Diplomatically, Spain had no reason to enter the war. They were unconcerned with and unaffected by the main motivations for conflict, and had not been party to either of the major alliances. On top of that, Spain was unprepared to enter a conflict on the scale of WW1: the Spanish economy was still largely centered around agriculture, while its nascent industrial sector was just beginning to grow. The Spanish military had recently suffered a humiliating defeat in the Spanish-American War and had not conducted itself well against the Rif tribesmen in Morocco. Spanish leaders acknowledged the need for military reform, but had only just begun the process in 1914. The oncoming war compounded the difficulties of reform, preventing the Spanish Navy from acquiring new ships built in British Shipyards and generally causing the cost of military supplies to increase.
Due to the country’s general unpreparedness, few supported outright intervention. Some did support an alignment towards one of the warring factions: in general, the Spanish Left supported the Entente, while the Right supported the Central Powers. It was difficult for any politician to openly advocate for one side or another, however, due to the deeply divided political climate of the time. Between 1911 and 1921, the office of Prime Minister changed hands 18 times, switched parties 10 different times, and anarchists cut short the lives of two PMs. When Count Romanones, a liberal PM, attempted to rebuke Germany for sinking Spanish cargo, he was swiftly ousted from power. The Germans vigorously supported the pro-Central Powers position in Spain, promising King Alfonso the role of arbiter in any peace settlement to come and paying for the favor of hundreds of Spanish newspapers. The Entente pursued Spain less enthusiastically, as a neutral Spain which depended on British and French trade was more useful than a Spain actively demanding a seat at the table during peace talks.
Economically, the war caused a massive rise in Spanish exports. Spain supplied the warring parties (especially the Entente, as a matter of geography) with massive amounts of raw materials, food, and textiles. The industrial sector grew significantly, gold reserves increased, and much of the national debt was paid off. But with the boom came rampant inflation, causing the cost of living to spike. Industrialists did not raise wages in line with inflation, and the government, seeking to cut down on bloat in the officer corps, treated soldiers similarly. The boom also affected some regions disproportionately: industrialized Catalonia in particular flourished, strengthening organizations calling for home rule and even independence. The disgruntled workers flocked to anarchist and socialist parties, leading to serious labor unrest which often ended in violence. The soldiers formed unofficial organizations called juntas and openly criticized the government and its reforms. When the economy slackened after the war, these issues were only further exacerbated. The growing divisions between the government, the socialist/anarchist left, the military right, and regional powers, accelerated by the events of the war, undoubtedly contributed to the outbreak of civil war in 1936.
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