Spain is part of Europe.
Barcelona . It is a major cultural and economic centre in southwestern Europe , 24th in the world ( before Zürich , after Frankfurt ) and a financial centre . In the same year the city was ranked Europe 's fourth best city for business and fastest improving European city , with growth improved by 17 % per year , and the city has been experiencing strong and renewed growth for the past three years . Since 2011 Barcelona has been a leading smart city in Europe . Barcelona is a transport hub , with the Port of Barcelona being one of Europe 's principal seaports and busiest European passenger port , an international airport , Barcelona -- El Prat Airport , which handles over 40 million passengers per year , an extensive motorway network , and a high-speed rail line with a link to France and the rest of Europe . Madrid . It is the third-largest city in the European Union ( EU ) after London and Berlin , and its metropolitan area is the third-largest in the EU after those of London and Paris . Due to its economic output , high standard of living , and market size , Madrid is considered the major financial centre of Southern Europe and the Iberian Peninsula ; it hosts the head offices of the vast majority of major Spanish companies , such as Telefónica , Iberia , and Repsol . Spain . Spain 's capital and largest city is Madrid ; other major urban areas include Barcelona , Valencia , Seville , Bilbao and Málaga . Valencia . The Port of Valencia is the 5th busiest container port in Europe and the busiest container port on the Mediterranean Sea .