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Spanish Currency History

Spanish currency history and its economic pillars.

The euro was introduced in Spain in 2002. Most of the countries from the European Union adopted this new currency to make it easier to travel between countries. Euro is the official currency of 19 out of 28 member states: Germany, Austria, Belgium, Cyprus, Slovakia, Slovenia, Spain, Estonia, Finland, France, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands and Portugal.

There are seven euro notes, worth €500, €200, €100, €50, €20, € 10and €5. Regarding coins, there are eight different kinds: €2, €1, €0.50, €0.20, €0.10, € 0.05, € 0.02 and 0.01€. While one side of the coin has a common image for all the eurozone, the other one offers a different design in each country. Spanish coins, for example, usually have several monuments and the King’s portrait.

CURRENCY'S HISTORY IN SPAIN

Real, escudo, and peseta were some of the Spanish currencies before the euro. Most of the transitions from one to the other took place due to territorial unification. In an organic way, many regions began to call their money by different names, until a new form of payment was implemented.

Real was the official Spanish currency for hundreds of years, from the middle of the 14th century to 1864. The Castilian King Peter I introduced this standard coin, worth three maravedíes. These were Iberian coins made of gold or silver. Eight reales were equivalent to the weight of one silver peso or Spanish dollar, which was presented the same year. The Spanish dollar was used in the Americas and Asia, and it became very popular as trading money for international commerce.

The Spanish escudo (or shield) had two denominations: silver and gold. The first escudo was a golden coin introduced in 1566. It continued being coined until 1833. The silver escudo was used between 1864 and 1869. Each escudo was worth several reales and they were finally replaced by pesetas.

Before the euro existed, peseta was the official currency of Spain from 1869 to 2002. The word peseta is derived from the Catalan peceta, diminutive of peça, and it means “small piece.” During the 15th century, pesetas were made of silver and equivalent to the value of two reales.

In an effort to unify the currencies of the country, a decree was released in 1868, establishing the Spanish affiliation to the Latin Monetary Union. This way, peseta was fixed as the national currency. Its objective was to strengthen the economy and promote business in a stable financial environment.

SPANISH ECONOMY AFTER THE EURO

When Spain was accepted in the European Union in 1985, foreign investment increased and the market was liberalized. The country was the main beneficiary of the harmonization fund of the EU, whose aim was to support poorer countries in the group and reduce economic disparities.

The Spanish economy got boosted by several EU-financed projects. Some of them were the construction of airports, highways, and high-speed trains. After a slight economic downturn in the 90s, Spain returned to a growth period.

Nowadays, it is among the 15 top global economies and the top 5 European ones. Its GDP growth has been above the average for 15 years now, even though it began slowing down at the end of 2007.

In the second quarter of 2008, the Spanish economy suffered a recession, like many other countries. Then, the country went through a decline in construction, a real-estate bubble, and a fall in exports. In 2009, Spain had the highest unemployment rate in the European Union.

THE PILLARS OF THE CURRENT SPANISH ECONOMY

Despite the rural depopulation and the change of its economic models, Spain still has important agricultural and livestock sectors. Among its most important products are cereals, vegetables, olives, wine, citrus fruits, meat, dairy, and fish.

Regarding the industrial sector, textile, shoes, and food and drinks production rank on the top of the list. The metal industry, as well as the chemical and the pharmaceutical ones play important roles in the Spanish economy. In addition, lots of ships, cars, and machinery are manufactured daily in the country.

However, tourism is probably the most popular economic activity. Every year, more than 82 million international tourists visit Spain and spend around 87 million euros during their stay.