Madrid became Spain's capital simply through its geographical position at the centre of Iberia. When Felipe II moved the seat of government here in 1561 his aim was to create a symbol of the unification and centralization of the country, and a capital from which he could receive the fastest post and communications from each corner of the nation. The site itself had few natural advantages - it is 300km from the sea on a 650-metre-high plateau, freezing in winter, burning in summer - and it was only the determination of successive rulers to promote a strong central capital that ensured Madrid's survival and development.

Nonetheless, it was a success, and today Madrid is a vast, predominantly modern city, with a population of some three million and growing. The journey in - through a stream of concrete-block suburbs - isn't pretty, but the streets at the heart of the city are a pleasant surprise, with pockets of medieval buildings and narrow, atmospheric alleys, dotted with the oddest of shops and bars, and interspersed with eighteenth-century Bourbon squares. By comparison with the historic cities of Spain - Toledo, Salamanca, Sevilla, Granada - there may be few sights of great architectural interest, but the monarchs did acquire outstanding picture collections, which formed the basis of the Prado museum. This has long ensured Madrid a place on the European art tour, and the more so since the 1990s arrival - literally down the street - of the Reina Sofía and Thyssen-Bornemisza galleries, state-of-the-art homes to fabulous arrays of modern Spanish painting (including Picasso's Guernica ) and European and American masters.

As you get to grips with the place you soon realize that it's the inhabitants - the madrileños - that are the capital's key attraction: hanging out in the traditional cafés or the summer terrazas, packing the lanes of the Sunday Rastro flea market, or playing hard and very, very late in a thousand bars , clubs, discos and tascas . Whatever Barcelona or San Sebastián might claim, the Madrid scene, immortalized in the movies of Pedro Almodóvar, remains the most vibrant and fun in the country. The city is also in better shape than for many years past, after a £500-million refurbishment for its role as 1992 European Capital of Culture and the ongoing impact of a series of urban rehabilitation schemes - funded jointly by the European Union and local government - in the older barrios (districts) of the city. Improvements are also being made to the transport network, with extensions to the metro, the construction of new ring roads and the excavation of a series of road tunnels designed to bring relief to the city's overcrowded streets. The authorities are even preparing a bid for the 2012 Olympics.