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Spain's mixed capitalist economy, with a per capita GDP of 80% of the four leading western European economies, is quite impressive. The center-right government, headed by President AZNAR, successfully launched the European single currency (the euro) on 1 January 1999. The AZNAR administration, dedicated to liberalization, privatization, and deregulation of the economy, also introduced some tax reforms to promote economic growth. Consequently, unemployment fell steadily during AZNAR's administration, but still stands at 11.7%.
In 2003, despite the background of a faltering European economy, Spain experienced growth of 2.4% - which was satisfactory. However, the incoming President RODRIGUEZ ZAPATERO, whose party won the election following the Madrid train bombings, has plans to reduce government intervention in business activities, combat tax fraud, and support innovation, research and development. Unfortunately, RODRIGUEZ ZAPATERO also intends to reintroduce labor market regulations that had been scrapped during the previous administration.
Spain must successfully adjust to the monetary and economic policies needed to integrate into an economically integrated Europe. This challenge, alongside reducing unemployment, will be Spain's primary focus over the next few years.
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