nevertheless, it should be noted that the United States and Spain have generally maintained good relations in the post-Franco period, whether under Socialist or right-of-center governments. Current Political and Economic Situation

The Socialist Party (PSOE), led by Prime Minister José Luis Rodríguez Zapatero, has governed Spain since 2004. Public debate over the war, and the misdeeds of Franco's dictatorship, had been muted for more than three decades in order to permit Spain to consolidate its democracy. Zapatero has said that he views military force as a "last resort" in the war on terrorism. Spain has also been eager to highlight its cooperation with the United States in fighting terrorism.
In the more than three decades since the death of Spanish dictator General Francisco Franco, Spain has become a mature democracy and has experienced rapid economic growth. It has also become an increasingly important player internationally, including in NATO and the European Union. The United States and Spain have generally enjoyed good relations. However, problems have arisen in recent years over such issues as the war in Iraq, promoting democracy in Latin America, and the tactics to be used in fighting the war on terrorism. This report provides information on Spain's current political and economic situation, its struggle against Islamist terrorism, and its relations with the United States. It will be updated as needed.