The reign of Spain

On Sunday, their footballers passed their way to glory. But when it comes to food, fashion and architecture – not to mention sun, sand and sea – the Spanish have long been world champions, says Simon Calder

Evidently, the best team won. As extra time ebbed away in Africa's first World Cup final, the artistic and collaborative Spanish were rewarded with a winner. The righteous hermanos took the trophy from a Dutch bunch of cloggers who were, according to my calculations, only three yellow cards short of a mass Tasering from the English referee.

But did the best country win?

Holland is Europe's longest-running economic miracle. The United East India Company, formed in Amsterdam at the start of the 17th century, was the world's first multinational, setting the pattern for energetic exploitation of meagre natural advantages using imagination and innovation. By contrast, the Spanish economy has been mostly a disaster zone for just as long. The spoils of conquest in Latin America that should have conferred enduring global supremacy upon the Spanish were squandered, setting a (purloined) gold standard for erratic economic behaviour that has continued on and off ever since.

Strategic blunders in Madrid tore the empire apart in the 19th century, and the first three-quarters of the 20th century were blighted by political fragility, bloody civil war and the lifeless hand of Western Europe's last dictator.

When, in 1975, General Franco at last did the decent thing and died, Spain began to bloom. Within two decades the restored kingdom enjoyed the miraculous year of 1992: Madrid was Europe's Capital of Culture, Seville hosted the World Expo and Barcelona was venue for a memorable Olympics. The land on the "wrong" side of the Pyrenees was at last centre-stage, and the economy rapidly grew to become the fifth most important in Europe, after Germany, France, the UK and Italy.

Which is when things really started to go off the muddled-gauge rails that prevail on the "wrong" side of the Pyrenees. A property bubble – in part fuelled by easily seduced Northern Europeans desperate for a place in the sun – triggered an unsustainable economic boom.

Global finance is a trick sustained by confidence. Once the world starts asking for its money back, the mirage melts. Spain's indebtedness to foreign lenders equates to £35,000 for every man, woman and child – 50 per cent more than the typical Brit (though less than the average Dutch person). The finance ministry is paying the "Pigs" premium for long-term borrowing: as brutal as a studded boot in the chest, this is the penalty for belonging to the southern faction of the eurozone, with Portugal, Italy and Greece.

The traveller in Spain this summer could conclude that the country has slipped into a collective siesta, economically speaking. Tower cranes on the Costas stand motionless; at dusty rodoviarias, destitute workers queue for buses to their homelands; and hoteliers from the Balearics to the Canaries face a second miserable summer, as cash-strapped Northern Europeans head east to Turkey and Egypt.

The conventional remedy – devaluation – is not available to the Spanish. When, in the last days of 2000, they queued at banks for the chance to buy souvenir bags of euro coins, there was a palpable sense that Spain had finally laid to rest the demons of the 20th century. Citizens eagerly traded tarnished pesetas for the glittering promise of the euro. The marriage of fiscal convenience that locked Madrid to Frankfurt, Dublin and Amsterdam has cut the room for manoeuvre, and the coldly dispassionate markets know it.

"Few Spaniards possess the damnable efficiency and consistency that a modern totalitarian state needs," observed George Orwell as he extricated himself, bloodied and disillusioned, from the Spanish Civil War as Franco's fascists took over. Yet these are exactly the qualities needed to excel on the world's sporting stage. Two years ago, the national football team glided efficiently and consistently to take the Euro 2008 title; two weeks ago, Rafa Nadal powered to his second Wimbledon title, the biggest prize in tennis. And two days ago, Andres Iniesta's goal lifted Spain into that most elite of fraternities: holders of the World Cup.

Sporting supremacy rarely correlates with economic adversity, especially when austerity is compounded by social unrest (spurred by Spain's shocking youth unemployment) and the pervasive threat of terrorism; Madrid's "forest of the absent" mourns the 190 who died in four train bombings by Islamists in 2004, while the Basque separatist movement, Eta, belligerently harries the authorities. Such circumstances could trigger a slide into the abyss of ordinariness. But the Spanish seem to have decided that the best way to edge away from the brink is to deploy brilliance – starting with architecture, cuisine and culture. And if that doesn't appeal, there's always sun, sand and sea.

