Rahn: Spain was one of the first nation-states, having completed the reconquest of the Iberian Peninsula from the Islamic Moors in 1492 (the same year as the first Columbus voyage).

I hardly consider Spain to be "one of the first nation-states". It is certainly preceded by England, Scotland, Wales, France*, Hungary and Poland in this respect. Moreover, it is unclear whether a Spanish nation actually existed in 1492.

*At least the state aspect.

Rahn: Imperial Spain was Europe's leading power during the 16th and much of the 17th century. The Spanish empire included all of central America, most of South America, the Philippines, and parts of modern Germany, Belgium, Luxembourg, the Netherlands, and elsewhere.

Imperial Spain was a major threat to the values that shaped the West as it is currently known, namely Protestantism, republicanism, liberalism and democracy, and those countries which in the main incubated these values: England, Scotland, the Netherlands, Flanders, France, Germany and Italy. Moreover, Spain devastated the Amerindian peoples of the Americas and the Malays of the Philippine islands among others.

Rahn: Despite being citizens of one of the oldest nation-states, many Spanish identify more with their regions than the central state. Spain has four official languages — Castilian Spanish, Catalan, Galician and Basque, as well as several unofficial languages.

Italy and France have similar issues, perhaps due to the legacy of the collision between Teuton and Roman.

Rahn: Spain, unlike most countries, has become increasingly decentralized during the last few decades, with the central government shrinking relative to the regional governments. A small central government, with most government activities conducted at the regional and local level, can work just fine, as it has been the case in Switzerland for the last several hundred years, provided there is a national consensus as to how the power is to be shared. But this consensus has not yet occurred in Spain.

Not surprising: decentralisation and regionalism are thorny issues in Latin American politics.

Rahn: The open questions for Spain are: Will it return to the high-growth policies of the Aznar years and increase economic freedom or adopt more statist and growth-killing policies? And will it move toward constructive decentralization with regional and language tolerance, as it has been successfully done in Switzerland, or will the struggles over regional power (and language) paralyze the country as it is now happening in Belgium?

Unfortunately, economic issues must be subordinated to ethno-racial ones in Western Europe. Ethnic and religious tensions were ignored in Lebanon as economic development surged ahead. Though this provided increased wealth and income for the Lebanese, seemingly antiquated allegiances proved more powerful than rational economic self-interest. Needless to say, sharpshooters, bombs and tank shells did not improve the property values in the once thriving capital. If Western Europe's demographic and national crises are not resolved, it may bomb itself back to the stone age.

Richard Rahn and the Brussels Journal are to be congratulated for publishing this thoughtful backgrounder. With regular columns by Paul Belien and John Laughland, the Brussels Journal is becoming a world-class journalistic enterprise. Keep up the good work!

Here is an 'European Version' of the text:
Spain completed the reconquest of its part of the Iberian Peninsula from the Islamic Moors in 1492, the same year Vasco da Gama sailed to India. Imperial Spain was Europe's leading power during the 16th and much of the 17th century. The Spanish Habsburg empire included all of central America, most of South America, the Philippines, and parts of modern Germany, Belgium, Luxembourg, the Netherlands, and elsewhere.
Thereafter, Spain, besieged by enemies and internal misrule, went into long-term decline, culminating with the loss of most of its few remaining colonies (Philippines, Cuba) to the U.S. in 1898.
The Spanish had a vicious civil war from 1936 to 1939, with the forces of the left supported by the Soviet Union and international volunteers, and the nationalists, led by fascist General Francisco Franco, supported by the fascist states Germany and Italy. Franco became dictator and kept Spain neutral during the World War II. After the war, Spains isolation was politically and economically overcome in 1955 when it became a Cold War ally of the United States and Western Europe still under Franco, joining NATO in 1982.
In the 1960s, the economy of Spain was revived, and the country grew rapidly, becoming a modern industrial state based essentially on tourism. In 1975, General Franco died, and his protégé Prince Juan Carlos took over as king and head of state.
He immediately began transforming Spain into a democratic kingdom, which was accomplished in 1978 with the approval of the new Spanish constitution. Spain was able to accomplish a peaceful transition to a modern functioning democracy, with the central government swinging back and forth between the forces of the moderate left and right, because of an implicit agreement not to refight the battles of the past, mostly due to the work of socialists Suarez e Gonzales.
Spain has been a member of the European Union since 1986 and adopted the euro as its currency at the beginning of 2002. Spaniards are now as rich on a per-capita basis, as the average European. The Spaniards have moved in two generations from conservative church-going Catholics to some of the most socially liberal people on the planet. In sum, Spain seems to have everything going for it, but there are problems in paradise.
Despite being citizens of one of the oldest nation-states, many Spanish identify more with their regions than the central state. Spain has four official languages — Castilian Spanish, Catalan, Galician and Basque, as well as several unofficial languages. The actions of the Basque separatist organization ETA, who have just killed two Spanish police officials in the Basque area of France, is the most visible issue in this diversified country.
Spain, unlike most countries, has become increasingly decentralized during the last few decades, with the central government shrinking relative to the regional governments. The socialist government of José Luis Rodriguez Zapatero, which gained power after the Islamic terrorist Madrid train bombings in March 2004 and the penetrant lies by then president José Maria Aznar, has opened old wounds by proposing a Law of Historical Memory, which would rewrite the history of the Franco period. Many spanish cities still have street and places named after the dictator as there is no official ban against fascist legacy. The recent intrusion by the Vatican's Pope Benidict against the Spanish gay marriages laws and the appraisal for catholic priests fighting on the side of Franco has caused much discussion in the country.
About 30 percent of Spaniards traditionally support the right-wing party. Another 30 percent support the left-wing party (which is now in power). Most of the rest of the vote is split among the various regional parties, which allows them to serve as power brokers. They have used this power to further decentralize the government and work for more separatist policies, especially in Catalunya.
The Spanish economy grew quickly in the boom years under the administration of José Maria Aznar (1996-2004), who undertook structural reforms and sound fiscal policies. But still his legacy is an high unemployment rate and a massive concentration on few high-graded businesses.
High-growth policies are not aplicable in modern Spain, which is a country with excellent possibility to lead a low-growth sustainable economy, gradually improoving living standards for all. Unlike Switzerland, which is increasingly fractured, Spain maintains its sovereignity by increasing the economic independence of its regions.