In the 1920s and early 1930s, Spain was in a condition of extreme turmoil and political unrest. The majority of Spaniards lived under conditions of poverty, the government was torn by competing leftist and right-wing factions, and nationalist tensions led to unrest in Catalonia and the Basque country. These tensions reached a boiling point in 1936, when, in response to peasant uprisings throughout the country that were interpreted (perhaps correctly) as a socialist revolution, conservative factions within the army launched a rebellion against the government.

During the civil war that followed, the people of Spain suffered horribly. The death toll was extreme, with nearly half a million battlefield deaths, and perhaps 100,000 executions in a violent cycle of reprisals. Additionally, many cities suffered aerial bombardment as German and Soviet military equipment was put to work in support of the Nationalists and Republicans, respectively. Civilian casualties in Catalonia and Basque country were especially high. An estimated 50,000 noncombatants died as a result of disease and starvation, as the war halted supplies of food and medicine. 

After the war, the Spanish economy continued to suffer. Key infrastructure, never well-developed in Spain, had been destroyed by the conflict, and the labor force was obviously severely damaged by the fighting. The dictatorship established by Francisco Franco curtailed basic civil liberties, and while Spain stayed neutral in World War II, their economy suffered from the conflict. Catalans, Basques, and other minorities in Spain suffered repression and discrimination under the arch-nationalist Franco regime.