At the beginning of the 1980's, the anticipated benefits of Spanish accession to the European Community were essentially three-fold: establishing the legitimacy of the new democracy; modernization of the political and economic system; and improved economic welfare. In the fifteen years that followed Spain's entry to the EC in 1986, the country experienced major political, economic and social changes - partly attributable to the demands and pressures of EC membership, but no doubt also to the internal dynamic of social change and modernization. Mary Farrell examines Spain's experience of European integration, reviewing the impact on the real economy and on the national political economy, and identifying the extent of convergence and divergence from the European Union.Taking the Maastricht Treaty convergence criteria as the starting point, she explores the effects on national and regional economic development, the labour market and the public sector. A central aim is to identify the challenges posed by EU membership for the evolution of the public sector, itself the product of the modern democratic Spain, and in particular the relationship between the central government and the regional autonomous communities.European integration exerted enormous pressure on the state and the economy and EU financial flows became a decisive instrument of redistribution to compensate for regional inequalities. However, the biggest challenges facing Spain in the EU remain to be addressed in the context of future integration within an enlarged community.