Two decades after Orwell and fellow survivors from the International Brigades were chased away across the Pyrenees, a very different international brigade took to the beaches of Spain. In the 1950s, Franco's republic began to cater for a generation of Northern Europeans with enough disposable income – just – to flee the Ruhr or the Midlands for a week in the sun. A charter flight to Perpignan in southern France, followed by a bus ride south along the Roman Via Domitia – pausing at the Spanish border to pay the 50 peseta border fee – started to transform the value of the nation's assets. The serrated coves of the Costa Brava and the bleached beaches of the Costa Blanca, previously the preserve of fishermen, soon started to generate foreign exchange. In the 21st century, Spain is the favourite destination for UK travellers. Our Spanish infatuation is an expensive business that damages the British bank balance. Spain is the single greatest beneficiary of the £20bn "tourism deficit" – the excess of what we spend abroad over the amount foreign visitors spend in the UK.

Tomorrow alone, 11 scheduled flights will take off from just one British airport, Gatwick, to a single Spanish city: Malaga. Our love affair with Spain, which began with naked lust for sunshine and cheap beer, is more passionate than ever.

It is 35 years since first I ventured south of the Pyrenees; my parents insisted I waited until Franco died before crossing the frontier. Yet with each visit I still feel the same seductive surge of anticipation and amazement (tempered by a certain bewilderment) as I did the first time. To borrow a slogan: if you can't find it in Spain, you're probably better off without it.

I have travelled to Spain by air, road, rail and thumb, but the most instructive way is on foot. Pick almost any Pyrenean pass, and plod up the narrowing valley from the French side until you reach the watershed. Small stone tablets, marked F on one side and E on the other, will tell you which side is which – as if your eyes needed confirmation. To the south, the fences and formality of France are supplanted by a sense of space, as the mountains unfold into plains that melt in the haze.

The Pyrenees comprise one of those very rare instances where an international frontier coincides with an emotional border: the people in the first village on the Spanish side are a very different breed from those residing in the last village on the French side. Could it be a simple matter of the land sloping towards the sun? They lunch longer, dine later and welcome the stranger more warmly. (To work out Spanish meal times, add three hours to your normal regime.) Yet to counter the easy conclusion that the national character is genial slothfulness, you need not venture far. The broad sweep of the bay at San Sebastian, for example – the first city in Spain – where you can feast on grilled fish lifted a few hours earlier from the Atlantic, or swoon over tastes and textures created by some of the world's greatest chefs.

As you venture deeper, the virtuous spiral of collusion between nature and man becomes apparent. The crumpled landscapes of the Basque country are punctuated by medieval villages – and laced with railways and autopistas that defy the contours. Along the coast, Bilbao is the epitome of defiance in the face of economic despondency. A single structure, Frank Gehry's Guggenheim, transformed the world's opinion. No matter that the contents are as puzzling as the structure is dazzling: imagination and $100m promoted the Spanish Basque capital to that trickiest of premier leagues, great European short-break cities. While the facade of the Guggenheim (like offcuts from a Boeing 747) will entice you in, it is the ornate eccentricity of the old town, the colour and hyperactivity of the market and the spectacular Transporter Bridge that will remain with you.

Madrid was conceived mathematically, as the central point in the nation. Other capital cities created from such political expedience have a tendency to blandness (ever been to Canberra?) but Spain's largest city has risen majestically to the task – with three great art museums in a single kilometre, a royal residence that welcomes visitors far more readily than Buckingham Palace and the finest seafood on the planet. Not bad for the most deliberately landlocked city in Europe.

However exquisite the embroidery on the fabric of the nation, the people – and, more particularly, their collective expression – is the most engaging and intriguing dimension of Spain. Orwell said, "I have the most evil memories of Spain, but I have very few bad memories of Spaniards."

My memories of nation and people are overwhelmingly good. I have been rescued from a thousand roadsides by motorists predisposed to stopping for a stranger rather than thinking of good reasons to drive past; I have sipped and supped in cafés with locals who appear to have stepped from a Velasquez painting or a page of Cervantes; and I have insinuated myself into fiestas whose origins and meanings are submerged by exuberance. More than any of those, I have played the tourist, the undemanding role at which the British excel. If you need a recommendation for somewhere to watch the sun sink into the Med or the ocean, I can suggest locations from Menorca to the Canary Islands. Spain understands that tourism is an industry in which excellence is everything.

You might arrive on easyJet (it carries more people to Spain than British Airways and Iberia combined), and stay in a one-star pension, but the ambience and the attitude combine to deliver the experiences and memories that we all crave.

Tourism, like football, is an industry of human happiness. Both demand teamwork complemented by individuality, plus flair and dedication. Next week, as it happens, I am off on holiday to Holland, a tolerant country where I am confident that sharing the same nationality as the World Cup final referee will not be held against me. But Dutch tourism is a minority sport. Fourteen million British holidaymakers will be making the safe bet: Spain will win, yet again.